life planning 2011

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DAILY NEWSNORFOLK

January 11, 2011

G U I D E 2 0 1 1 G U I D E 2 0 1 1

AN ESTATE PLAN ... AN ESTATE PLAN ... AN ESTATE PLAN ... WHO, ME? WHO, ME? WHO, ME?

Meet Your Financial Team

Pop Quiz: Test Your Pop Quiz: Test Your Financial Savvy! Financial Savvy!

�-A NORFOLK DAILY NEWS, TuESDAY, JANuARY 11, 2011

According to actuarial charts, how many years can you expect to live?

At what age is a worker born between 1943 and 1954 eligible for full social security ben-efits?a. 62 c. 66b. 64 d. 68

What percent of a retiree’s income will be spent on healthcare, on average?a. 5 percentb. 10 percentc. 15 percentd. 20 percent

How many years, on average, will a U.S. citizen spend in retirement?a. 10b. 15c. 20d. 25

Insurance is a way of:a. saving for a rainy dayb. preventing

unplanned eventsc. handling riskd. all of the above

Your credit score is:a. a snapshot of your

credit riskb. an objective mea-

surement used by lenders

c. available to you on request

d. all of the above

You can improve your credit rating bya. correcting inaccu-

rate information as soon as possible

b. disputing negative information

c. correcting only the worst report

d. asking that negative information not be included in your credit report

© CTW Features

Pop Quiz: Test Your Financial Savvy

Procrastination is one of the main ways the average Joe and Jane get in trouble with their finances. Break the bad habit – starting now! Answer these basic questions and see how you rate

HOW DO YOU RATE?

10 CORRECT: Warren Buffet is your

new best friend!9 CORRECT:

Close… but we are not playing horseshoes!

8 OR LESS CORRECT:It’s time to do some

homework!

1. The U.S. Social Security Administration estimates that a man reaching age 65 today can expect to live, on average, until age 83. A woman turning age 65 today can expect to live until age 85. To calculate your expected lifespan, go to: http://www.ssa.gov/planners/lifeexpectancy.htm 2. C: 66 years old 3. D: 20 percent 4. False. Pre-tax money a worker contributed to a retire-ment plan is subject to income taxes when it’s withdrawn during retirement years. 5. C: 20 years6. D: 47 percent 7. False. Every U.S. state has unique laws governing who will own the property. To calculate the out-come in your state, go to www.mystatewill.com8. C: Handling risk 9. D: All of the above 10. A: Correcting inaccurate information as soon as possible

© CTW Features

A

QUESTION

1

QUESTION

2

QUESTION

3QUESTION

5

QUESTION

8

QUESTION

9

QUESTION

10QUESTION 4:Income taxes go away after a worker ret i res. True or fa lse?

QUESTION 7:True or False: I f you die without a wi l l , your surviv ing spouse wi l l be granted al l or most of your assets.

WHAT PERCENT OF EARLY BABY BOOMERS, AGE 56 TO 62, ARE

EXPECTED TO RUN OUT OF MONEY TO COVER BASIC RETIREMENT

LIVING EXPENSES?

A. 17 PERCENT C. 42 PERCENTB. 23 PERCENT D. 47 PERCENT

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NORFOLK DAILY NEWS, TuESDAY, JANuARY 11, 2011 �-A


PEOPLE TEND TOdelay or avoid estate planning as though drafting a will might somehow hasten their demise. But thought of another way, estate planning actually pro-longs one’s presence

among the living. An estate plan allows for calling shots from the grave.

The value of proper-ty at the time of its owner’s death is an estate. Estate planning begins by taking inven-tory of someone’s assets, including invest-ments, retirement sav-ings, insurance policies,

real estate and business interests, and then deciding to whom these assets should go. Individuals also must decide who should handle financial and medical affairs if they are incapacitated and ask if they’ll serve as financial and health care powers of attor-ney, respectively.

It’s smart to work with a qualified lawyer to create the legal doc-uments that govern the process of protecting the estate and passing along assets as planned. Take time to get edu-cated on the basics before choosing a pro-fessional and sitting down to work on a plan.

A WILLThe centerpiece of a comprehensive estate plan is a will. The rea-son a will is important, regardless of net worth, is so assets go to the right people, says Alex-andra Armstrong, certi-fied financial planner with the Washington, D.C.-based investment advisory firm Arm-strong, Fleming & Moore. Die without one, and in most cases each state applies its

standard formula to decide who gets what, without regard to wish-es or the needs of heirs.

For example, in the absence of a will in the District of Columbia, only one-third of the deceased’s assets not jointly held will go to a surviving spouse; two-thirds goes to the chil-dren. In most places, when a single dies without a will, his or her parents inherit all assets or, if Mom and Pop are dead, the sib-lings inherit in equal measure. That means the brother who won the lotto gets the same amount as the brother who went into social work and the estranged sister with a gambling

addiction.A will is also the best

place to name guard-ians of children.

Standard forms are available for the sim-plest of situations. “But most people should consult an estate-plan-ning lawyer” for will preparation, Armstrong advises. Leave a copy of the will with a lawyer, and keep a copy.

A LETTER OF INSTRUCTIONA letter of instruction to survivors includes bequests not specified in the will, including sentimentally valuable possessions like Grand-ma’s china and the oil painting over the man-tel. Here’s where to

An Estate Plan… Who, Me?You don’t need to live in a fancy house in a gated community to have an estate. Establishing a solid financial plan, with documents that govern what you own and bequeath, is key to moving ahead in life with confidence and security

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GET ORGANIZED

Assemble and store these documents in a bank safe deposit box and/or a fireproof safe to which a trusted individual besides your spouse has access.

© CTW Features

PEOPLE TEND TO

communicate to family members the type of memorial service want-ed, including “in lieu of flowers” specifications and wishes to be cre-mated or buried. Indi-viduals might even write down key points for their obituary in case loved ones omit one of our prouder accomplishments.

A LIVING WILL A living will or advance medical direc-tive spells out wishes regarding life support or medical interven-tion and care. For someone in a coma who does not want to be kept alive on life support, a living will

spells that out. A health care proxy names a person to carry out those wishes. A lawyer can create this docu-ment. Keep signed, witnessed copies at home; give signed copy to those entrust-ed to make decisions.

Because of strict privacy rules that gov-ern doctors and hospi-tals set forth by the Health Insurance Por-tability and Account-ability Act, a HIPAA waiver also should be considered. This lets people name individu-als with whom health care providers can dis-cuss condition and care. Unlike a power of attorney, folks

named in the waiver are not entitled to make medical deci-sions on someone else’s behalf.

POWER OF ATTORNEYA durable power of attorney names a per-son to act on an individ-ual’s behalf in financial matters: investing money, signing checks, selling real estate. Keep a signed copy handy and give one to the per-son designated.

A TRUSTIn some cases, individ-uals decide to create a trust, which puts con-ditions on how and when assets will be

distributed. Trusts are designed to achieve different goals. Often, they allow the wealthi-er among us to reduce estate taxes. They can also be used to hold money for underage children; provide care for disabled children; or equalize inheritanc-es. A financial adviser can help determine whether it makes sense to set up a trust, Armstrong says. Keep in mind that retirement accounts such as IRA and 401k plans, have designated beneficiaries apart from what it says in someone’s will, Arm-strong says. So it’s important to review

and amend these accounts periodically – along with a will, pen-sion plans and life insurance policies – especially if marital sta-tus changes.

A rainy day fund of three to six months’ expenses is also a key component of an estate plan. “Settling an estate doesn’t happen over-night,” Armstrong says, “and meanwhile a sur-viving spouse needs something to live on, a cash reserve to carry them through.”

A final and crucial step in estate planning is assembling pertinent documents (see side-bar) and making sure a survivor is aware of and

has access to them. “You’d be surprised

by the number of life insurance policies that are issued but never paid because the survi-vors don’t even know they exist,” says Wayne Copelin, founder and president, Copelin Financial Advisors, Sugar Land, Texas.

He recommends keeping original docu-ments in a bank safe deposit box and a set of copies at home. It’s important to designate a signatory who is authorized to unlock the box in the event we die; otherwise, a court order must be obtained, he adds.

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PERSONAL FINANCE can be a source of stress, which is why a lot of folks like to rely on a professional when it comes to crunching numbers. Whether the goal is to dig out of debt or to get ahead on retire-ment savings – and stay there – turn to some-one trained and quali-fied to offer professional guidance in matters of saving, investing and planning to get on the road to

financial balance.Read on to learn

more about the pros to recruit for a top-notch personal finance team.

FINANCIAL PLANNER/ADVISERFinancial planners help clients invest and increase capital at an acceptable level of risk. “I look at my role as being the quarterback of the financial team, bringing all the other financially related peo-ple who a client inter-acts with together,” says Paul Winter, president of Five Seasons Financial Planning in Salt Lake

City. To do this, planners attempt to obtain a comprehensive look at clients’ entire financial situation – bank accounts, brokerage accounts, retirement accounts and other investments. Winter refers to him-self as “a conduit of information” and for-mulates plans for his cli-ents based on the information he collects regarding the client’s assets and goals. Inter-view a few planners before committing to one, and be sure to find out if the planner’s ser-vices are commission-

based or fee-based.

STOCK BROKERA broker isn’t just the person that carries out desired investment transactions. According to the Financial Indus-try Regulatory Authori-ty, a broker’s role is legally defined as a per-son or company that buys and sells stocks,

bonds, mutual funds and other securities on behalf of customers and/or for its own account. Brokerage firms fall into two cate-gories: discount and full-service. Transaction services from discount brokers are usually cheaper but come with little advice. For invest-ment counsel, investors can employ a full-ser-vice broker. To learn more about how to find a qualified broker go to www.finra.org and click on “Investors.” Use the FINRA BrokerCheck tool to track down background informa-tion on brokers.

INSURANCE AGENTLicensed insurance agents are essentially salespeople who pro-vide clients with life, health or property insurance policies. FINRA outlines two categories for agents: an independent insur-

ance agent who may represent multiple companies to find the best coverage for an individual client; and a “captive” agent who only recommends poli-cies from one company. Agents are licensed by the state. Find financial and disciplinary infor-mation on insurance companies nationwide on the National Associ-ation of Insurance Commissioners web-site, www.naic.org.

CERTIFIED PUBLIC ACCOUNTANTThose who are self-employed or simply have complex tax situa-tions should consider employing the exper-tise of a CPA. CPAs undergo rigorous certi-fication and licensing procedures in most states. As a result, they can handle the nuances of self-employment and can also provide some financial planning

Meet Your Financial TeamIt takes a team to make financial goals a reality. Here is the roster of folks you want to have working for you

TANIESHA ROBINSONCTW FEATURES

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QUESTIONS TO ASK A

FINANCIAL PLANNER

There’s no substitute for a face-to-face chat to decide if a profes-sional financial plan-ner is right for you. Among the questions you should ask:

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-sional or regulatory governing body for

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Source: www.ChoosetoSave.org© CTW Features

advice. Their services can be expensive. A cheaper option may be an enrolled agent, says Lauren Lyons Cole, financial planner in res-idence at LearnVest.com, a personal finance website.

ESTATE LAWYERShockingly, simply sign-ing away worldly pos-sessions on a cocktail napkin doesn’t pass muster for a will. That’s where a lawyer schooled in estate plan-ning comes in. This spe-cialized attorney will draft proper wills, living wills and trusts, which dictate how property and assets will be dis-tributed upon death or in the event one

becomes incapacitated. The more complex familial circumstances are – multiple marriages or children, for example – the more critical it is to have plans in place.

PERSONAL BANKERThe friendly faces at the bank are not just there to transact deposits and with-drawals all day. Person-al bankers can review accounts to determine eligibility for a higher-yielding account and if there are new credit or debit cards available that offer better rates or rewards. They will also field questions regarding mortgages or car loans and can put individuals in

touch with the appro-priate loan officer.

AT-WORK HUMAN RESOURCES PRO-FESSIONALLyons Cole says that HR managers are some of the most underutilized financial resources. They know the details about the company’s insur-ance policies and 401(k) or other retire-ment programs spon-sored by the company. “That’s really their job, to provide for their employee in many financial spheres so employees can go to work, be productive and not have to worry about benefits,” Winter says.

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Financial Planning TimelineHow to think smarter and plan better in money matters at all stages of life, from tots to retirees

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GOOD FINANCIAL habits start early. The very best last well into old age. For those some-where in the middle and still trying to figure it all out, there’s help. No mat-ter what stage of life, a person can always take steps to improve his or her finances, says Julie Jason, president of the Jackson, Grant Investment Advisors, Stamford, Conn. Here are tips on what family mem-bers need to think about and plan for at all stages of life, from childhood to retirement.

If little ones start to learn the basics of money management as they grow, perhaps they can avoid the debt and exu-berant spending habits that plague many adults. It’s important to teach children that every dollar they receive is not a dol-lar they can spend, says Manisha Thakor, personal finance expert for women and author of “Get Financially Naked,” (Adams Media, 2009). Kids should learn to divide allowances into three buckets: one for savings, one for charity and one for spending. Thakor recommends parents help children allocate 10 percent for savings, 10 percent for charity and 80 percent for spending.

Help kids learn to save: Fiddle with the online allowance calculator at www.threejars.com to come up with a weekly sum that’s reasonable, based on the age of the child and the parent’s own experience.

As kids approach their teenage years, they can start to grasp the truth in the old adage “money doesn’t grow on trees.” Thakor tells teens to think about how many hours they would have to work to earn enough to buy an item they want. This way, they begin to understand how much labor really goes into an iPod or Xbox pur-chase. Encourage a teen to find a part-time job, and share your views on money mat-ters and what you’ve learned about saving and spending.

Required reading: Jean Chatzky, award-winning financial journal-ist, wrote “Not Your Parents’ Money Book: Making, Saving and Spending Your Own Money,” (Simon & Schuster, 2010) to help start teens on a path to financial success.

A new couple’s main financial goal should be to build a solid foun-dation that includes an emergency fund to cover three to six months of living expenses, Thakor says. However, this should happen only after each partner pays down any debts they may have accumulated before marriage. Thakor urges newlyweds to conduct financial check-ins on all assets at least semi-annually. Couples should save 20 percent of their income, Thakor says.Investment smarts: If

your employer offers a tax sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your com-pany may kick in more, and automatic deduc-tions make it easy.

>> CONTINUED ON PAGE 14

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CHILDREN TEENS COLLEGE STUDENTS NEWLYWEDS

The average college-age credit card holder carries a balance of more than $3,000, according to Sallie Mae. Fortunately for frisky, young credit users, credit card reform mea-sures that started roll-ing out in 2010 make it more difficult to over-load on credit and debt, requiring anyone under age 21 to show proof of income or get parents to co-sign in order to get a credit card. College students shouldn’t avoid credit cards completely, how-ever. A student should get one credit card in his or her name; moni-tor his credit record at the three major agen-cies; and pay off the bill every month. Used responsibly, a credit card can help young adults build a strong credit profile.

Investment smarts: If

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The minimum age to receive Social Security benefits is age 62, but delaying to a later year will mean a bigger monthly benefit. Generally, government- sponsored Medicare health insurance is available to those age 65 and older. At 66, those born between 1943 and 1954 are eligible for full Social Security benefits.

Jason says that those at age 65 must realize that they’re targets for every ambitious financial advisor. “Put on a skeptics hat,” she says. Retirees should interview professionals to make sure they have prior experience with retirement accounts and clients in financial situations similar. Making decisions for a $100,000 account is very different from making decisions for a million-dollar

Once the storks start dropping baby bundles at the doorstep, it’s time to think about life insurance. Whole life insurance is expensive and unnecessary in Thakor’s opinion. She suggests acquiring term life insurance instead, which provides coverage for a set time period - usually five to 30 years - at a fixed rate.

Keep retirement saving in mind, despite the focus on children. You can put $5,000 a year into an Individual Retirement Account (IRA) and delay paying taxes on investment earnings until retirement age. If you don’t have a retirement plan (or are in a plan and earn less than a certain amount), you can also take a tax deduction for your IRA contributions.

“The challenge as you enter into these years is to avoid lifestyle creep,” Thakor says. “It’s very easy to start living beyond your means. The more you earn, sometimes the more you spend.” This presents a big problem for savings for a couple’s retirement and their children’s college education. Thakor has noted another dangerous trend in this age bracket: risky investments. An investment portfolio at this age should be a low-cost, high-quality mix of stocks, bonds and mutual funds that grows conservatively over time, she says.

“Fifty is the time of preparation and a time of opportunity,” says Julie Jason, author of “The AARP Retirement Survival Guide: How to Make Smart Financial Decisions in Good Times and Bad,” (Sterling, 2009). Make catch-up contributions, an extra amount those over 50 can add to 401(k) and other retirement accounts. At age 59 1/2 you will no longer be hit with tax penalties on withdrawals from retirement accounts, but leaving money in means more time for it to grow.

Imagine you’re retiring on Monday and need to calculate how long your funds will last. Jason says this scenario forces people to look at their expenses, savings and income sources outside of work. “If you do the analysis, you can adjust your savings and investing,” she says.

account, Jason says. “Now is the time to review assumptions and make adjustments to your cash flow and to your investments,” Jason says. At the outset of retirement, people assume that healthcare will be their greatest expense. It turns out that the largest expense is most often taxes. Plan to begin taking minimum withdrawals from most retirement accounts by 70 1/2 or you may be charged a penalty.

Healthcare and legacy planning should come into the picture around age 85, Jason says. Long-term care for husbands and wives should be determined. “At a certain point you have to bring in your spouse and see if you’re in sync with each other,” Jason says. She reminds retirees to include the desire to leave an inheritance in their planning.

© CTW Features

MARRIED WITH A FAMILY College planning: The College Savings Plan calculator at the financial education website www.mindyourfinances.com, can help families develop or fine-tune a college savings plan, factoring in number and ages of children in the family. Click on “Financial Tools.” 30 s AND EARLY 40 s Start early. Make retirement saving a priority. Devise a plan, stick to it and set goals. Grab a quick estimate of your retirement needs using the “Ballpark Estimate” tool at www.choosetosave.org/ IN YOUR 50 s Get Going! Are you on track financially for a comfortable retirement? The Financial Planning Assoc. offers an interactive Financial Roadmap tool to help highlight areas where you need to improve: Go to www.fpaforfinancialplanning.org/ and click on “Financial Roadmap” under Tools & Resources. IN YOUR 60 s Learn what your estimated social security benefit will be at retirement by using the retirement estimator at www.ssa.gov/estimator or call 1-800-772-1213.

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IT DOESN’T MATTER if every penny is pinched. A calamity can arrive unannounced and wipe out any fami-ly’s financial security. The only way to ensure protection is to start

paying attention to the invisible risks that could lie ahead.

It’s not easy, though, to get a focus on the insurance protection a family really needs – and can afford. Here, experts share tips for those who want to guard their financial security – without

wasting a penny:

LIFE INSURANCEEven the financially unsophisticated have heard about life insur-ance, an insurance poli-cy that pays a sum to a spouse, or provides for children or other dependents should one suddenly pass

away. In fact, that’s the central reason to buy life insurance: to replace the income dependents would need, says James Hunt, a former Vermont insur-ance commissioner who now analyzes life policies for the Con-sumer Federation of America.

“Term” life policies are the least expensive, which is why it’s often the choice of young adults who have responsibilities, such as kids and a mortgage, but not a lot of extra cash, Hunt says. The premiums for term life insurance only pay out should you die during the specified period.

“Permanent” life insurance pegs a por-tion of each premium payment as savings, which the insured can borrow against – or in some instances, with-draw from – to pay for certain expenses, explains Catherine Theroux, a spokeswom-an for LIMRA, an insur-ance research group.

Permanent insur-ance comes in two main types: whole and universal. Premiums for whole life policies tend to stay level, while pre-miums for universal pol-icies allow you to elect to pay certain mini-mums, with a lesser investment build-up over time.

YOUR ACTION PLANContact agents in your area to investigate pos-sible prices and cover-age plans. Check with current car or home-owner’s insurance companies to see if they provide life poli-cies as well. Speak to your employer’s human resources department about potential life policies available as part of its group benefits.

DISABILITY INCOME INSURANCEDeath is certain. But none of us know whether an accident or serious illness will pre-vent us from working for a prolonged period.

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NORFOLK DAILY NEWS, TuESDAY, JANuARY 11, 2011 11-A


According to the Insurance Information Institute, 43 percent of workers between ages 40 and 65 will suffer a disability that causes an earnings disruption of at least 90 days. The Social Security system has a disability benefit pro-gram, and many lower income workers depend on this, Hunt says. Some employers also offer disability coverage as part of their group benefits.

For those who are high earners but do not have an employer-based disability plan, neglecting to purchase private disability cov-erage could mean a dramatic change in life-style should they be injured or unable to work and their pay-checks stop, says Jef-frey Shaw, executive director of the Life Insurers Council.

Purchasing a plan on your own is similar to buying term life; there are various cov-erage levels and prices.

YOUR ACTION PLANTalk to your employ-er’s human resources department about what disability policies are available as part of the group benefits. Your state’s insurance department will have names of agencies and companies offering policies in your state; find them at www2.iii.org/stateorganiza-tions/. Visit the Social Security website at

www.ssa.gov/disabili-ty/ to learn more about disability programs.

LONG-TERM CARE INSURANCEIn our aging society, nearly everyone knows someone who needs years of nursing care, which can quick-ly put a drain on life savings. Fortunately, as long-term care needs become more preva-lent, insurers are offer-ing more ways to insure against the cost.

For instance, many states now participate in a “Partnership for Long-Term Care” pro-gram – a cooperative program between state governments and insur-ers that “is one of the best-kept secrets,” says Jesse Slome, executive director of the Ameri-can Association for Long-Term Care Insur-ance.

The partnership programs allow more affordable long-term care insurance and provide special asset protection. Private insurance agents sell the partnership plan and traditional long-term care plans.

The cost of long-term care plans varies, depending on the amount of coverage and whether home, assisted-living and nursing care are included.

YOUR ACTION PLANTo find out if your state has a LTC partnership, visit http://www.aalt-

ci.org/long-term-care-insurance/.

BLENDING HEALTH INSURANCE AND SAVINGSPaying for health insur-ance and saving are two of the biggest financial challenges families face.

If you purchase a high-deductible health insurance plan – either on your own or through your employer – you may qualify for a health savings account, paying less for premi-ums and building sav-ings.

Your employer’s benefit manager or a health insurance pro-vider can help with details, but briefly, because deductibles are high – for 2010 and 2011 it’s at least $2,400 for families – monthly premiums are lower. An employee can contrib-ute to a tax-advantaged savings account and tap it to pay the deduct-ible when needed, or keep on saving, per-haps for retirement health expenses, explains Roy Ramthun, a fellow at the Council for Affordable Health Insurance.

YOUR ACTION PLANReview your health insurance plan and/or speak with your employer’s benefits manager to see if health savings accounts are available as part of your plan.

© CTW Features

What a Widow Needs to Know The death of a husband launches many women into uncharted territory: financial planning

Although women generally outlive their spouses, it’s still common in this day and age for husbands to handle long-term financial planning with little or no involvement from their wives.

Some women cede control not only because they’re overwhelmed by the estate-settling and grieving processes but also because they doubt their abilities when it comes to “high finance,” says behavioral psychologist Matt Wallaert, the lead scientist at Thrive, financial management (JustThrive.com).

Women routinely handle day-to-day household finances such as paying bills and

managing bank accounts, Wallaert adds, but due to lack of exposure they tend to underestimate their investment-management capabilities. When put to the test, though, women usually know more about investing than they think they do.

The basics of financial planning can be learned. Meanwhile, newly widowed women should make it clear they intend to retain control over their investments, that they’ll make adjustments in their own time and that they won’t tolerate strong-arm tactics or dismissive treatment. However, Armstrong advises against making immediate changes. Unless an adviser’s dealings seem shady, in the beginning it’s easiest to work with that person because he or she is already familiar with the couple’s situation. This also applies to lawyers and accountants, Armstrong says. “In six months to a year, you can reassess these relationships,” she says. A widow’s first order of business when working with an adviser is calculating how much it will cost her to live. The adviser should provide her with a list of records she needs to assemble. She might want to take someone with her who’ll ask questions that don’t occur to her. Before inviting a family member, she should

consider whether that person’s interests might be self-serving. She should take notes and ask that any recommendations be put in writing. “It’s a difficult time. Things go in one ear and out the other,” Armstrong says. Initially, the goal is to make sure the widow has sufficient income to pay her current expenses. “Very rarely is there a situation where something immediate needs to be done with the investment portfolio,” Wallaert says. So if an adviser presses, a widow might want to hire a replacement once the estate is settled. Often, “adult children kind of swoop in and take over,” Armstrong says. “Don’t succumb to any undue pressure from anyone, including family.” If a widow ultimately decides to hire a new financial planner, she should ask other trusted advisers (accountant, lawyer, banker) for recommendations, as well as her widowed friends. An adviser should offer an initial consultation for free. Armstrong recommends asking whether the adviser belongs to an Estate Planning Council. Many competent advisers don’t, she says. But membership is a good indication the adviser is interested in working with widows.

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Checklist for New Widows & Widowers • Get multiple, certified copies of

the death certificate • Find the will and any trusts • Find any life insurance, including

company insurance, and put in a claim immediately

• Inventory the safety deposit box • If you’re covered under your

spouse’s company health insurance, find out immediately about keeping the policy

• Find the rest of the assets (including deeds, securities, bank accounts, retirement accounts, stock options) and liabilities (including mortgages and debts)

• Pay all bills on time if they relate to your personal life

• Claim any benefits you’re entitled to

• Call your spouse’s employer to see how much money is due, and follow up with a letter

Source: “Making the Most of Your Money” by Jane Bryant Quinn (Simon & Schuster, 2010)

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Retirement Living: Should We Stay or Should We Go? As they near retirement, it’s the question all boomers are asking

As more baby boomers reach their 60s and start to ponder retirement, many begin to debate where they should spend their golden years.

Highly educated and active, boomers aren’t following in the footsteps of their parents, many of whom migrated to warm- weather destinations. Stories of older relatives and friends who fell ill far away from loved ones or become lonely after the excitement of a new destination dimmed that dream of retirement. In addition, the boomer generation - those born between 1946 and 1964 - is highly diverse and no single

solution appeals to them all, says Carol Orsborn, author and co-founder of Fleishman-Hillard’s boomer-focused practice, FH Boom. The prime destinations seem to be communities close to home with residents who vary in age - where boomers can continue to feel young and maintain friendships - and downtown urban centers, where they can make do with less space and fewer cars, all while staying close to hospitals, a host of restaurants, shops and cultural events.

Ann Fry, a life coach and speaker who focuses on reinvention, is a prime example of this trend. When she hit 60, she relocated to New York from Austin,

Texas. Fry decided to rent initially, explaining “I love it, being able to call the super and say, ‘Fix this’.”

Boomers contemplating retirement choose one of two main paths: find a location close to home, or move to a new location that’s closer to family or that offers longed-for social, cultural or natural amenities.

STAY CLOSE TO HOME Because relationships are so important to this generation, many choose to stay within the same community, Orsborn says. In fact, most of those who move into Dublin, Ohio-based Epcon Communities’ various boomer-geared developments come from a 7-to-10-mile

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radius, says Nanette Overly, vice president of sales and marketing. But if they stay put in their own home, many opt to redecorate or remodel so it’s more convenient for their empty-nest years. Others downsize to a smaller home or condo to cut expenses and upkeep. And still others upgrade to have more room for kids and grandkids.

FIND A MORE APPEALING LOCALE All sorts of reasons spur boomers to move - from wanting to be closer to children, live in a different climate, find a state with lower costs of living and estate taxes, or to simply have a new adventure in a new community. They also look for a variety of housing stock, from single-family homes to condos and retirement

villages. With so many options, it’s not surprising that the easiest solution for many is to stay put. Nevertheless, the visibility and affluence of this generation has given rise to experts from different disciplines who have lots of advice to share on how boomers - and anyone debating what to do - can be better prepared. Here are nine questions experts suggest boomers ask themselves to make the smartest, happiest move:

1. WHAT ARE YOUR GOALS? Before you focus on the type of house you seek, think about your big- picture goal, whether it’s to be closer to your children and grandchildren or even farther away, says Marion Somers, the

nationally recognized geriatric care manager and author of “Elder Care Made Easier” (Addicus Books, 2006).

2. ARE YOU UP FOR THE UPHEAVAL? Redecorating, remodeling and moving all require time, money and patience, and typically add to stress levels. “Ask yourself whether you have the stomach to go through a remodeling or move,” suggests Laura Meyer, co-author of “Remodel This!” (Perigee, 2007). Some older homeowners tolerate stress better since they’re not dealing with young children.

3. ARE YOU READY TO CUT THE UMBILICAL CORD? People become attached to their homes, Meyer says. “Are you really ready to leave?” she

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10 Tips to Jump-Start Your Savings

START EARLY, SAVE MORE

The longer money is invested, the more time it has to grow, thanks to compound interest. See how a conservative four percent annual rate of return can make a small stash grow big over time: steps to fix any errors you may find.

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SAVED $2,000 PER YEAR AMOUNT INVESTED INTEREST EARNED FINAL TOTAL Kept money in account until age 65 $0 $20K $40K $60K $80K $100K $120K $140K $160K $180K $200K $220K $240K

$260K

From age 20 through age 30

From age 20 to age 65




$107,209

$251,578

$152,288

$41,015

$85,688Source: American Savings Education Council; Employee Benefit Research Institute

dreams, Somers says. They also need to be sure their setting offers the right amenities. For those not sure, Somers has them answer ques-tions, talk about possi-bilities, and put down responses on paper.

7. WHEN IS YOUR DECISION GOING TO BE MADE?Somers has clients determine a timetable rather than put it off indefinitely.

8. CAN YOU AFFORD YOUR DECISION?Too many boomers don’t know how much money they need to age, Fishman says. They need to take into account state and estate

taxes and the cost of daily living, including housing, health care and entertainment costs, she says. You also have to take into account any possible income changes.

9. HAVE YOU TRIED OUT YOUR DECISION?It’s hard to test-drive a decision without own-ing a home, but The North Carolina Center for Creative Retirement, part of the University of North Carolina at Asheville, offers semi-nars and a Creative Retirement Exploration Weekend program. Many communities may offer similar programs.

© CTW Features

RETIREMENT COMMUNITIES

Banish the phrase “old folks home” from your vocabu-lary. Retirement living options have never been more varied. Among them:

AGE-RESTRICTED COMMUNITIESGreat for people interested in living amongst their peers, these communities have a mix of housing types and fea-ture amenities like tennis courts and golf courses.

COLLEGE TOWN RETIREMENT COMMUNITIESIdeal for anyone seeking a more youthful environment, these communities include varying forms of indepen-dent off-campus housing while providing access to uni-versity facilities and programs

ASSISTED LIVINGThese residences provide apartment-style living and offer personal care and support services with basic daily activities ranging anywhere from bathing and dressing assistance to medication management. Communities also include meals, housekeeping, activities, transporta-tion and varying levels of security.

CO-HOUSINGIn co-housing communities, residents actively partici-pate in the design and operation of the neighborhood. Each home is privately owned and decisions are made cooperatively. Residents often share the cost of health aides or an on-site healthcare provider.

NATURALLY OCCURRING COMMUNITIESNORCs are a response to retirees who want to remain in their homes for as long as possible. Essential services are pooled so that maintenance, transportation, eldercare, shopping and other basics are readily available to the community’s seniors.

SUSTAINABLE COMMUNITIESFor seniors who want to live green into their old age, these communities promote conscious living practices in every aspect from the neighborhood building materi-als to waste disposal.

© CTW Features

—Danielle Cadet, CTW FeaturesSources: Co-Housing Association of the United States;

Campus Continuum; NORC; Ecovillage Network of the Americas

asks.

4. WILL YOU CONTINUE TO HAVE A GOOD SUPPORT SYSTEM WHERE YOU ARE OR WHERE YOU GO? It may be your children or a good network of friends, but you need to know that you have people you can rely on, says Ann A. Fishman, president of Generational-Targeted Marketing Corp., New York. Even if you move to be closer to children, realize they may not always stay there.

5. WILL YOU BE WITH LIKE-MINDED FOLKS? Boomers are social and like to be surrounded by people of varied ages, says Fishman. One solution for some boomers is to share a condo or house. Smart development companies are building communities targeted at homeowners with like- minded interests, Overly says.

6 . WHAT TYPE OF HOUSE AND COMMUNITY MAKES THE MOST SENSE? Boomers need to carefully weigh their housing choice and what level of services they want, based on realistic factors such as health and not just pipe dreams, Somers says. They also need to be sure their setting offers the right amenities. For

those not sure, Somers has them answer questions, talk about possibilities, and put down responses on paper.

7. WHEN IS YOUR DECISION GOING TO BE MADE? Somers has clients determine a timetable rather than put it off indefinitely.

8. CAN YOU AFFORD YOUR DECISION? Too many boomers don’t know how much money they need to age, Fishman says. They need to take into account state and estate taxes and the cost of daily living, including housing, health care and entertainment costs, she says. You also have to take into account any possible income changes.

9. HAVE YOU TRIED OUT YOUR DECISION? It’s hard to test-drive a decision without owning a home, but The North Carolina Center for Creative Retirement, part of the University of North Carolina at Asheville, offers seminars and a Creative Retirement Exploration Weekend program. Many communities may offer similar programs.

© CTW Features

Rule of thumb: Everyone should have six months’ worth of living expenses tucked away in savings. Rea lity: Few folks do, and the proverbial “rainy day” looms. Remedy: Start setting aside money today. Here are 10 ways to save before you get soaked. 1. Set a budget and stick to it. “Budgeting is the No. 1 surefire way to save money,” says Ethan Ewi ng, president of Bills.com, Set specific goals, such as lowering grocery bills, and budget accordingly. 2. Carry cash. People who count out bills instead of paying with debit or credit tend to spend less and make fewer unplanned purchases. 3. Optimize your cell phone plan. Billshrink.com, can help you find better credit cards and cell ph one plans to suit your individual needs. 4. Buy a la carte. This seems counterintuitive, but it may be cheaper to cancel subscriptions and me mberships and pay as you go instead. Likewise, downloading your favorite TV shows off the Internet for a per-episode fee might be cheaper than cabl e. 5. Redeem reward points. If your credit card offers them, check your statement to see how many you h ave and then go to the rewards website to find out if it’s possible to convert them into cash or gift cards. Some credit cards double the value of rewards at specific retailers, Ewing says. 6. Ferret out special offers. “Any time you make a purchase from a major retailer - a new computer, flowers, furniture - check out your credit card and car insurance websites for deals. 7. Negotiate car insurance. Once a year, compare different providers’ rates. Even if you stay with t he same company, you likely can save money by adjusting your deductible; unloading unnecessary services (such as roadside assistance if you’re an AAA member); or asking about repeat-customer, low-mileage and safe-occupation discounts. Use Sethi’s negotiating script:tinyurl.com/carinsurance1. 8. Sell stuff. Auction off unneeded items on eBay or hold a yard sale. 9. Sock away windfalls. When you receive extra cash - such as a tax return, bonus, birthday gift or proceeds from your yard sale - save it. 10.Eliminate temptation: unsubscribe. Many retailers send special offers via e-mail. © CTW Features

ONE OF THE toughest decisions many of us will face in our lifetimes is what to do when an aging par-ent can no longer live independently. Just ask Theresa Duff of Joliet, Ill. Her mother, Rita, already losing her eye-sight from macular degeneration, was fur-ther hobbled by a bro-ken shoulder and two shattered wrists due to a fall. “It was painful to see mom, who had raised a house full of kids, nursed her hus-band after his stroke and remained active into her 80s, suddenly become so frail,” Duff says.

As the population ages, the number of adults who need long-term care rises. About nine million senior citi-zens will need some form of long-term care this year, according to

the U.S. Department of Health and Human Ser-vices. While the depart-ment says family members and friends are the sole caregivers for 70 percent of the elderly, this may not always be possible or practical. “Mom wasn’t ready for a nursing home just yet, but none of the family members still living in the area had homes that could accommodate her limit-ed mobility,” Duff says. “We had to weigh our

choices carefully to address her needs, wishes and dignity.”

If a family member feels a parent who’s liv-ing on his or her own is on the decline and needs custodial assis-tance, he or she should consult with a medical professional. Either way it’s essential to determine what level of care is needed. This can run from simple help with housekeep-ing and shopping to more acute levels of care such as health monitoring and physi-cal, speech or occupa-tional therapy.

Ultimately, this becomes a decision based as much on a

TAKE CAREPeople age 60 and up are twice as l ikely to be the v ict ims of fraud and f inancia l scams. To register a te lephone number on the federal government’s nat ional Do Not Cal l Registry cal l (888) 382-1222 or go online at www.donotcall.gov.

When Home Alone Isn’t EnoughFamilies face difficult choices when one or both of their parents can no longer live on their own

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family’s financial resources as it is on an aging parent’s needs. That’s because neither Medicare nor most sup-plemental health insur-ance policies pay for long-term care costs.

For many, in-home health care can be a desirable and reason-ably affordable option. Those who require only modest assistance may have their needs served by a part-time caregiver. Those requiring addi-tional help may require 24-hour live-in assis-tance. Aside from the cost, family members have to consider the effort involved in hiring a caregiver and follow-ing up regularly to ensure that proper care is being given.

Another approach is to use the services of a licensed home health care agency, which is a necessity if an individu-al requires skilled nurs-ing care or physical therapy services. The National Association for Home Care & Hos-pice maintains a nation-al database of such agencies with tips on how to choose and deal with one on an ongoing basis at www.nahc.org.

If living at home proves to be particular-ly difficult because of stairs or other hazards, placing an elderly par-ent in an assisted living facility may be best. Res-idents often live in sepa-rate apartments, enjoy communal meals and participate in planned activities. Costs usually

depends on the size of the living area, services required and where the facility is located, add-ing up to several thou-sand dollars a month.

For those who require constant care, a nursing home may be the only option, albeit a costly one. Medicare pays for skilled nursing facility care for a limit-ed period following a hospital stay for reha-bilitative purposes, but not for ongoing care. State Medicaid pro-grams will generally pay for basic nursing home services, but only after an individual’s personal assets are exhausted and he or she has no other means to cover the cost.

All nursing homes that participate in Medi-care or Medicaid are subject to annual inspections. In addition to personal vetting of any facilities under con-sideration, it’s a good idea to compare these inspection records by consulting the “Nursing Home Compare” resource at www.medi-care.gov.

So how did the Duff family finally decide to care for their mom, Rita? “We wrestled with our options and though the family would have preferred that she live out her final years at home, we finally settled on moving her to an assisted living center,” Duff says. “We didn’t have to worry about caregivers not showing up or being inattentive to mom’s needs, and it

afforded her some independence and socialization without her having to be cooped up alone at home.”

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LONG-TERM CARE

RESOURCES

elder care services and facilities in the commu-nity, contact the state or city’s elder care agency. Find the contact infor-mation online at www.eldercare.gov or by calling (800) 677-1116.

health care agency at the National Association for Home Care’s web-site, www.nahc.org. Click on “Consumer Information.”

assisted living homes, consult the Assisted

America at www.alfa.org.

health-care agency and nursing home accredi-tation via the Joint Commission on the Accreditation of Healthcare Organizations at www.jointcommission.org.

records of nursing homes at www.medi-care.gov. Click on

© CTW Features

Credit Check For better or worse, there’s a number associated with your name. Make sure your credit score is all it can be

Now more than ever, it pays to have an excellent credit score. The best interest rates on auto loans go to folks with scores of 730 and above. And 60 percent of employers pull credit reports for some or all of their prospective hires, according to the survey by the Society of Human Resource Management. The rationale: people with a pattern of mismanaging their own finances exhibit poor judgment, an indication that they may lack the maturity and sense of responsibility it takes to be a trusted employee.

Don’t let a low number hold you back in life. It can take months or even years to boost a low score, but there are steps you can take to gain a few points and perhaps qualify for a lower interest rate.

Get your credit history for free from annualcreditreport .com

- the only authorized source for the free credit report that’s yours by law. The report does not include your credit score, which costs a few dollars to obtain. What you’re looking for is negative information that could be lowering your score. Correct any errors or inaccuracies, such as accounts that aren’t yours or old information that should no longer have any bearing on your score. Under the Fair Credit Reporting Act, credit bureaus must investigate any disputed items and remove them from your credit report if they cannot be verified. Though there is no quick fix for poor credit, paying down credit card balances can boost your score.

A history of late payments will hurt you, but you can start to mend your credit by paying every bill on time from now on. Treat your debt obligations responsibly and your score will start to reflect that.

The amount of your total debt relative to your total available credit has a significant impact on your score. Ten thousand dollars in credit card debt looks better if your line of credit is $100,000 vs. $15,000, she says, because you’re not as close to maxing out your accounts. The length of your credit history also affects your score, so don’t close your oldest accounts. Use those cards occasionally to keep the accounts active and avoid cancellation. Borrowers should pay off any overdue bills or old debts they forgot about, and pay down high credit card balances to improve their credit utilization ratio (how much of their available credit line they owe.) Credit card balances in excess of 50 percent of their limits will raise eyebrows, while 30 percent or lower is seen as responsible. Only time and discipline can mend a damaged credit record.

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