THINK: WHAT SHOULD THE NEW RETIREMENT AGE BE???

Official Retirement Age May Soon Be Increased
Reverse Mortgage Advisor, by Admin. Under News.
Posted on February 15, 2009, 11:13 am

The new President Obama Administration is set to carry out a number of major programs aimed at restructuring the economy. The Obama Administration has already promised to take a hard and careful look into some programs designed for seniors such as Medicare and Social Security.

Usually such programs designed for seniors are hardly touched as it is seen as a bad political move. The senior population makes up a viable and major determining block during elections. However these are hard and different times and some major cut backs can be expected.

Times have changed and there can no longer be federal programs that will continue to remain immune to cut backs and pruning. The main reason for all the cutbacks is that the government is bankrupt.

The last term of Clinton’s administration saw the country enjoying four years of surpluses but the succeeding Bush Administration brought in 8 years of deficits.

The Treasury Department put federal debt at $5,674,178,209,886.86 in 2000. By 2008, federal debt has soared to $10,024,724,896,912.49.

It is only wise that Government cuts back on its spending in order to meet up with a number of upcoming costs that must be soon be faced.

The large debt may have been sustainable if the job base and the economy are (sic) growing. Apart from the high level of debt the country continues to import much more than it exports. The rate of unemployment is increasing and a number of states are already facing financial difficulties. It is now clear that the country is experiencing a recession.

It has become imperative that all government programs be resized and restructured to reduce expenditure and waste.

The Washington Post quotes the President as saying, “what we have done is kicked this can down the road. We are now at the end of the road and are not in a position to kick it any further. “We have to signal seriousness in this by making sure some of the hard decisions are made under my watch, not someone else’s.”

It is thus obvious that the president is serious about the issue. Social Security and Medicare may be restructured and resized. If this happens then the age which must be attained to enjoy full benefits of federal senior programs are likely to rise.

While this is still just speculation the current trends make it seem very likely. This is sure to raise the number of reverse mortgages being originated across the US.

According the Post, the President has said most of these adjustments would begin soon when a fiscal responsibility summit would be convened. As soon as the administration is able to jump-start the stock and job market it would begin to look into all these issues

FIGURE YOUR NEW PURCHASE-MONEY REVERSE MORTGAGE (HECM) WITH THIS NEW EASY-TO-USE CALCULATOR

October 29th, 2008 by Admin. from Reverse Mortgage Daily

Most reverse mortgage calculator providers like Ibis won’t be updating their OFFICIAL calculators until the FHA mortgagee letter comes out soon, but Ibis, bowing to our curiosity was nice enough to provide the public with a calculator showing the NEW test $417K Purchase Money Calculator.

This tool shows the new national limit with three different Treasury HECM margins and has loan fees constrained to a range from $2,500 to $6,000.

[Remember: The figures on this page are estimates only, and are based on a variety of assumptions that are subject to change. Only an approved lender can determine eligibility for a loan or provide a “Good Faith Estimate” of loan terms. These estimates are based on interest rates for the week of October 28th and program home value limits as of October 26, which may or may not be applicable to a loan for which you may qualify.]

PURCHASE MONEY CALCULATOR

New HECM for Purchase Reverse Mortgage Effective 1-1-2009 (Click on connections below to test for your purchase.)

To run you purchase scenario there is a complex (Fancy) and a Simple form to run scenarios

The HECM is based on the appraised value or purchase price, whichever is lower and shows how much cash you need to bring to the table.

The complex (Fancy) form even allows for the actual appraised value to be different than the purchase price and allows for information on selling your current home.

Below is an example of 70 year old borrowers looking to purchase a $350,000 home who don't currently own their own home.

To test drive the Fancy Calculator, click https://www.ibisrmo.com/quotes/default_hfhp.aspx
For some fun and to see the full effect of the calculator, make the Sales price and Appraisal different. This version includes the sale of your present home.

To test drive the simple calculator, click https://www.ibisrmo.com/quotes/default_hfhp.aspx?pl=omn This calculator does not include the sale of any current home, and is useful for seniors who want to purchase a home with the Reverse Mortgage when they don't have a home to sell.

The exciting new purchase program, added to the refinance Reverse Mortgage, adds a huge dimension to the choices you have for your future - like moving to a location you've dreamed of, or moving closer to the rest of your family, or refinancing and staying in the home you love.

Both programs are the same in that there is no credit, asset, or income qualifications; no payments are required, and both loans are non-recourse loans, meaning that no matter what happens with your home, your other assets cannot be touched by the lender. Funds from both loans are non-taxable, and will not affect your Medicare or Social Security benefits.

If you have any questions about the actual costs, amortization schedule or have trouble using the calculator be sure to call me so I can provide you with the answers you want. My number is 703/244-8151. I can also run the new program for you, if you want to do a refinance reverse mortgage.

This is all very exciting for senior homeowners, and will help make retirement a better place to be.

Retire like royalty in a low-cost paradise
By Liz Pulliam Weston, MSN.com

Tempted by low prices in pristine, faraway lands? Here are 5 keys to really making retirement work -- and a few delightful destinations to consider.

With the stock market recently approaching new [low] milestones, you may have revived your dream of retiring early. The only question is how.

The answer for a growing number of Americans making the leap into early retirement is moving to a country with a lower cost of living. The U.S. State Department estimates some 4 million Americans live abroad, not counting military and embassy folks. About a quarter of those are estimated to be retirees.

Poke around on the Web, and you'll find a whole industry devoted to retirees looking to live like a despot on $15 a day -- usually under tropical skies with daily maid service and umbrella-bedecked drinks thrown in for good measure.

From a financial perspective, spending your golden years overseas is certainly tantalizing.

Consider how far your Social Security checks might go:

In Ajijic, Mexico, a community near Guadalajara that's home to more than 3,000 expatriate Americans, where you can rent a sprawling three-bedroom, two-bath hacienda for about $700 a month.

In English-speaking Belize, where retirees don't have to pay taxes on the first $75,000 of income and where property taxes on a $500,000 home run about $90 a year.

In Spain, where the weather is good, health care is affordable and the rest of Europe is at your doorstep.

The cost of living may even be low enough for you to retire years earlier than you might otherwise.

Louisiana banker Tom Vidrine, for example, fell in love with Belize on his first trip to the Central American country in 1990. He bought a vacation home and spent the next seven years saving money so that he could retire in 1997 at the ripe old age of 45. He says an American can live a comfortable life on one of Belize's many tropical islands for $2,000 a month, or half of that on the mainland.

"My only regret," said Vidrine, "is that I did not come sooner."

If you're the kind of person who considers only the financial aspects, however, then retiring abroad could be an absolute disaster. Ruth Halcomb, who runs the LiveAbroad.com Web site from Santa Fe, N.M., has seen it many times.
"Some people sell their stuff, move and try to settle," Halcomb said, only to "change their minds and come back."

At a minimum, people who consider retirement abroad should be adventuresome, flexible, tolerant and patient, the expats I interviewed agreed.

Here are some other traits that come in handy:

You're willing to make new friends

"The people who do well are couples who depend on each other a great deal," Halcomb said, "and who don't have a great sense of community or good friends they're going to miss terribly."

That's not to say you won't make new friends, particularly in areas that attract a lot of other foreign retirees.

"There are enough retired people here who are looking for friends and new acquaintances," said Chuck Svoboda, a former diplomat who retired to Spain's northern coast, "that there's no difficulty in building a fairly large circle of them in a short time."

Improved cell phone networks and Internet access also have made it easier for expats to stay in touch -- so much so, Svoboda grouses, that it sometimes "keeps people from enjoying what this country has to offer."

But you'll still be hundreds if not thousands of miles away from family and friends, who probably won't visit nearly as often as they would if you were still in the States.

You may not mind watching a grandchild grow up in photos, but if you want to be there in person, overseas retirement probably isn't for you.

You're open to experiencing a new culture.

It seems obvious, but the rest of the world really isn't like the United States. Some people never adapt to the strangeness or to the notion that they'll always be foreigners, no matter how many other expats live in their chosen community.

"I met a Frenchman who said, 'You Americans, you welcome me with open arms, but in my country, it wouldn't be the same,'" Halcomb said. "'You would never be French.'"

In most countries, language barriers can pose a problem even to the most intrepid. Hildreth Serrano, an American registered nurse who lived for more than a decade in Germany, thought she'd do fine living and working in the Czech Republic -- until she got there. Although she loves living in Europe, learning a new language has been daunting.

"I would have to say the worst thing (about living abroad) is being reduced to having absolutely no language ability -- going from being a fairly articulate professional to total mute non-comprehension," Serrano said. "It is bewildering, disconcerting and adds to a sometimes overpowering feeling of isolation."

You're not a Type A personality

If you're the kind of person who gets impatient waiting in line at the post office, for example, then dealing with bureaucracies in other countries could drive you up a wall.
A simple banking transaction in Mexico can be an afternoon-long affair, while getting a phone installed in many countries can take months. Utilities and other bills often must be paid in person in countries with iffy postal systems -- and that means long periods standing in lines. Stores might be open only a few hours a day, and closed for innumerable holidays, making you long for a 24-hour mini-mart.

"There was a huge culture shock when we first went to Ecuador," said Suzan Haskins, an Omaha native who has worked for International Living, a newsletter and Web site, in Ecuador and Mexico. "We'd have five or 10 things we wanted to accomplish in a day and we'd be lucky if we got one of those done."

You're willing to do some research

Some of the Web sites, magazines and newsletters about international living are also in the business of promoting real estate or tours, which means they have a vested interest in painting the best possible portrait of living abroad. They can also help you to find out about special programs that some countries have to attract retirees and any restriction that may exist on buying real estate.

You can use those resources for preliminary research, of course, and to get in touch with Americans who have moved to the country of your choice. Contact these expats to get a clearer idea of what life is really like there.

Many experts on living abroad also recommend renting a home in your chosen country for six months or so before deciding whether to move there permanently. Make sure your stay includes the time of year with the worst weather. By then, you'll be more certain whether you're making the right choice.

You have an exit strategy Regimes can change. Your health can decline. Prices can rise -- particularly if the tropical paradise you found gets discovered by lots of other ex-pats. (Of course, if you bought real estate there, it might be a good thing.)

Then there are the horror stories:

In Mexico, about 350 American retirees were evicted from their homes in Baja California's Punta Banda two years ago after the country's Supreme Court ruled that they leased the property from the wrong owners. Some of the retirees had poured their life savings into homes they had built on land that was supposed to have been theirs for 90 years, leaving them with few resources to restart their lives.

Foreign retirees in Spain face losing property and houses to eminent domain decisions -- the government plans to seize the land to promote more development. Not only will the owners not be compensated, but they are often asked to pay huge assessments to help build the roads for new development.

So no matter how much you think you're going to adore your new country, remember that a day may yet come when your love affair goes awry.

Consider setting aside enough resources so that, if you need to, you can come home again.

Phased Retirement: Will It Become the Norm?

Retirement is a strong word and evokes strong emotions. In the young, it brings joy, visions of freedom and pursuing lifetime dreams; but, as that time of life approaches retirement may conjure up anxiety, worry, fear. Why? Money. Will we have enough to maintain a comfortable lifestyle, maintain our health, afford medical expenses, pay for the increasing costs of ordinary needs such as food, gasoline, property taxes, not outlive our retirement nest egg, are some reasons.

So, we look at ways to have the funds to live, and often this includes the decision of when and how to retire. A new retirement path has been emerging for some time: Phased Retirement.

The article below is a great overview of phased retirement - the benefits and obstacles. The studies are several years old, but are still relevant as the issues are still with us, and still need solving. I hope this article will provide some food for thought as to how we will finance our "golden years", and motivate some of us to take steps in the right direction.

Have a great day

Gloria

Older Americans: Retired or Still on the Job?

By: Jacque L. MillerFamily Resource Management Specialist

After declining in the 1970's and 1980's the number of older workers has been increasing steadily.

Fast Facts

Among men aged 55 - 64 who received income from a private pension or retirement savings plan during 1999, about 37 percent were employed either full or part time in March 2000 - an increase of more than four percentage points over the comparable rate in 1994 (Purcell, 2000).

In the past year, as the economy has weakened and unemployment has risen, the labor force participation rate for older workers (age 55 - 64) has jumped 2 percentage points - an increase unprecedented in post-war economic history (Eschtruth & Gemus, 2002).

Ninety five percent of people ages 55 - 64 who are still working plan to get another job after they retire (Kadlec, 2002).

Factor Influencing Older Worker to Stay on the Job

Besides plunging stock portfolios, other factors have contributed to older workers postponement of retirement and convinced other early retirees to rejoin the labor force.

Public policies and private institution changes may be encouraging later retirements. They include:

Elimination of age discrimination rules.

Social security is no longer growing more generous.

Rise in the Social Security normal retirement age.

No incentive to retire at a particular age.

Coverage under company pension plans has shifted from defined benefit
plans to greater usage of defined contribution plans, such as the 401 (k) in
which balances have been shrinking despite record amounts of new investments.

However, for many, money is the object. The decision to keep working is strongly based on financial need (68%) or the desire to build up income (64%) (The Conference Board, 2002).

High Expectations for Retirement

Americans continue to have high expectations for their retirement lifestyle. They are interested in pursuing their unfulfilled dreams, leisure interests, and/or contributing to society through volunteer activities.

The 2003 Retirement Confidence Survey shows:

Only 21% of workers feel very confident about having enough money to live
comfortable in retirement and 45% feel somewhat confident.

31% of worker who plan to retire think they can live comfortably in
retirement on less than 60% of their current income. Many financial experts say
that retirees will need at least 70-80% of their pre-retirement income to live
comfortably in retirement.

61% of workers have not calculated how much money they will need to
save by the time they retire.

Wide spread lack of knowledge and apathy about money management issues are evident in current saving and consumer debt statistics show (Kadlec, 2002):

Nearly half of all households did not save a penny last year

Revolving consumer debt over the past five years has soared to
30%

The median savings for boomers at age 55 are just at $25,000 -
not accounting for debt.

Without more personal savings and larger contributions to
retirement during working years, neither early retirement nor the ability to
maintain a current lifestyle in retirement will be realizable goals for many
Americans.

Phased Retirement an Option

In the traditional view of retirement, a worker moves from fulltime employment to complete withdrawal from the labor force in one step. Given that the labor force growth is slowing and Americans are enjoying longer and healthier lives, efforts to encourage older workers to stay in the labor force could have important benefits for individuals and the nation's economy. (Burtless & Quinn, 2002)

If the average age of retirement declines it will impact the growing national burden of paying for Social Security and Medicare (Williamson & McNamara, 2001). Additional ways need to be found to keep more people in the labor force beyond their mid sixties.

Older workers planning to retire within five years are receptive to remaining with their current employers through part-time or flexible work arrangements (The Conference Board, 2002).

Phased retirement may be an option that could bring balance to the labor market and benefit both workers and employers. Workers gain some of the benefits of early retirement and employers retain the services of valued workers.

A study of 586 firms conducted by the benefits consulting firm of Watson Wyatt Worldwide found that only 16% offered some from of phased retirement to their employees. According to the data collected from the firms offering some form of phased retirement: (Purcell, 2000):

75% said they rehire retire employees on a part time or temporary
basis

42% said they contracted with retired employees after they retire

60% said they allow retirement eligible employees to work fewer days
per week or fewer hours per day

32 % said they allow employees not ready for fully retire to transfer
to another job within the firm

23% said they provide extended leaves of absence; and

19% said they provide job sharing.

Despite an aging work force caused by the graying of the baby boomers, most companies are not actively encouraging their older, more seasoned workers to remain with them (The Conference Board, 2002). There are legitimate barriers and questions as to whether the combination of partial work and partial retirement will work (Wiatrowski, 2001),

Current Federal tax law prohibits in-service distributions form (sic) an employer's retirement plan. A person cannot continue to work and also receive benefits from a retirement plan.

Most defined benefit plans include a formula that bases benefits on earning in the final years to retirement. If an individual entered a phased retirement program, with reduced hours (and commensurate reduced salary), would the lower salary affect the calculation of future retirement benefits?

Do years of service continue to accrue if an employee works part time and
receives a partial pension?

How do years of part-time service affect the calculation of total years
on the job?

Are benefits recalculated after the employee cease work all
together?

The Dialogue Continues

This issue is clearly on the minds of policy makers and there is an ongoing effort to come up with solutions to this multi-faceted problem. Phased retirement is just one of the topics of discussion in the debate over retirement. A continued dialogue is needed among employers and others to proactively address the challenges of a maturing workforce. Future successful retirement programs will need to:

enhance the employment relationship,

promote the development of more effective management tools,

be flexible, understanding the motivators for continuing to work are
diverse, and
maximize the contribution of the older person both within and
outside the workplace.

Web sites that provide additional information regarding research and policy surrounding this issue are:

The Center for Retirement Research at Boston Collegewww.bc.edu/centers/crr

This site provides publications, research, data and links. Internet searches can locate information about retirement decisions quickly with the search feature. "Issues in brief" provides concise, timely analyses of important retirement policy issues by e-mail for those who request it. "Just the Facts" series offers brief explanations of new research findings, interesting data and current policy issues.

Michigan Retirement Research Centerhttp://www.mrrc.isr.umich.edu/

The Michigan Retirement Research Center (MRRC) serves as a national research and education resource, benefiting the public through information directly related to Social Security, pension, and retirement-related policies.

National Center for Policy Analysis [NCPA]http://www.ncpa.org/

This Web site contains news, discussion of issues, and more. The "My Social Security" pages provide a comprehensive look at social security issues. This site has publications, Expert Advice, (pro and con), Quick facts, and links for a comprehensive look at topics related to Social Security.

National Older Worker Career Center [NOWCC]http://www.nowcc.org/

National Older Worker Career Center provides professional, technical, and administrative work opportunities to older workers through the EPA's Senior Environmental Employment (SEE) Program. The "Issues and Perspectives" section includes a helpful online resource library with articles about changing demographics, phased retirement, legal issues, opportunities for older workers and more.

Conclusion

Will older American retire early or still be on the job? To make the best decisions, workers must be aware of their options in order to take responsibility for the choices they make throughout their lives. If Americans choose to spend more years in retirement and enjoy their current living standard, they must plan continually and up their savings. Planning for retirement is more important than ever.

Americans will also need to address the current challenges of low saving rates, high credit indebtness, inadequate financial preparations for retirement, limited financial assets, and lack of understanding of increased retirement needs due to living longer and upward spiraling health care costs.

Another way to overcome some of the financial burden for both individuals and the national economy is phased retirement. Besides freeing up or conserving resources, older individuals themselves may derive social, economic and psychological benefits from continued labor force activity.

Policy makers, employers and other leaders will need to address the challenges of a baby boom generation nearing retirement.

_____________________________________________
References

Burtless, G. & Quinn, J. (December 2002). Is working longer the answer for an aging workforce? Issues Brief No. 11. Washington, DC: Center for Retirement Research at Boston College.

Employee Benefit Research Institute, American Savings Education Council and Mathew Greenwald & Associates. (2003, April 11). Retirement anxieties grow, but overall confidence changed little despite sagging stock market. Retrieved April 15, 2003 from: www.ebri.org/prrel/pr628.pdf

Eschtruth, A. & Gemus, J. (September 2002). Are older workers responding to the bear market? Just the Facts on Retirement Issues. Number 5. Washington, DC: Center for Retirement Research at Boston College.

Kadlec, D. (2002). Everyone back in the labor pool. Time, July, 22 - 31.

Purcell, P. (2000). Older workers: employment and retirement trends. Monthly Labor Review, October, 19-20.

The Conference Board. ( 2002, December 2). Voices of experience: mature workers in the future workforce. (Research Report #1319-02-RR). Retrieved on April 3, 2003 from: www.conferenceboard.org/utilities/pressPrinterFriendly.cfm?press_ID=20
Wiatrowski, W. (2001). Changing retirement age: ups and downs. Monthly Labor Review, April, 1-2.

Williamson, J. & McNamara, T. (2001). Why some workers remain in the labor force beyond the typical age of retirement. (Research Report CRP WP 2001-09). Chestnut Hills, MA.: Center for Retirement Research at Boston College.
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