Since the most recent market meltdown, Americans are re-evaluating their financial situations.

Some, mostly those who have invested some time and money in the process of “planning,” are doing so with at least a clue of what their target is or should be.

Those who have not planned are likely more fearful of the uncertainty of the future, fueled additionally by the fact that they have no clue of what they may be aiming at.

For most, retirement is a goal.

It is either something they are striving for, or, if they are already in retirement the goal is to exist in it successfully.

By simple definition, don’t run out of money before you run out of time.

With all the fancy products, schemes, hedge funds and the like that have populated the investment world for the past 20 years, Americans have lost their taste for the risk that was imbedded within them.

We’re going back to basics.

We are looking for things that can make a solid foundation for what is likely to be a somewhat “scaled-down” retirement lifestyle.

Guarantees and insured accounts have pushed their way to the forefront of American thinking.

No longer do we hear Suze Orman “pooh-poohing” variable annuities or Guaranteed Insurance Contracts (GIC’s) because of their fee structure or complexity.

In the three market recessions that have come along since 1990, these basic building blocks of financial security have been among the few things that protected investors from serious economic loss.

People are restoring their priorities as well.

They are looking more to protecting their income sources, managing risk and building cash reserves before going out looking for that hot investment opportunity.

Getting out of debt has become more popular than ever, especially since the big banks have nearly all raised their fees and credit card interest rates.

Once these bottom tiers of the financial security “pyramid” have been properly constructed, we can turn to the task of trying to make our money grow to outpace inflation.

Retirement is likely not going to be the luxury car or the annual trip to Europe as many may have hoped.

We are becoming more focused on a reasonable and perhaps even frugal lifestyle that will give us a better chance of being able to afford to live another day with the freedom to make our own choices. People are living longer and are doing so under greater economic duress than ever in recent memory.

The greatest threat to our financial freedom is our own longevity.

With retirements now projected to last 30 years or more, do we have 30 years of income put away in a source that is guaranteed?

Since tomorrow is the first day of the rest of our life, what are we waiting for?

Al Benelli is a Certified Financial Planner™ and founder of The Merlin Group. Securities and investment advice offered through Capital Financial Services Inc., member FINRA/SIPC, 2605 Egypt Road, Trooper; 610-676-0668.

Learn more here: Folly Beach Blog

Studies show that Americans are living longer, so they’re spending more time in retirement. The Census Bureau reports that half of all men reaching the age of 65 can expect to live until 82, and half of women reaching 65 can live to be 86 and older. No one wants to consider the possibility of running out of money ten years or more into retirement.

Retirement planning can be complicated, but the American Saving Education Council created an easy ballpark estimate guide to help you figure out how much money you’ll need to do so comfortably.

Print out the non-interactive PDF to share with family and friends. The print version makes some assumptions on rates of return (3%) and wage increases growing with inflation, but you can obtain a rough first estimate.

For a more accurate picture of what you’ll need to retire, click on the interactive version. Some of the entries may be difficult to determine, such as, “ Enter expected age of death.” Or, “Input the rate of return you assume you will earn on your investments BEFORE you retire.” For help with these answers, go to these calculators – from life expectancy to stock returns to a helpful checkbook balancer, there are calculators on this list for most of life’s financial situations.

Read the original article by Janet Bernstel
here.

By Pamela Pennington

Q: Although our children have grown up and gone, we have decided to stay in our home rather than downsize. How can we adapt our environment to be easier to manage as we get older?

A: Many baby boomers — and some of us on either side of that category — want to keep our homes but feel like we need a new environment that better suits our changing lifestyle. Although the retirement years can be challenging, they can also be the most freeing and productive without the limitations or responsibilities of jobs and children. Making the most of your space and making it safe and convenient can take a little thought but reap real rewards. Here are some of the areas you need to reconsider:

Address accessibility first

Many homes are not on one level and therefore can be a challenge as we get older. If mobility is an issue, one option is to talk to a company that manufactures small elevators that can be retrofitted to the side of your home or interior with a little effort.

Waupaca Elevator Co. sells the specialized elevators, so check them out online. You can also contact Pacific Access Contractors, which specializes in residential elevators and lifts. The cost is surprisingly affordable, considering the value added to staying in your own home.

A lovely, yet safe, bathroom

Your bathroom can be a beautiful sanctuary. However, as we get older, it can also be a dangerous space. If you, or a family member, have had an operation, suffer from arthritis or have other physical limitations, these problems should be taken into account when considering a remodeling or face-lift for a home. All of these elements are becoming readily available through local retailers:

Many of the new stone mosaic patterns available for bathroom floors are safe, creating a nonslip surface, and stunning in appearance.

Grab bars look more attractive now and make a crucial difference in supporting you when you enter the shower or bath. I use them as extra towel bars to dry off those large bath sheets.

If you aren’t able to stand, a bench in the shower area allows you to use a handheld showerhead while sitting or resting. And the curbless showers that allow for full access, even for wheelchairs, look cool and modern.

Faucets with lever handles help if you don’t have the strength in your hands that you used to.

Look at updating your lighting

With the new technologies you can find many lighting options that use very low wattage LEDs, allowing you to save on electricity. This light source also produces a very bright white light — a boon for aging eyes. There are more fixture choices using LEDs available seemingly every day.

Just because you’re facing retirement, doesn’t mean your home is too.

Workers nearing the end of their careers face complex issues in planning for retirement. Two of the biggest decisions are how much to plan to spend in retirement and how to maximize income through retirement programs, including Social Security.

As you can see, financial planning for retirement is just as important as planning for anytime in one’s life, if not more.

View the original article here.

What exactly does this mean? Well, as explained in the July/August issue, the pedestrian-friendly layout of the town, plus all the perks of the area played a part in the ranking. The coastal setting, proximity to Historical Charleston, exceptional amenities, diverse real estate offerings and residents of all ages from all over the country make Daniel Island a great place to call home.

The magazine editors at Where to Retire magazine talked with a group of retirees to learn what determined their relocation decisions and noted some trends in the process: Baby boomers are discovering a wide choice of communities offering homes and lifestyles they previously associated with exclusive vacation properties; many pre-retirees are moving to master-planned communities to get a jump on the retirement lifestyle while working (and many have found that they can telecommute for the final years of their career); moving near children and grandchildren is a priority for many retirees; neighbors and a sense of community remain among the most significant contributing factors to retirees’ happiness in the communities they choose, and many commented on the benefits of having a mix of people from different areas living within a new community.

Daniel Island is located on 4,000 acres along Interstate 526. The island is home to distinctive and diverse Charleston real estate and neighborhoods that provide a mix of home styles and prices. More traditional real estate features landscaped streets lined with sidewalks that encourage irresistible evening walks and interaction among neighbors. Southern-style Daniel Island front porches and lush gardens have gained recent press and acknowledgment for being some of the most relaxing in the nation. As such a great area, we have to wonder why you wouldn’t choose Daniel Island to call home.

The Levins twin daughters are now 10, but, on most weekends, soccer or birthday parties preclude the family from venturing north.

Were not using the home as much as we thought we would, mused Levin. We might not like it, but friends become a bigger part of their lives than their parents.

The realities of owning a second home are often far different from the fantasies, say many second homeowners and financial advisers. Among the typical surprises:

It cost more than we imagined.
Were using it less than we planned.
The area isnt what we thought it would be.
Were having more conflicts than we anticipated.

Nationally, the interest in second homes may be cooling. Only 4% of all homes purchased in the first quarter of 2003 were second homes, according to the National Association of Realtors, down from 5.5% of all purchases in 2001.

That doesnt mean you should forgo that cabin in the woods or the palazzo on the beach. But the happiest second-home owners are those who are realistic about what theyre getting into. Here are 10 tips to help you become a happy second-home owner.

Know yourself
Are you the kind of person who loves to visit new places or who revels in hotels that cater to every need? How are you going to feel about having to go to the same place over and over again, or having to face a big pile of laundry and dirty dishes at the end of every stay?

Peripatetic types could opt for a recreational vehicle as a second home instead of a stationary abode. But divas who dont budget for maid service are likely to be miserable.

Think it all the way through
Many second-home buyers expect to own their properties for the rest of their lives, but few vacation properties are that flexible.

The cozy lakeside retreat thats perfect for a childless couple might be too small or hazardous for toddlers or too isolated and boring for teenagers. Similarly, your high-schooler might revel in a hopping beachfront location that will be way too congested and noisy once youre retired.

In fact, the very attributes that draw you to a place may turn out to be its biggest disadvantages. Planner Nancy Langdon Jones of Upland, Calif., said her husband has long agitated for a secluded cabin in the mountains, especially now that the couple is nearing retirement age. But Jones has resisted living that far from hospitals and civilization.

He has diabetes, and hes a big man, Jones said. If something happened to him, I couldnt even get him to the car.

If youll only get a few years of use out of a place, its often better to rent than to buy, financial planners agree.

Consider all the costs
Second homes typically come with all the expenses associated with first homes, plus a few. In addition to mortgage, taxes, maintenance, repairs and utility bills, you may face extra fees for boat storage, golf course use or upkeep of private roads.

Then theres insurance. Insurers often balk at covering remote properties or those on beaches where hurricanes are a concern. You may wind up getting fire or windstorm protection from a high-risk pool, which means limited coverage and expensive premiums.

Know what you can afford
This seems obvious, but emotion often trumps common sense. You need significant disposable income to pay for two houses. The average second-home buyer, in fact, has an annual income of $85,900, according to the NAR.

Make sure your other bases are covered before you start shopping. Are your credit cards paid off? Do you have an emergency fund equal to six months expenses? (Remember, youll need more cash to deal with maintenance and repairs on another property.) Are you contributing enough to your retirement accounts and your childrens college funds?

Factor in the tax breaks
Mortgage interest and property taxes on second homes are typically deductible. The write-offs are limited to two homes, however. Own any more, and Uncle Sam wont help you pay for them.

Another potential tax break: You dont have to pay taxes on any rental income on a home if its rented for less than 15 days.

Of course, you wont be able to deduct rental expenses, either. If you rent your home for 15 days or more, youll have to declare the income, but you can deduct things like cleaning, maintenance, repairs, utilities and rental agent fees. Youll have to pro-rate your expenses to reflect your personal use of the house. IRS Publication 527 has more details. (See link at left under Related Sites.)

Dont get too far ahead of yourself
Some people snatch up future retirement property decades in advance, afraid that theyll be priced out of their desired market. But theres no guarantee the place you choose will still be attractive to you when youre ready to retire.

One couples dream of retiring to Florida was shattered after Jones, their planner, insisted they actually visit the lot they had purchased years earlier.

They discovered they didnt like the people, and the area had changed, Jones said.

Buy investment property with a clear head
Most people — 78% by NARs count — buy second homes primarily for recreational use. But a growing number of buyers say theyre also or primarily buying for investment purposes: 37% last year, compared with 20% in 1999.

If appreciation or rental value is your goal, youll need to pick property in excellent locations that have amenities with wide appeal, Levin cautioned. After all, red-hot markets can suddenly cool, and marginal properties can lose value quicker than their first-rate competition.

Youll want to be on the beach, he said, not near the beach.

Expect lenders to demand larger down payments for investment property and to charge higher interest rates — typically about 1 percentage point higher than they would charge on a residential mortgage.

Beware of time shares
A time share is not an investment, no matter what the sales rep says. The only happy time-share owners Ive met are those who bought for pennies on the dollar from the poor saps who paid big bucks for them originally.

This is an industry renowned for high-pressure sales tactics and unhappy buyers. Steep ongoing fees and limited availability can quickly turn the most ideal-sounding time share into an albatross.

If youre convinced a time share is the right choice for you, shop the resale market. Youll find ads online and in newspaper real estate classifieds.

Approach joint ownership with caution
Many people who dont feel they can afford a second home on their own decide to split the purchase with relatives or friends. And many of them regret it.

Its not just scheduling conflicts that cause problems. People who are compatible in every other way can have screamingly different ideas about how often the lake house needs painting or who should be responsible for the pipes that burst last winter. I know one such partnership that finally broke up over an argument about toilet paper. (One of the parties was accused of never supplying any and frequently using the very last sheet. Shudder.)

Make sure you have an exit strategy
Dont just dump your second home back on the market when youre ready to sell. Consider some alternatives first.

Any profit you make on a second home is subject to capital gains taxes. (The current federal maximum is 15%, plus whatever your state charges.). If your potential profit is large and moving is feasible, you might consider making your second home your primary residence for two years. That way youll escape any tax on profits of up to $250,000 per owner.

If that wont work and youre interested in another property, you could consider whats called a 1031 exchange, said Thomas Jahncke, a financial planner with Passco Real Estate Enterprises.

These exchanges, named after the IRS code that allows them, give owners of commercial or rental property the chance to swap for other, similar real estate without owing taxes on the gains. (For more, see my colleague Jeff Schneppers article, “Let Uncle Sam help fund a retirement home.“)

You would need to rent out your second home for several months before selling, and then use the proceeds to buy another rental property, which you could eventually convert to personal use. You have to hire a third-party administrator skilled in 1031 exchanges to handle the transaction, since the IRS does not allow do-it-yourself procedures.

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