Cost of retirement: More expensive than you might think

The cost of retirement can vary dramatically depending on where you live and what choices you make before you retire.
Ideally, you want to have enough social security and investments to maintain your current lifestyle.
While investment advisers routinely say $1 million in investments will ensure a happy retirement, this is not necessarily true. In high-tax states with high cost of living, a big retirement pot is probably essential. But, in lower tax states with lower cost of living, retirees might need about a fourth of that amount.
The key question is how you prepare before retirement.

  • Run the numbers. Check with Social Security for an estimate of retirement income. But, remember your Medicare and taxes will be deducted from social security, so that number will be lower. For other income, you will be paying cash for taxes. Look at all your expenses. Medicare plus supplements and prescriptions could run more than you think. For example, some prescriptions could cost $100-$300 per month, even with a prescription plan.
  • Get out of debt. The best strategy is to be out of debt before retirement. Aim for zero credit balances.
  • Pay off the mortgage. In some cases, holding a mortgage might be financially wise, depending on how much your investments are making as opposed to the interest rate on your mortgage. But good general advice is to pay off the mortgage before retirement.
  • Transportation. Plan to have a late model car that is paid off before retirement. A car payment soaks up retirement funds.
  • Emergency fund. Build one with at least 3 to 6 months of expenses. Emergencies won’t stop just because you are retired, and you won’t have money coming in. You must avoid credit card debt.
  • Long-term care insurance. Plan early to buy long-term care insurance when prices will be lower.

The Golden Years in business

“What am I going to do with all this time?”

That’s a question retirees often ask themselves these days. The trend of retired Americans or those close to it is to keep working. Some need income; others use it for travel and leisure activities, hobbies, or purely for the personal fulfillment of work and staying involved with others.

In March of this year, the second annual Small Business Survey revealed 65% of more than 5,000 Americans polled said they envision opening a business when they retire.

These results are not surprising, according to Dr. Luke Pittaway, Professor of Entrepreneurship at Ohio University. People are living longer, he says, and more than ever before are choosing to start a business to stay active.

According to The Balance Small Business, any service that consumers and companies will pay for can be turned into a business. Among them are accounting, bookkeeping, handyman, landscaping, pet care, and more.

Freelance writing is more popular than ever with blogging, writing for businesses large and small, e-books, and memoirs, among others. Self-publishing is fast and affordable these days.

Nearly any hobby can be turned into a business too. How about gardening? Baking? Photography? A musical instrument?

Contact your former employers to offer your services. Access your network to find potential clients.

Starting a home-based business enables the retiree to profit from decades of experience in his or her profession. Selling one’s skills through a service-based home business is one of the fastest and least expensive ways to start making money at home. At or near the top of the possibilities are consulting and coaching. Both can be performed at home and enhanced by online tools.

Should you sell or buy a home in 2020?

According to Forbes, today’s mortgage rates — at about 3.75 percent — will stay low in 2020. At the same time, market watchers expect home prices to continue to escalate due to low inventory and high demand.
Without more listings on the market, competition will increase early in the year. Entry-level home prices will rise higher than incomes. Low-interest rates and the lack of starter homes will continue to raise prices.
Housing inventory will remain soft through most of the year. As one real estate agent remarked, “You can’t buy what’s not for sale.”
According to the National Association of Home Builders, new construction in late 2019 reached a 20-month high. Even so, months may be needed before building can sustain demand. reveals Millennials constituted almost half — 46 percent — of mortgage originations in September 2019, up from 43 percent in 2018. At the same time, Baby Boomer and Gen X mortgage activity faded.
If today’s older adults (born between 1931 and 1959) behaved like previous generations, more than 1.6 million homes would have been on the market in 2019.
But Boomers are staying in their homes, not downsizing as did previous generations. One factor: Older people are working longer. Another factor is that young people are staying at home longer. In 2016, 16.1 percent of senior households had younger generations living with them, up from 14.4 percent in 2005, according to Trulia and Census figures.
As for homeowners, should they sell in 2020? According to the Federal Reserve, household equity in real estate has more than doubled since its shortage in 2012. Mortgage equity is at an all-time high
Homeowners with the flexibility to move in the next few years may be assuming that when they’re ready, the market will be as inviting as it is today. This is not necessarily true, and some vital housing-market drivers suggest 2020 could be a sweet spot for selling a home.
Mortgage interest rates are low. Potential buyers track them carefully. That’s a pleasant tailwind for buyers interested in a homeowners’ property,
Has the time come to book their profits and move on?
Only the homeowner knows.

Prevent hacks into home security system

The latest home security gadgets are a far cry from the early days of simple motion detectors. Whether it’s the Ring video doorbell, which alerts you to someone at your front door (and allows you to talk to them), or other systems that use facial or voice recognition, we’ve got cameras and eyes everywhere.
The downside, of course, is the potential for hackers to access those cameras and find their way into our homes.
Consumer Reports offers tips to keep our home security cameras from being hacked:

  • Keep your camera’s firmware up to date. Some cameras automatically download and install these updates, which fix software bugs and patch software vulnerabilities, while others require you to check for updates on your own.
  • Change your camera’s password. You should approach your security camera’s password the same as your other devices and use long and complex passwords without personally identifying information.
  • Set up two-factor authentication if possible. This means the camera company sends you a onetime-use passcode via text, phone, email, or authentication app that you input in addition to your username and password when you log in to the account. As CR points out, even if a hacker cracks your password, they won’t be able to access your camera unless they also gain access to your onetime code.
  • Set up a password manager. A password manager generates strong, random passwords and stores and remembers them for you. Many are free.

Time to get happy!

Get up, get out, and get happy. Experts say that even if you have to fake it, you’ll soon be merry — or at least a little happier.
People can have a good reason to be wistful or even blue at the holidays. Family members are not always near, or physical conditions can limit activities.
Strange that just when we can’t remember where we put the car keys, memories from 30 years ago are accessible in every detail. It’s great to remember the good times, but to be happy today we need to stay in the present.
According to happiness guru Gretchen Rubin, the key is to actively plan for holidays and make new memories. Here are some ideas:

  • Consider some things you have loved: Songs, gift-giving, family. Start asking around early for churches that have carols and holiday activities. If you need a ride, ask at the church office.
  • Find out who needs a gift and give it!
  • Gather your own ‘family’ of neighbors and friends for a pitch-in dinner. It doesn’t have to be on Dec. 25.
    The bottom line: Make a plan and get out of the house.
    Do ask others about their plans; people often love to share holidays.
    Be grateful for the holiday you make for yourself. Don’t compare this holiday to happier times in the past and try not to compare this holiday to the one you imagined it would be. Create something for yourself and enjoy it, whether it is a modest decoration and dinner with a friend, or an all-out bash.

Best wishes for the holidays

From November to January, we have a pleasant, and sometimes hectic, list of things to do and people to see. It’s a bit of a roller coaster, but I hope you all manage to enjoy the ride.
And, I hope you do it with safety in mind. Shorter days, perhaps bad weather and slippery roads can all get in the way of our rush to finish our holiday plans. Patience, my friends. Let’s all see the new year in with health and happiness.
It seems such a short time ago that we were talking about our plans for 2019. Now, we are in the last phase of the year and rushing to the finish line. The year’s not quite over, however, so the work done between today and New Year’s Day will count and count a lot. Thank you for all your good humor and good work.
We can all be thankful for the many blessings of our work, homes, and holidays.
So to all: Merry Christmas, Happy Hanukkah, and Happy New Year!

That jingling you hear may not be bells. Could be what’s left in your pocket.

For those caught up in the buying frenzy of the holidays, Christmas Eve could find them with a handful of change in their pockets and little else.
Of course, every year you think you’ll avoid the rush by accumulating gifts throughout the year. That would be smart, but it doesn’t do much good in November and December and the shopping list looms.
A survey by The Wall Street Journal shows that more of us are controlling credit card debt by adopting new traditions that reduce the loot under the tree.
Women do most of the Christmas shopping, says Eileen Fischer of York University in Canada, who studies consumer behavior. They give gifts to reinforce relationships with spouses, kids, in-laws, co-workers, friends and helpers.
Here is some classic advice on keeping your holidays affordable:

  1. If you have a multitude of relatives to buy for, talk with them about exchanging cards this year. They will be happy to do it in most cases.
  2. Decide in advance how much you will spend on gifts.
  3. Give gift certificates to teens. They keep you within your specific amount, and teens enjoy shopping.
  4. Skip the stocking stuffers.
  5. Shop with a specific list, especially online where easy clicks add up to big money.
  6. Don’t buy for yourself at the same time. Stick to the project.
  7. Financial advisor Jane Bryant Quinn says: Add up your consumer debt and write the number at the top of your shopping list or computer.
  8. An advantage of buying less: Less time spent opening gifts. It can drag on and on for a large group.
    The holidays are more joyful when you know you can pay the bills as they arrive in January.

Little shoppers learn realities of money

Christmas shopping is here and your kids will want to be part of it. It’s a good time for a little value teaching.
Help your child make out a list of people and consider what gifts are within a budget you have set.
For younger kids, try shopping in real stores with real cash. One of the best ways to teach money management is to give them some money to handle. They can shop for gifts, while keeping track of the money left for the next gift.
It is never too early to start teaching your child about money. The best time to begin talking to children about money is when they start asking for things. Even a 5-year-old demanding a toy can be taught the value of money and the cost of things. He can also be taught that he has an option to save the money instead.
Your daily routine provides many opportunities for lessons. Talk about how you spend and save money. Show them your grocery list and explain why it is a good idea to make a list. Show
them how a debit card works, being sure to point out that the money is subtracted immediately from your bank account.
Linking an allowance to chores depends on parental goals. If the goal is to teach the child how to manage his money, it is best not to link the work with the money; if the goal is to teach that some things must be earned, an allowance paid for chores could help in that lesson.

What to consider when getting out of a rental and taking a mortgage

You have many factors to consider in your journey to home ownership.
Here are some basic considerations:

  • If you can make a down payment of 20 percent, whatever mortgage you choose, you won’t have the cost of mortgage insurance added to your monthly payment. Many buyers can’t come up with the large down payment, but mortgage insurance is only charged by mortgage companies until equity reaches 20 percent.
  • Many conventional mortgage lenders ask for 5 percent to 10 percent down.
  • What is your credit score? To qualify for a conventional mortgage, you need a score of 620 to 640 or higher. But if your score is at least 580, you can still quality for an FHA mortgage.
  • The big advantage of an FHA mortgage is its low down payment requirement, just 3.5 percent. They account for 30 percent of all mortgages today. But if you have to move in very soon, beware, it takes a longer time to get one.
  • If you have a credit score lower than 580, you still might be able to get an FHA loan with 10 percent down.
  • How long will you stay in the house? If that might be for just a few years, an adjustable rate mortgage might be a good choice. Consider it if you are in the military, your job requires you to move every few years, or if this is just a “starter house” for you.
    If you plan to live in the home for a lifetime, a 30-year fixed rate, or a 20-year fixed rate, would be better. Or, if you can afford the higher payments on a 15-year fixed rate mortgage, you’ll get the best interest rates of all.
  • The VA loan is for service members or (this is important), for former service members.

The impact of target marketing in small business

Target marketing, according to Inc., is collecting information to determine your ideal customers among those who also need and will pay for your product or service.
For these purposes, you need their age, gender, family size, education level, and occupation. To find out where they are, you need their zip codes, size of the area, its population, and climate.
How does your ideal customer decide to make a purchase? The answer helps you determine why they buy what you’re selling, how much of it they need, and how often they must buy it.
Most social media profiles for your business provide a free demographic breakdown of customers like yours. Zip Codes can furnish vast amounts of info from the U.S. Census Bureau.
If you’re currently in business, your sales data clearly show what your customers are buying, when, and their purchase prices, among other data. For the essential feedback, talk to them in person or on the phone, conduct a few customer surveys. You don’t need a ton of responses to acquire a pretty good sense of your customer base.
In addition to the basic demographics, these should be among the takeaways from your target customers:
Is the distance to your location a problem? Parking? Public Transportation? Do, or can you, deliver?
How do they make a living? Knowing what your primary customers do can help you adjust your hours to fit their needs or devise special offers. Having an idea of the money they can or are willing to spend can help with your pricing. With this kind of information, you can confirm some of your assumptions regarding your customers and dismiss others.
Practical target marketing is almost always beneficial. And genuine interaction with your patrons — plus giving them what they want — is almost always a pathway to loyalty and future growth.