In retirement, you need a plan that will keep you healthy and happy for many years, but what happens when those years run out? Well, you need a plan for that too. Life insurance in retirement is one solution.

We all will end up in different financial places in retirement, and our cash flow and savings will dictate how our “final expenses” play out after we pass. Not everyone needs life insurance in retirement, but even if you don’t “need” it, you still may want it.

How Much Life Insurance Do I Need in Retirement? Plus, What Kind?

Let’s break down some of the reasons for having life insurance in retirement in both the need and want categories. Then, let’s look at the life insurance recommendations for each of these unique needs on what type of insurance fits best and how much life insurance you will need.

Reason One: No Savings

You may need life insurance if your saving plan didn’t quite pan out like you thought it would. According to a study done by Northwestern Mutual, 1 in 3 Americans have less than $5,000 saved for retirement. The average funeral costs between $7,000 and $9,000, and many people have large medical bills from their last days, so you can see how that math does not add up.

You might have Social Security coming in monthly or even a pension. However, you typically need that money for retirement living expenses. Unless you think you can save a little of that money each month in retirement, life insurance is a good idea. (Be honest with yourself. If you could not save it before retirement, you probably will not save it now.)

Life Insurance Recommendations for No Savings

Your options will depend on your cash flow situation.

• First, you need to decide how much insurance you need. Making sure you provide for at least end of life funeral costs.
• Second, you will need to see what you can afford to pay each a month in premium.

Final Expense

Term life and traditional whole life insurance is usually too expensive when you are older, and your social security death payment is only $255.

We recommend Final Expense Insurance. Also called, Funeral Insurance or Burial Insurance, Final Expense will give you a smaller face value ($10,000 to $20,000 is very common) but it is priced accordingly. This amount will help your loved ones cover your end of life costs.

If you are close to or already in your retirement years, I recommend getting this insurance sooner rather than later, as the premiums will go up every year you get older.

Life Insurance for your final expenses has a bonus when it comes to cash flow – it is paid to the beneficiary directly and is not subject to federal income tax which can save hundreds/thousands. Moreover, because it does not have to go through probate delays, your family gets the money faster.

Finally, here is one last benefit: You can assign funds from the life insurance to be paid directly to your funeral home. This little convenience can be a big deal to your loved ones.

Reason 2. Market Volatility Concerns

Another type of retiree may want life insurance because they are concerned about their savings being affected by market losses. Maybe you are like “most Americans” who have an average of $84,821 saved for retirement. However, $85k well below what experts consider enough for living expenses. Think of what one bad market year could do to your nest egg.

Even if you had a couple million in retirement, there are reasons for life insurance in relation to market losses. It just depends on how much you are intending to leave behind and for what reasons.

Example

For example, one spouse dies right after a large market crash (hopefully unrelated). The crash leaves the other spouse with half their portfolio assets and the same amount of living costs. The surviving spouse can use the life insurance money to fill in the holes from the lost income and catch up in the market.

You could use this money to pay off a mortgage. Similarly, you could use it to handle any issues with the estate. In addition, it is always good to know that your loved ones will have cash to bury you, no matter what the market conditions.

Life Insurance Recommendations

• IUL – For those that have cash to pay premiums and market assets to protect, I recommend you talk to a licensed agent about an IUL – Indexed Universal Life Insurance. These policies offer flexibility for your particular phase in life. However, they are complex, so please talk to a professional about your options.

• Final Expense – For those that are mostly concerned about final expense costs (i.e. funeral, medical bills, credit card/loan balances, etc.), a small final expense policy might be your best bet.

3. Long-Term Care Considerations

As an alternative to Long Term Care Insurance, some retirees consider Life Insurance Policies that have LTC riders or a Chronic Illness Rider. For example, an insurance carrier might offer a product (like an IUL policy) with an option to purchase up-front a rider that will cover long term care events. You can pay qualified long-term care expenses with the death benefit, naturally, before death. Then, when you pass, the insurance company pays what is left to your beneficiaries.

Can Life Insurance be Used for Retirement?

On the other hand, there is life insurance for retirement savings. This is a totally different ballgame than buying life insurance for death benefit needs. Many people will buy a whole life or traditional life insurance policy that has a cash value with the purpose of using this cash value as a source of income in retirement. Let’s look at how to do this.

How to Use Life Insurance for Retirement

To start, using life insurance retirement means planning ahead – usually before you retire. Whole life insurance policies, such as traditional and Indexed Universal Life policies have a cash value component built into them.

In addition, you can structure them to build more or extra cash in them by lowering their death benefit and contributing more premium. (There are rules to how to structure these policies to be tax preferred and legal, so working with an independent insurance agent or financial advisor is the best way to build a policy for you.)

The purpose of structuring a whole life policy in this way (with more cash value building up) is to be able to access this cash in retirement. Policy owners can take out “loans” against their policy’s cash to use for retirement funds.

Often times, this money is removed (all or partially) from the volatility of the stock market. As a result, this cash provides a “bucket” of money that could be accessed during down times in the market. Alternatively, you could use it for one time purchases in retirement, (for example: cars, vacations, down payments, etc.)

So, What’s the Best Insurance Policy for Retirement?

Of course, this answer depends on your personal needs and wants. However, I would recommend some form of life insurance to all retirees.

• If you can afford to be responsible for your funeral and burial expenses, do it. Your family will appreciate it.
• If you can afford to make sure your spouse can continue to enjoy retirement when you are gone, hop to it.
• If you are looking for an alternative to Long Term Care Insurance, call an agent and learn your options. Medical expenses are not getting cheaper. In addition, Medicare does not cover these.

My Personal Experience

I’ll leave you with my own family’s relevant story. Last year, when my father-in-law unexpectedly passed away, his Final Expense policy saved everyone time and from stress. This left my mother-in-law well taken care of financially, but a lot of her assets were not in cash at the moment.

It was a great relief for all of us not to have to jump through a bunch of hoops to get the bills all taken care of. The policy paid money directly to the funeral home and then sent my mother-in-law the rest in a check. All of that without a tax event. It made me grateful to have a family that planned for each other and made the last year a little less stressful for all.

The post Life Insurance in Retirement, Do You Really Need it? appeared first on Medicare Life Health.

Do you feel like it might be too late to start saving for retirement at 50 years old or older?

Debt expert Valentina Wilson is here to get you started with saving and investing, no matter what your age, situation or even your gender.

Calculate how much you need after retirement

The baby step to save and invest in your retirement is to find out how much you might need after retirement.

And therein lies the importance of the safe withdrawal rate! It implies the percentage of your accumulated wealth you can withdraw every year without running out of funds. Financial experts usually consider 4% as the safe withdrawal rate after retirement.

So, you can use a retirement calculator to get an idea about how much money you need after retirement!

Take Advantage of New Retirement Rules for Saving For Retirement At 50 +

Well, you might know that President Trump signed a new law on December 20, 2019. It’s known as SECURE (Setting Every Community Up for Retirement Enhancement) Act. There are a few changes with the retirement rules which can help you, like:

1. You can get an extra 1 ½ years to grow your money in a traditional IRA or 401k without being depleted by distributions and taxes. The Act pushes the age at which you need to take Required Minimum Distributions (RMD) from 70 ½ to 72.
   
2. Previously, contributions to a traditional IRA couldn’t be made after attaining the age of 70 ½. But now, you CAN contribute to your IRA even if you hit the age of 70 ½.
   

So, don’t wait, take advantage of more time you are getting to save for your golden years!

Make up your Time with the Help of Catch-up Contributions

Do you know about catch-up contributions?

Well, if you are 50 or above, you can make additional contributions to your 401k or IRA, known as catch-up contributions.

In 2020, you can contribute $19,500 ($500 more than the limit of 2019) to your 401k. And as you are 50 and above, you can stash $6,500 more as your catch-up contributions. So, in total, you can contribute $26,000 for your 401k.

In the case of an IRA, you can contribute a maximum amount of $6,000 in 2020. And for your catch-up contributions, you can contribute $1,000 more. That means you can contribute a maximum of $7,000 in total for the year 2020.

I would suggest you max up your contributions to your retirement account. This way, you can make up the time to some extent you have lost.

Get Rid of Debts Early

Do you have any outstanding debt?

If yes, then saving for retirement can be a distant dream for you!

Yes, you heard it right! Most likely, a substantial amount of your paycheck gets deducted to pay off your debts. As a result, you won’t be able to save that much for your retirement. So, find the best way to pay off your debts and live a debt-free life ahead! This way, you can live your life stress-free and save a substantial amount for your golden years!

Opt for a Health Savings Account (HSA)

Day by day, health care costs are rising in our country! A 2019 Fidelity report reveals that the average couple in our country will need almost $285,000 for health care costs!

To qualify for an HSA, you need to enroll in a high-deductible health insurance plan (HDHP). Every year, the IRS (Internal Revenue Service) reviews these plans and defines the minimum deductible and the maximum amount for your out-of-pocket expenses.

According to HealthCare.gov, in 2020, the IRS defines a high deductible which has:

• A deductible of at least $1,400 for an individual
  
• A deductible of a minimum of $2,800 for family
  
• Total annual out-of-pocket expenses of not more than $6,900 for an individual and $13,800 for a family.
  

How to use an HSA

So, once you are qualified for an HSA, find out how it works:

• Perhaps the best way to stash your money into your retirement account (other than 401k or IRA) and that’s too tax-free is by opting for an HSA!
  
  Use your money for qualified medical expenses so that you don’t need to pay any taxes. But always remember that once you turn 65, you can take out your money from HSA for any reason. But you will have to pay taxes on it.
  
  
• If your employer offers you an HSA, your contributions are deducted from your paycheck through a pretax payroll deduction. Otherwise, you can deposit into your HSA on your own. But you have to claim them as tax deductions while filing your income tax returns.
  
  
• Your health plan provider will give you a debit card or checks linked to your HSA account. So, you can use the balance for eligible medical expenses.
  
  
• Unused funds in your HSA roll over into next year. Your balance remains the same even if you retire or change your health plan provider.

Conclusions on How to Start Saving For Retirement At 50

The bottom line is, always remember that it’s always better late than never! So, don’t think that you can’t save for your retirement as you have already turned 50!

Follow the above tips to save and invest in your retirement at the earliest. And live happily during your golden years! Happy Women’s Day once again!

The post How To Start Saving For Retirement at 50 + appeared first on Medicare Life Health.

Reverse mortgages can be very intriguing to those that are reaching retirement age. Additionally, they can be intriguing to those that are in retirement and concerned about cash flow.

So, just what is a reverse mortgage?

Why do people take them out?

And, are they good or bad?

Reverse Mortgage Defined

A reverse mortgage is a loan you can take out against the equity on your home to provide you a cash flow, often in retirement.

Contrary to a regular mortgage, the bank will pay you an agreed on sum of money each month, instead of you paying them. Consequently, that is why it is called a reverse mortgage.

Home Equity Conversion Mortgages (HECM) is the technical name for a reverse mortgage. The FHA insures them. Moreover, they are “non-recourse” loans. This means that even though there might be interest applied, the repayment of the loan will never be more than the actual value of the house when it is sold.

Does My House Qualify for a Reverse Mortgage?

To be able to do a reverse mortgage, you must have equity in your house. This means you have to owe less on your house than it is worth and then have value on it beyond that to draw cash from.

Moreover, the government states you must only have a “small balance” left on your current mortgage, or you must own the home outright. Which makes sense if you want to borrow against it.

Why Do People Take out Reverse Mortgages?

As pensions become less common and 401k’s end-up smaller than one hoped, seniors need to get creative. A home is often times one of the biggest assets retirees hold when they stop working.

Consequently, when other assets are not as robust as they need to be to provide for living expenses, seniors turn to their home for cash.

Are Reverse Mortgages Good or Bad?

As a tool to provide cash flow in retirement – reverse mortgages are neither good nor bad – they are neutral. They are good for providing cash flow in retirement, if your house is one of the ONLY places you have access to cash. However, they can be bad if you take one out incorrectly or without carefully considering how to use one responsibly.

What to Consider Before Taking out a Reverse Mortgage

Reverse mortgages can be useful, but there are things to consider carefully before taking one out.

• First, you must be very careful who you work with when you take out a reverse mortgage. There are mortgage scams and frauds out there.
  
• Second, you must still pay your property taxes and homeowners insurance each year or your house could end up in foreclosure. According to the US Government Accountability Office, defaults increased 2% from 2014 to 18%. These defaults were mostly due to borrowers not paying taxes/insurance or failing to meet the occupancy requirements. Which brings us to the next point.
  
• Third, the house you reverse mortgage must be your primary residence.
  
• Fourth, you must be at least 62 years old to take out this kind of mortgage.
  
• Finally, in addition to owning your home or only having a small balance left on it, you must also not have any outstanding debts to the Federal government. (For example, back-taxes.)

How Do I Start the Process?

First, if you are considering a Reverse Mortgage, the first step is a required consultation by an approved HECM counselor. You can find a counselor on this government search page.

Then, to find a HUD (U.S. Department of Housing and Urban Development) certified lender, you will also need to visit this government web-page.

For more information, and to get your specific questions answered, please visit the FHA Resource Center.

Further Retirement Reading

If you are looking for other ways to generate cash flow in retirement, that do not involve mortgaging your house, please start with our very popular article series – The New Rules of Retirement.

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This article, “Jobs for Retired People” is the second article in our New Series: The New Rules of Retirement.

Jobs for Retired People? Doesn’t retired mean “NOT WORKING?” Maybe, but maybe not! In our Series – The New Rules of Retirement, we are exploring what it means to re-define retirement to fit your needs and lifestyle.

In our last article, we discussed how the “Average American” close to retirement age these days might not have as much saved as they would like. We also did some math to discover what amount of side income might be needed for the majority of Americans to still “retire” when they wanted to.

In our case study, the “Average American” with the most average of savings might need an extra $1,295 a month to live the lifestyle they envisioned in retirement.

Retire Early???

Some of these side gigs might even allow you to quit your job earlier than you thought possible. We have heard stories of people LOVING their side job so much, and actually making good money from it, that they were able to retire from their full-time job early.

Side or Part-Time Jobs for Retired People

The Best Side Jobs for Retired People & People Saving Extra For Retirement

This article will help you to find a fun or creative “Side Job” / “Side Hustle” / “Part-Time Work” or another source of passive income to help you retire or save more for retirement.

A few things to keep in mind:

• First, these are jobs to supplement your retirement savings. They may or may not be HUGE money makers – often they are just a way to make some extra income.
• Second, they are meant to also be enjoyable and creative! Yes, they are still work, but with a retirement flavor and happy attitude. Some keep you active or challenge you mentally. Others are creative, and some even keep you social!
• Finally, you can start these jobs before you retire. Use them as a second job to give your retirement savings an extra boost. In addition, many of the passive income generating jobs take some time to develop. That means the earlier you begin them, the more you can sit back and just maintain them later.

Side Job Category One: Jobs that Keep You Active

Pet Sitter / Dog Walker

Listen, retirement is not getting any cheaper or any easier. Everyone thinks they have enough saved for retirement as they near their golden years, however, the truth of the matter is that majority of people have nowhere near enough money saved. This is likely why you’re looking for a side job in retirement. Either that, or you’re just plain bored.

Either way, becoming a pet sitter or dog walker is a great opportunity to make a little extra money. 

Sites such as Wag! or Rover make it easy to do this. You’re probably already going to a morning walk anyway, so why not bring a furry friend with you and get paid to do it. If you’re really feeling adventurous, you could let the furry friend sleep over and get paid even more.

You could earn several hundred dollars a week all by just living as you normally would, but having an awesome four-legged companion with you. (From Austin with TheLogicofMoney.com)

Handy-Person

If you are good at fixing things, there are a lot of people that are not, and they need your help. People all over need help with small house projects and light outdoor work.

Becoming a “handyman” or “handywoman” might be as simple as making some quick business cards and passing them out to everyone you know. It is a great word-of-mouth, referral business, for those with a solid network of friends, family and co-workers. If you need help finding people to help-out and are comfortable online, services like TaskRabbit, can point you towards people looking for help.

Category Two: Jobs that Keep You Social

Vacation House/Room Renter

Tom Blake, from ThisOnlineWorld, suggests Airbnb as a way to stay both active and social in retirement while making extra money. He includes this in his list of “The Best Gig Economy Jobs – Make Extra Money On The Side.”

Airbnb allows you to make your house, or a room in your house available for rent to travelers. You can make decent side-income renting your home if you live in a well traveled area.

Tom mentions Airbnb is a great way “to make use of any extra space you might have in your home (in case you haven’t downsized) as well as meet new people!” Many of our friends have great Airbnb stories from both sides of the service. It’s a unique travel culture that can provide exciting experiences to an otherwise quiet retirement.

Drive for Uber or Lyft

Uber and Lyft are good ways to make a little extra money while interacting with new people. If you are in a touristy town and like to talk up your local hot spots and events, then you will find your happiness with a driving service.

On the other hand, driving services can also work out for people that don’t like to constantly chat (or drive around tipsy people late at night). Everyone needs trips to the airport, especially in the quite early mornings. Moreover, if you really aren’t feeling social, Uber Eats allows you to drive around food instead of people.

Category Three: Jobs that Keep You Creative

Selling Crafts – Online or In-Person

Craft Fairs are still hot! If you like to craft, you can tour your state (and beyond…) selling your creations. Makers Markets, Junk Stocks, Fundraising Craft Fairs, State Fairs and Flea Markets abound and are fun for all involved.

For those of you like enjoy selling online, the popular markets include Etsy, Artfire and Bonanza. To learn more about how to sell on Etsy and everything it entails, I recommend this article on Successfully Simple Sisters.

If you need help with setting up an online shop, hop onto a site like Fiverr and search for “help with etsy shop” or something similar. You will find freelancers that will help you get started!

Freelance Writer

For those of you that like to write, look into becoming a freelance writer. Online publications (and some local in print ones) are always looking for people to add valuable content to their sites for their readers. We suggest reaching out to the smaller ones you might already read first.

In addition, you can find places to write for by searching for “best sites for freelance writing” or something similar. Here is one article we found to start you off. Insert your specific area of interest to make it more relevant. For example, “best sites for music freelance writing.”

Category Four: Jobs for Retired People that Keep You Busy

Taking Surveys

If you are looking for a way to make money on the side that doesn’t take a whole lot of effort, then taking surveys is a fun way to pass your time. You can sit on the couch, listen to music or the TV, and provide your opinions to people who want them.

Popular online survey sites include Pinecone Research (which I did for a couple years and loved!), Opinion Outpost, Inbox Dollars, and the National Consumer Panel.

If you want to take this one into the “real world,” then look for paid opportunities for participating in Focus Groups and Health Studies.

Category Five: Jobs for Retired People that Keep You Challenged

Start a Blog

Oh boy, if you are up for the challenge, then try starting a blog! People actually do make money from their blogs these days – especially niche blogs. However, there is a steep technology learning curve, if you are not already very comfortable creating online.

Blogging can be a great way to generate passive income. Typically, you can make good money after years of effort, lots and lots of writing, and much search engine optimizing. If you enjoy learning and writing more about a subject you are already passionate about, then you will love blogging. On the other hand, you will also have to find learning about blogging interesting, because half of your time will be devoted to that.

Tutor or Teach

Both in person and online, tutors and teachers are in demand. If you have a field of expertise or passion for helping a certain age, then start there. This is a great business to grow by word-of-mouth if you have a decent network of friends and family to reach out to, but there are also businesses that can bring you students. Tutoring centers exist both online and in physical locations and are always looking for qualified help.

If you have graduate degrees in certain areas, you can look into teaching at your local universities and community colleges as an adjunct professor. Certain fields are always looking for people with Master’s degrees and beyond to teach both online and in person classes.

Jobs for Retired People Conclusions

There are so many opportunities to create the kind of retirement and work-life you want in our new economy. The New Rules of Retirement say you have the creative power to shape your life.

You can work and play at the same time with these part-time jobs.

We will be continually adding to this list. We would also love to hear your suggestions and what has worked well for you. Please email us or comment below.

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Minimalist Living, Minimalism, Conscious Consumerism, Simple Living, The Joy of Less, Decluttering, Downsizing… Perhaps you have encountered these words recently and realized this is a movement spreading across America. Minimalist living is nothing new, but weary Americans coming off the consumerism roller-coaster, are discovering it again.

Minimalism Across Generations

Millennial Minimalism

Minimalism is appealing across generations, but it seems to be most appealing to the Millennial Generation. The Millennial generation (born 1981-1996) grew up with the high spending of the 1990’s and the bubble bursts of the 2000’s. Exiting school with a poor job market and lots of debt shaped the way Millennials see the world. Moreover, the highlighted effects of climate change from global consumerism are concerning to this generation which will most likely live to see the effects of our changing weather.

According to Forbes, 78% of Millenials would rather spend money of experiences than on stuff. (59% of Baby boomers say the same thing.) Millennials are opting for smaller house, smaller carbon footprints, and sharing cars/tools/etc. They are decluttering and donating the remnants of their early spending, and the mainstream is taking notice.

Baby Boomer Minimalism

The Baby Boomers are noticing too. As we mentioned, over half of the Boomers said they would rather spend money on experiences than things. However, this number is far below the Millennial count, and Boomers have a much more complicated relationship with things.

The Baby Boomers (born 1946-1964) grew up with rapid U.S. economy growth, the rise of the suburbs, and the marketing of the “American Dream.” As a result, Boomers were the generation of accumulation. Generation X (born 1965-1981) was not far behind in picking up where the boomers left off in consumption of stuff.

Now, the Baby Boomers are entering retirement in droves (10,000 Boomers each day reach retirement age) and sometime after this (hopefully a long time after this) they will pass. What happens to all their stuff?

Unloading Your Stuff for Minimalist Living

Here is the new reality: the generations after you do not want your “stuff.” Heirlooms to one generation are now the junk of the next generation. This is not to say that nothing is precious. You might have a few very special objects that can be confidently passed down. However all the china, crystal and large pieces of furniture that were once considered essential and now considered (heavy) burdens.

Step number one will always be – STOP buying more stuff! Once you have accepted this concept as more than theory, it is easier to move on to step two – minimizing your stuff.

Traditional Downsizing and the Rise of Sweedish Death Cleaning

Let’s say you are a Baby Boomer (as an example, this applies to all ages), with a average to above average living space and perhaps even a storage unit. You have accumulated many things in a large amount of categories including clothes, shoes, accessories, kitchen wares, furniture, decor, outdoor tools, camping gear, exercise equipment, beauty supplies, cars, holiday decorations, etc.

How does the responsibility of this amount of stuff make you feel? Moreover, who will inherit this responsibility when you are gone?

There are several ways to look at this situation that fall along the spectrum of minimalist living:

• Organizing
• Decluttering
• Downsizing
• Minimalist Living

Let’s look at each step on the journey:

Organizing

Organizing is not minimizing. It is taking what you have, sorting it out and putting into a manageable system so you can use it and enjoy it effectively. It can be helpful to you, and those that have to sort through your stuff later, but it does not take away any of the burden of material things.

Organizing will always have a place in the process of minimizing. You will need to organize what you have at every step in the minimalist journey. In addition, organizing will get easier as you let go of more and purchase less.

Decluttering

Decluttering is the first step in embracing minimalist living. It involves not only a physical shift of letting go, but also a mental shift into what it means to live more with less.

Marie Kondo’s book, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, brought decluttering into the spotlight in 2014. (As did her Netflix special a few years later.) It is still a great book to start you on your journey of letting go and learning to find the joy of living with less. Are you unfamiliar with this book? The premise is to only allow things to exist in you life that “spark joy.”

For example if a pair of shoes does not bring you joy – get rid of them. If you have 10 shirts in your closet, but only 2 shirts make you feel good and look good (i.e. bring you joy) then you have 8 shirts too many. Kondo also has a very effective system of gathering, sorting and deciding what stuff stays and what goes.

Downsizing

Downsizing goes beyond decluttering and challenges us to face our mark on this world and what we might leave behind. In this way, we consider how our current living situation is affecting our own happiness and the happiness of those around us.

For example, consider the size of your living space. How much space you live in affects your comfort level, but it also dictates the amount of responsibility (or burden) you have. Your space size decides how much time you spend cleaning and maintaining and how much money you spend doing these activities. It also affects those around you by the amount of energy you use (your carbon footprint) and the amount of resources you use to maintain your home.

When you pass, your responsibility (burden) for all of your things becomes someone else’s responsibility (burden). The Gentle Art of Swedish Death Cleaning is a very recent book on an old subject. It is dedicated to helping people unload their stuff now, so their loved ones will not have to when they pass.

When done in the Swedish fashion, downsizing and decluttering becomes an act of love. Moreover, it becomes a journey that allows you to share experiences and meanings behind objects and heirlooms, before you part with them.

Minimalist Living

Finally, after you have organized, decluttered, and downsized, you may just be ready to embrace a minimalist life. Minimalism asks you to let go of anything that does not serve you or bring you happiness. It favors quality over quantity, and conservation over consumerism.

More than any of the other step, minimalism is a lifestyle. You get to define what simple living means to you. Maybe it means only owning 30 items of clothing or letting go of a large house or an extra car. Minimalism can free up your cash now that you have stepped off the consumer wheel. Maybe that means you can retire early – or even retire at all!

Above all, minimalism can give you freedom. It is amazing how much stress and pressure comes from our accumulation and maintenance of our stuff. If you are looking for a guide to start you on your path to minimalist living, then I have a few recommendations:

• The More of Less: Finding the Life You Want Under Everything You Own. This book by Joshua Becker is an excellent starting point for any curious reader. It was one of the first minimalist books I read, and it reached me right where I was at – in my suburban home with a crowded garage.
• Project 333. For those of you that want to create a minimalist life, but would like to start smaller, Project 333 will help you minimize your wardrobe. This is a website/blog that will challenge you to evaluate what you really need in regards to clothes, shoes and accessories.
• The Minimalists. This website will lead you to articles, podcasts, movies and other resources that will help you discover more about minimalism and the people that practice it.

Going Forward with Minimalist Living

Whatever stage of life you are in, it is good to know that it is not to late to minimize! It is just going to be a lot harder for some. Starting small with one specific area or project will help. As will understanding that letting go of stuff is a journey. We are never really done, and choosing a minimal lifestyle is an everyday process. However, it is worth is when you consider all the benefits: time freed up, money saved, resources conserved, and stress relieved.

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Retirement is changing, whether you like it or not… whether you are prepared for it or not. Let’s lay down the new rules of retirement and how to follow them, bend them and break them for your needs.

This is the introduction article to our New Series: The New Rules of Retirement. The Next Article in the Series is Jobs For Retired People.

Rethinking Retirement

You have the freedom to define the word “retirement” to best suit you and your needs. Retirement might have been cut and dry for the previous generations, but it is all over the board for those pondering it now.

We all know the old playbook – put in your time at a company – retire after 40 years – receive your pension and social security. This playbook was scrapped for many in the baby boomer generation on. Events beyond our control may have set us back or have caught us off guard.

Depending on if this happens to you later in life or earlier in life, there are still ways to enjoy a “retirement.” Moreover, some might find the new ways of providing for retirement even more fulfilling than the old ways.

A Case Study in The New Rules of Retirement: The “Average American”

Let’s say that you are the “Average American” who is of retirement age. (We are talking – the most average of average.) You decide to retire at 66, the current full age of retirement. Right now, the average Social Security check for the Average American is $1,461 a month.

In addition to Social Security, the “Average American” will have about $172,000 in retirement savings at age 66. This is based on a (median estimate instead of average).

Then, let’s assume you made about $60,000 a year in your last years, and you are about to retire today. You estimate that you will need about 70% of that amount to live in retirement. So, you need $42,000 a year, or $3,500 a month to fund your modest American retirement. (This is all in current dollars, not future money for this example.)

To be reasonably safe, we will assume you will live to about 90 years old and your savings will stay in the stock market with a 5% rate of return in conservative investments.

Just How Screwed/Set are You – The “Average American”?

If you live to 90, for this case study, the math says you will need about $470,000 in savings to compliment your social security (in today’s dollars). However, you only have $172,000. In this scenario (living off of $42,000 a year) you are short $298,000.

You will have $2,205 a month to spend instead of $3,500
= a deficit of $1,295 a month.

This adds up to living off of $26,460 (including social security) instead of $42,000.

Plus… TAXES!

On top of this, we have not even taken into account taxes! Depending on how much you withdraw each year, and where you have your money stashed (401k? Roth?), you may need to pay taxes on your retirement income. Austin, at The Logic of Money, does a good job on quickly breaking down retirement taxes in this article here.

So, What Do You Do?

Many Americans will accept their fate and live on their fixed income, or they may decide to stay in their full-time job longer. However, that does not need to be you! Being retired does not need to be a do nothing sentence.

In Comes the New Rules of Retirement

The New Rules say you can make up the difference by making passive income and participating in side jobs. (This is what the kids call side hustling!) Moreover, you can still maintain your retired status find ways to do things you love (or hopefully come to love).

With your side job, you can showcase your skills/expertise or learn a new skill. You only need to make about $1,300 a month, so there the pressure is revealed to find something that just “pays the bills.” Retirement is a time to spend time doing things you enjoy with people you enjoy. You can tailor your experience to meet your needs with a little bit of planning and initiation.

The new rules of retirement say you have the freedom to define the word “retirement.” You can still be retired and bring in extra income in our new economy.

Passive Income and Side Jobs for Retirement

Our next articles in our New Rules of Retirement series will help you explore all the avenues of making extra money. We will explore traditional jobs as well as new jobs available to retirees who need a little extra income.

READ IT HERE: Jobs for Retired People

You can also get a jump start by reading about our favorite retirement money books here.

The post New Rules of Retirement appeared first on Medicare Life Health.

What are health hacks? They are tricks or lifestyle changes that can save you money on your health care costs.

You may recall from our last health care costs post: a study done by Fidelity finds that American couples will need about $285,000 saved to cover health care costs in retirement.  Moreover, that is an estimate in today’s dollars, and it doesn’t include long-term care costs.

So, if there are health hacks or lifestyle changes that would save you thousands of dollars in the future, would you do them?

I hope so. Let’s start with the Number One Money Saving Health Hack:

#1 Health Hack: Cut out sugar from your diet

This isn’t a joke, and it is not something to take lightly. Cutting out or significantly reducing sugar from your diet will save you thousands of dollars, and there are studies to prove it.

How Much Sugar are You Eating? You may be surprised.

Maybe you think you do not eat that much sugar, but I want you to take a closer look here. Sugar hides in our modern foods all the time. If you eat out a lot or eat a lot of processed foods (including breads and snacks), then you are probably eating more sugar than you think.

The majority of Americans are eating too much sugar. Our sugar-laden Standard American Diet (SAD) is the number one reason why our health care costs are rising so rapidly.

In addition, it is the number one reason that you might have to take a lot of drugs in retirement.

Don’t believe me? Read on.

Here are a few sugar science facts from UCSF that should scare the pants off of you:

•  Added sugar is in 74% of our packaged foods.
•  Scientific evidence shows too much added sugar, over time, is linked to type 2 diabetes, heart disease, non alcoholic fatty liver disease, lipid problems, and hypertension; all of which are part of what is called Metabolic Syndrome.
• Evidence is also mounting that high levels of sugar consumption can fuel some cancers and is linked to inflammation, dementia or Alzheimer’s and more rapid aging.
• 31% of American adults and 13% of kids suffer from non-alcoholic fatty liver disease (NAFLD).
• 75% of health care costs are from metabolic syndrome diseases. – This is not just about overweight people. 20% of obese people have a healthy metabolism, and 40% of skinny people actually have the metabolic diseases caused by sugar consumption. That means 60% of the entire US population is suffering from metabolic diseases.
  source: sugarscience.ucsf.edu

This is your health hacks wake-up call.

If you eat a “normal” American diet, even if you are skinny, sugar is secretly creating havoc in your brain and body.

Harvard Medical School will tell you, sugar is linked to cardiovascular disease. Read that linked article!

Dr Jason Fung, in his book the Obesity Code will also tell you, sugar leads to diabetes, which leads to kidney failure.

Yes, Dr. Fung will also tell you, even more good can be done when you stop eating processed foods (especially refined carbs) all together and eat as many vegetables and whole foods as you can.

However, eliminating sugar from your diet is the first step.

How this Health Hack Saves You Money

According to The Diabetes Journal:

• “Abdominal obesity, low HDL cholesterol, and hypertension… are important predictors of long-term costs in the Medicare population.”
• These researchers found a +20% difference in Medicare costs in people with the disease factors named above.
• Drug costs for chronic illnesses quickly add up for metabolic diseases, and retirees pay a lot of out of pocket costs each year with their Part D coverage.

Doctors have been known to help their patients with eating changes that eventually change their drug regimens meaningfully. Inflammation can reduce quickly, and weight loss is often a happy benefit.

Health Hacks Action Steps

Let’s do something about this today. Cutting out or significantly reducing sugar is the #1 lifestyle change to save money on health care in retirement. Here is where to start today:

• First, if you are inspired by books, start with this reading list to get you motivated and develop a plan.
• Second, decide to do a Sugar Detox. We have a free 10 day detox plan you can follow.

Check back as we add more health hacks to our list in 2020!

The post Health Hacks – How to Save Money on Health Care Costs appeared first on Medicare Life Health.

Once you have started working on your Financial Plan and Health Insurance Plan, it’s time to focus on your “Preventive Savings Plan” to save money on health care costs in retirement.

Health care is often the #1 cost for retirees. According to a study done by Fidelity, not including Long Term Care, American couples will need about $285,000 saved (in today’s dollars) to cover health care costs in retirement. That is a lot of money!

What can we do about this? One proactive approach to saving money is to stay as healthy as possible. We call this “Preventive Savings,” and it can really add up!

What is Preventive Savings? It is a mindset, and a plan, to live in such a way to prevent, as best as you can, negative events (such as medical events, chronic illnesses, or out of hand expenditures) that will hit your wallet hard.

I am not referring to preventive care medical appointments (although, those are important too). Rather, I am referring to what you can do individually to save the most money on your medical costs and lifestyle costs in retirement.

These are things you can do both while preparing for retirement and while in retirement. It’s never too late or too early to start.

The Key Elements to Help You Save Money on Health Care Costs

Medical Costs and Preventive Savings

Now, there are many small ways to keep yourself healthy day-to-day. However, we are concerned with the biggest medical problem created by our lifestyles. This is the problem we must address to save thousands of dollars down the road:

The #1 Problem: Metabolic Diseases and Chronic Illnesses

You can stuff as much money as possible into your pockets now, but it will fall right back out with the huge hole chronic diseases create. Some people think there is nothing they can do about, but YOU ARE NOT HELPLESS IN REGARDS TO ILLNESS. 

This is your wake up call! If you are planning on living a while, it’s time to assess your lifestyle and what you are putting into your body.

If you are ready to learn the Number One Change to make to protect yourself and your money from this hole, start here.

Lifestyle Costs and Preventive Savings

In addition to medical costs, there are lifestyle pitfalls that can put a damper on your happy retirement and drain your bank account. Some of these are better to plan for before retirement, but most of these problems can be solved anytime.

• Spending too much on your big expenditures.
• Having too few sources of income in retirement.
• Not having a purpose / happiness plan in retirement.
• Missing a strong social network.

Simple Life, Simple Savings

“The Good Life” is often “The Simple Life,” full of friends, family and connection. Getting back to the basics of what makes us healthy and happy is not just good for our souls, but good for our savings.

Start with your health and then move on to your lifestyle. I promise this integral part of your path will create just as much wealth for you as your financial/insurance plan.

Action Steps to Save Money on Health Care Costs

• Click here to learn the #1 thing you need to do right now to save the most money on your health care costs.

The post Save Money on Health Care in Retirement appeared first on Medicare Life Health.

I am a firm believer that there is a good Medicare health plan out there for everyone. Moreover, there might even be more than one good choice out there for your situation. If there is more than one good choice available to you, you might be weighing your options right now – Medicare Advantage vs Medicare Supplement.

First, Let’s review your Medicare options:

Original Medicare (no supplement)

Certainly, stand-alone Medicare coverage is an option. You would still want to get Part D Prescription coverage. (There are penalties down the road if you do not get Part D or have credible coverage already and then want to get it later.) However, you would then be left paying your deductibles and 20% coinsurance out-of-pocket.

For example, with ONLY Original Medicare and NO supplement or MA plan, if you ended up having a major health event like a surgery, the 20% left that medicare doesn’t pay could still be thousands of dollars.

You would also have to go through medical underwriting with a private insurance carrier if you later want a supplement and you have missed your Guaranteed Issue time frame. You can always join a MA plan later, but only during a special enrollment period or during the Annual Enrollment Period (Oct. 15 – Dec. 7).

Original Medicare with a Supplement

With this option, you keep Original Medicare and add on a Supplement (Medigap) Policy with a private insurance company to help you in paying the pieces that Medicare does not. These costs can become large if you have a big medical event or a chronic illness. In this instance, a Supplement would protect you from “losing the shirt off your back”! You would also have a stand-alone Part D Prescription Drug Plan (or a plan that is considered “credible coverage”).

Medicare Advantage (MA/MAPD)

Finally, with a MA/MAPD plan you would replace Original Medicare with a bundled plan offered by a private insurance company. These often include a Prescription Drug Plan. (These are called MAPD plans, which are most the common plans). You still “have Medicare” with these plans. However, they are run by private companies who put together networks of providers and health facilities. (For example, HMO, PPO and PFFS networks.)

One question we hear a lot is, “can I have both Medicare Advantage and a Medicare Supplement?” No, you have one or the other. Not both, they do not work together and it is illegal for anyone to sell you both.

What are the Differences Between having a Supplement (Medigap) and having Medicare Advantage (MA/MAPD)?

Now, let’s do a breakdown of Medicare Advantage vs. Medicare Supplements. First, let’s look at the difference in care and the differences in cost. We are assuming you either have Medicare Advantage or Original Medicare with a Supplement (aka Medigap Plans).

Making Your Choice between Medicare Advantage vs Medicare Supplement

Now that you understand the basics of Medicare Advantage Plans and Original Medicare plus a Medigap (Supplement) Plan and know the significant differences between the two, it’s decision time.

First, I always recommend speaking with a licensed, independent agent that can help you in assessing all the various plan types available in your area. Every county has different options for MA/MAPD plans, and insurance carriers have different prices on the supplement plans you may be considering.

Second, it’s good to have an idea of what is important to you. You should be thinking specifically in regards to money and lifestyle when choosing a path.

Consider these questions when choosing between Medigap and MA Plans:

Do you plan on living in another place for a significant period of time during the year?

If you are a “snowbird” or are planning a longer vacation where a routine doctor visit may be necessary when away from your primary residence, then a supplement may be your best choice. Remember though, emergency / urgent care visits are covered with both types of plans.

However, if your travel happens to be international, Both Original Medicare and MA plans do not cover foreign travel, but some supplement plans (plans C, D, F, G, M & N) have 80% foreign travel exchange limits that will help off-set some costs.

What is (or will be) your cash flow situation in retirement?

Some retirees have pensions, social security and other payments (like annuities) that come to them automatically each month. Other retirees have less of these automatic infusions or smaller required distributions and prefer to leave as much of their cash in investments as possible. Finally, some retirees are on a smaller, fixed income. This might require them to consider cash flow very carefully.

In each situation, you will need to review how you are paying for your health services, as each plan offers different payment options.

Cash Flow with a Supplement:

With a supplement, you will have a set amount of money (that could be a larger sum than an MA plan) come out of your bank (and/or S.S./R.R. check) each month. This can add up when you consider it includes Part B premiums, Part D Prescription premiums, and your supplement premiums. However, if you chose a plan that covers everything Original Medicare leaves out, then you would not pay any other out-of-pocket fees for Medicare covered services.

Cash Flow with a MA/MAPD Plan:

With a Medicare Advantage plan, you will most likely have a smaller amount of money coming out of your wallet each month. You will most likely have an MAPD plan that includes your drug plan, as stand alone MA plans are becoming much more rare, and some plans even include Part B premiums. So, with a MAPD plan, you would be paying a MA premium and maybe your Part B premium each month. Moreover, there are sometimes zero dollar per month ($0/month) premium MA plans available. The costs then to consider and maybe budget for with MA plans is if there are any co-pays, co-insurances and deductibles with the plans. Each plan will be set-up differently, and each plan will also have a max yearly out-of-pocket limit.

Just like in any kind of insurance, Medicare plans are set-up to allow you to choose how much out-of-pocket expenses you incur versus monthly premiums you pay.

Looking at your budget and then talking through your options with a licensed agent will allow you to make the best choice for your situation.

How interested are you in extra benefits being included?

Finally, one more consideration is the other elements that round out your health insurance plan, such as dental, vision, hearing, etc. If you have a supplement plan, you will need to decide if you need these services, and if you do, are you wanting to take on insurance plans for them. You might decide to add on a stand-alone, or a plan that includes any or all of these common services (dental, vision, hearing).

Often times, Medicare Advantage plans will include these services as a part of their plan as an additional benefit which might save you money if you were planning on getting a stand alone plan or paying cash for these services.

Moreover, many MA plans will offer fitness or wellness services that are included at no additional cost. Sometimes this means you will not have to pay for a separate gym membership. Silver Sneakers is one example of a national program that is used by many MA plans to provide fitness and wellness services.

The Next Steps for Choosing Your Medicare Plan

As you can see, developing your Medicare Health Insurance Plan can be very involved, but I am confident you can do it! Having a professional to help you through the process is important. Please reach out to an independent insurance agent to review what is available in your area. They will be able to explain plans in specifics and answer your questions about Medicare Advantage vs Medicare Supplement.

Finally, Medicare.gov is also a good tool for answering your broader questions, and we also encourage you to comment on this page or contact us directly with any questions. Thanks!

Other Topics Related to Medicare Choices:

• Medicare Supplement Basics
• Medicare Advantage Basics
• Prescription Drug Plan Basics

The post Medicare Advantage vs Medicare Supplement appeared first on Medicare Life Health.

In this article, we look at what is Medicare Advantage (aka Medicare Part C). As we discussed in our Medicare 101 Post, there are two different Medicare paths. You will choose one when you are setting up your health care in retirement.

• Path One = Original Medicare, Part A and Part B, with a stand alone Prescription Drug Plan (Part D) and an optional Medigap (Medicare Supplement) Plan.

• Path Two = Medicare Advantage (Part C) that replaces Medicare Part A and Part B and typcially includes a Part D Drug Plan. These plans are offered by private insurance companies that you work with directly.

The Basics of Medicare Advantage

Medicare Advantage “bundled” plans are offered by private insurance companies (carriers). You use them IN PLACE of Original Medicare, but they are still Medicare. Moreover, they must include all the same Medicare services covered by Part A (hospital) and Part B (medical). In addition, almost of them include Part D (prescription drugs).

You will hear/see these plans referred to as MA plans, and MAPD plans when they include prescription drugs.

What is the Advantage to Choosing a MA or MAPD plan?

The first advantage to these plans is that many of them have lower out-of-pocket costs than Original Medicare. Secondly, they often have extra benefits such as dental, vision or hearing that is not included in Medicare.

What are the Costs of a MA / MAPD Plan?

First, remember that most people have Medicare Part A “premium free”. (See this page on the medicare.gov website if you are wondering if you are in the “most people” category.) Second, remember that most people also pay a monthly premium for Part B. However, some Medicare Advantage plans will pay all or part of your Part B premium.

There may be many (or just a few) different MA and MAPD plans available in your area. They will all be set up differently and cost different prices from carrier to carrier. We suggest finding an independent insurance agent/broker that can compare different plans, carriers (insurance companies) and prices. They will help you pick a plan that fits your lifestyle and financial needs. Please note, there are often plans out there that have low or even $0 monthly premiums.

In addition to whether or not you pay a monthly premium with a MAPD plan, each plan will have a different set up for out-of-pocket costs:

• Some plans have a yearly deductible.
• Other plans have co-pays for office visits.
• Some plans have out-of-network costs
• And some plans have yearly max out-of-pocket limits.
  See this medicare.gov page for more info on MA costs.

You will need to decide what plans fit well with your monthly cash flow situation in addition to how often you need medical products and services.

How do MA and MAPD Plans Work?

Insurance companies usually set-up Medicare Advantage programs as a PPO or HMO networks. You might be familiar with this style of network plan insurance if you had (have) one from an employer or even from the open marketplace.

Typically, you will need to use doctors in your MA plans network. (Unless it is an emergency, or unless you are willing to pay extra to go “out-of-network”). If you have providers you want to keep, ask them if they are part of a network you are considering. In some MA/MAPD plans, you may also need referrals to see specialists. These are all plan specific requirements. You will need to look all these requirements prior to making your MA decisions.

HMO and PPO plans have much more robust networks now than plans from the past. Most people can find a plan that is large enough/flexible enough to work with their lifestyle. This is true even if they travel frequently in retirement. I recommend talking to a licensed agent to make sure you understand how the plans work.

When Can You Sign-up for a Medicare Advantage Plan?

If you are a US citizen with both Part A and Part B Medicare coverage, you can join MA plans in your area during these times:

• During your Initial Enrollment Period (IEP): Just like joining Original Medicare, you can join a MA plan during the 7 month period (3 months before the effective date of Medicare Part A and B, including the month Medicare begins, and then 3 months after) of time that you are turning 65.

• During a Special Enrollment Period (SEP): There are special circumstances that give you the opportunity to enroll in a MA/MAPD plan. These include (but are not limited to) moving to a new county, losing group health (like from an employer), or managing a chronic illness. To learn more about SEP’s and their time frames, please visit this page on the government’s website.

• During the Annual Enrollment Period (AEP): October 15th to December 7th, is when you have the opportunity each year to join an MA/MAPD plan. Your new coverage will begin January 1st.
  
  *OEP – As of 2019, if you are already in a Medicare Advanage plan, you can also change plans during AEP, or you can switch plans once (or switch back to Original Medicare) during Open Enrollment Period – January 1st to March 31st.

Other things the US Government would like you to know about MA Plans:

• Emergency and Urgent Care is always covered with MA plans.
• MA plans cover all Original Medicare Services and carriers must follow all Medicare rules.
• MA plans may have extra benefits like vision, health, dental and other fitness/wellness programs.
• You can join a MA plan with pre-existing conditions (except for ESRD, which is a special case and has other options).

Who can Help You with a Medicare Advantage Policy?

Just like a supplement, you can compare these plans online, but I suggest you talk to a professional, independent insurance broker that can help you compare plans. It won’t cost you any more money to use a professional, and Medicare Advantage Plans can be overwhelming when you are trying to pick one, especially if there are many offered in your area.

Remember, independent agents work for you (not the carriers), and having an actual person to help you in communicating to insurance carriers and keeping you updated each year is very valuable. This is something you do not get if you sign-up directly with a company online.

If you are in the state of Nebraska and you are looking for an agent to help you in any area of Medicare, Health or Life Insurance, please get in touch with me here.

Where to go next:

• Medicare Supplements vs. Medicare Advantage – What is right for you?
• What are Medicare Supplements?

The post What is Medicare Advantage appeared first on Medicare Life Health.