Should I Retire?

Senior Thursday

One question more and more seniors are grappling with is whether or not it is the right time to retire.  With the cost of living going up, but income not keeping pace, coupled with the stock market collapse a few years ago, the question isn’t as easy to answer as it used to be. 

Another reason it can’t be answered easily is that everyone’s situation is unique.  We all have different levels of income, varying amounts of debt, and different health concerns.  Nobody’s portfolio (if you even have one) is the same, either.  Add factors such as health and life insurance coverage, ages of your children and grandchildren, your company’s pension plan and you start to see how the answer for you will be completely different from your neighbor or brother’s answer. 

If you’ve been earning a decent pay since college graduation, have put your children through school, and they are financially secure, you’ve grown your portfolio to six times your annual income, and your health is good, you can comfortably retire at 60 or 65.  However, if you’ve been living paycheck-to-paycheck all your life, have medical bills to pay and only one year’s income invested with no company pension, then you may have to work well past 60 or 65 just to make ends meet.

Your financial advisor and accountant can best help you answer this question.  In order to arrive at the best answer, though, you should have the following information/documents together for review:

·        Previous year’s tax return

·        Current pay stubs

·        Most recent statements from investments

·        Most recent statements from bank accounts

·        Summary of monthly expenses (mortgage/rent, food, pets, transportation, utilities, etc.)

·        Summary of assets (real estate, vehicles, savings accounts, etc.)

·        Most recent Social Security Statement

·        Most recent pension statement

·        Life Insurance policies

·        Health Insurance policies

You are never too old to start planning.  But beginning early will help make your retirement years as comfortable as they can be.

How to Choose a Reverse Mortgage Company

Senior Thursday

These last two weeks we discussed the basics of a reverse mortgage and the steps in obtaining one.  This week, we'll look at how to select a reverse mortgage company that you can trust, and the qualities you should look for in a company.

First, look for a company that will educate you on the products and help you make the decision that is best for you.  Everyone's situation is different, so it is important to choose a product that will benefit you.

Second, find a company that offers a wide variety of products.  From jumbo loans for high-value properties to smaller products for modest homes, the company you select should be able to handle the size loan you need.

Third, what sort of service and support do they offer?  Are they available by phone or email when you need them?  Or is it difficult to get through to someone when you need them?  Your company rep should be accessible.

Fourth, how quickly can they close the loan?  Will you have to wait several months?  Or can they close it in four to six weeks?

Finally, how do they treat you as a customer?  Are they committed to helping you improve your life?  Or are they just after your business?   Find a company that wants to help you improve your financial security and well-being. 

Consult Ken Dellutri, Reverse Morgtage Specialist with American Portfolio Mortgage to see how a reverse mortgage can help you.  888-302-2762

Overview of Reverse Mortgages

Senior Thursday

What is a Reverse Mortgage, and how does it help seniors?  A reverse mortgage allows seniors to tap into the equity they've built into their home.  It's a loan against the home, and it doesn't have to be paid back for as long as the senior lives in the home.  The money is generally tax-free because it's not considered income. Nor do the funds affect Social Security income.

Homeowners over the age of 62 who have equity in their home, and that home is their primary residence, qualify for a reverse mortgage.  The amount of the loan is determined by the homeowner's age, the total value of the home, and the amount of equity in the home. 

Monies can be distributed as a lump sum, or in monthly payments.  Homeowners can use the money any way they wish, whether it's to purchase a vacation home, help pay bills, or put a child through college. 

It's important to remember that the senior will still retain ownership of the home, and can never owe more than the home is worth. 

Consult Ken Dellutri, Reverse Morgtage Specialist with American Portfolio Mortgage to see how a reverse mortgage can help you.  888-302-2762

Tax Preparation Tips

Tips for Tuesday

It's already March, which means tax day is just around the corner. If you haven't prepared your tax return yet, here is a list of what you will need to prepare the return or bring with you to your accountant.

PERSONAL INFORMATION
Have on hand for each of your family members:
• Name and address
• Birth Date
• Social Security Number
Have on hand the following:
• Name, address, Tax ID or Social Security Number of child care provider
• Amount of alimony paid/received and Social Security Number of recipient

EMPLOYMENT AND OTHER INCOME
• W-2 forms for the tax year
• Unemployment compensation
• State and local income tax refunds
• Rent income from personal property
• Partnership, S Corporation, Trust, Estate income
• Pensions and annuities
• Social Security benefits
• Recovery of bad debts deducted in a prior year
• Alimony/Maintenance
• Scholarships/fellowships
• Jury duty pay
• Gambling and lottery winnings
• Prizes and Awards

SELF-EMPLOYMENT INFORMATION
• Business income
• Partnership SE income
• Business-related expenses (with receipts)
• Employment taxes and other business taxes paid

OTHER FINANCIAL ASSETS
• Interest income statements
• Dividend income statements
• Proceeds from broker transactions
• Retirement plan distribution

HOMEOWNER/RENTER DATA
• Mortgage interest paid
• Sale of your home or other real estate
• Second mortgage interest paid
• Real estate taxes paid
• Rent paid
• Moving expenses

EXPENSES
• Gifts to charity
• Unreimbursed expenses related to volunteer work
• Unreimbursed expenses related to your job
• Investment expenses
• Job-hunting expenses
• Job-related education expenses
• Tax return preparation expenses
• Adoption expenses
• Child care expenses
• Alimony paid
• Medical savings account
• Tax return

OTHER FINANCIAL LIABILITIES
• Auto loans and leases if vehicle used for business
• Student loan interest paid
• Early withdrawal penalties on CDs and other time deposits

OTHER TAX DOCUMENTS AND INFORMATION
• Federal, state and local estimated income tax paid (have payment records or vouchers)
• IRA, Keogh and other retirement plan contributions
• Medical expenses documents
• Casualty or theft losses documents
• Personal property tax information

Remember, if you want to claim it, you should have proper documentation. You should collect these receipts and papers throughout the year in an income tax file. This will make tax preparation much easier when the time comes because everything will be together.

Being Frugal with Finances

Frugal Friday

With the cost of everything rising, we are always looking for ways to reduce our bills. Over the last few months, we've been covering many different areas of our lives where we can do exactly that. This week, we're looking at how to be frugal with your finances.

• Pay someone to do your taxes for you. Yes, the initial outlay will cost you, but the increase on your return will more than pay for it.
• Avoid ATM fees. Don't use ATMs that are out of your network.
• Ask your credit card company to reduce your interest rate. If you've had the card for a while, and have always paid on time, chances are they will offer you a lower rate.
• Contest any and all bank and credit card fees that you think are unreasonable. Many will give you a pass on the first one or two infractions.
• Consolidate student loans,
• Purchase all your insurance through the same company for multi-policy discounts.
• Keep a record (video, photo or list) of all your possessions in case you need to make a claim.
• Pay your insurance premiums on an annual basis to avoid finance charges.
• Consider increasing your deductible to lower your premium.