Saving Money

Wealth Gap Lasts Into Retirement

August 15, 2014 by Twila Van Leer

It just seems to make sense that if you keep plugging along at a your job, by the time you retire you should have come closer to the level of wealth some others enjoy.

Not so, experts in the field say. Thousands of Americans struggle to set aside enough money to enjoy retirement, particularly those who are self-employed. They are having little success at building an adequate post-employment reserve.

The challenge is so overwhelming that many refuse even to look it square in the eye, which becomes a serious part of the problem. Pensions that used to provide the safety net for many workers are becoming rarer in the private sector and workers at the low end of the totem pole often have no access to such programs.

All of this contributes to the widening gap between the average worker and the wealthy. With more than 70 million Baby Boomers preparing to leave active employment and settle into retirement, that is not good news. The net result may be government services stretched more thinly and more elderly people staying in the working ranks for longer, increasing the challenges for younger workers looking for jobs.

Who Fares The Best In Retirement?

Predictably, next to the really wealthy, those who fare best in the retirement picture are highly educated couples. They are likely to have more resources such as 401k plans, savings and home equity that are a boon when their jobs end. Those with less education, health issues and/or lower income and fewer resources can only watch in frustration as their prospects for a financially secure retirement fade into the distance.

The old saying that the rich get richer while the poor get poorer is literally true in today’s economy. Incomes for the top 1 percent of earners rose 31 percent from 2009 to 2012, according to an economist at the University of California/Berkeley. For the remaining 99 percent, the rise averaged 0.4 percent.

In households with annual income under $25,000, nine of 10 had savings under $10,000, according to the Employment Benefit Research Institute. For households in which earnings topped six figures, 42 percent had savings of at least $250,000, the institute reported. Five years ago, that percentage was 34 percent, another indication that the retirement prospects for those in the low-earnings categories are making no headway toward any kind of parity.

Make A Million At Age 70

July 11, 2014 by Twila Van Leer

The 70s Could Be Your Golden Years In More Ways Than One

So you’ve retired. The end of the earning road, right? No way, say financial experts who have studied the issue. More than one fortune was built by people who had passed the 70-year milestone. Later-life entrepreneurship actually has some benefits that might not have worked earlier, they say.

A Bankrate.com article by Chris Kissell suggests that, with a little effort and sacrifice, there is money to be made by people who have some experience behind them. No need to give up that dream of spending the time you have left in comfort.

The suggestions advanced by the experts include:

Invest Aggressively

Making small investments while you are in your prime working years may give you a nice little nest egg. But if that opportunity passed you by, it isn’t too late. Invest as much as you possibly can every month and hope for good results. According to James Twining of Financial Plan in Bellingham, Wash., a 70-year-old retiree who could invest $2,393 per month, at an annually compounded rate of 10 percent a year could end up with a million dollars by age 85. The equity markets have been returning an average of 10 percent per year since 1926, he notes. He warns against the temptation to gamble on high-stakes stocks, a strategy that actually can defeat your success ratio.

Start a Business

Creating your own business is one of the historically successful ways to increase your worth. Older first-timers actually have some advantages over younger entrepreneurs, says William Carrington, founder of Arrington Financial Planning in Arlington, Va. He is convinced it is the best route to financial security. Those in the retiree camp have a lifetime of experience on which to draw and have generally developed expertise in at least one line of endeavor. His advice is to explore that expertise and see how it could translate into a viable company. In the process, it may be possible to spread the wealth by hiring other older (often that translates to more reliable) retirees, many of whom are willing to work for less than young folk.

Delay Social Security

The longer you wait to collect Social Security, the larger the monthly payment. It is one of the most stable sources of income for the elderly. According to Barry Korb, president of Lighthouse Financial Planning in Potomac, Md., a couple who hold off on collecting their SS until age 70 could end up with a comfortable amount — up to a million dollars— that would be a great investment fund if carefully handled. He posits that a couple, both age 66 and entitled to maximum SS payments, could realize a 32 percent increase in their payments, about $845 per month each or $1,690 for the two. Invested, say, in a Standard & Poor’s 500 index fund, which averages a 7.84 percent return after taxes over the years, they would be millionaires by the time they were 92. That doesn’t take into account SS increases, which would add to the total.

Buy Real Estate

This avenue to wealth requires significant risk, but is a proved method for getting rich quickly. The best return — and the greatest risk — comes from using leverage. For instance, if you purchased a $500,000 property with a 20 percent down payment, and if there is a 5 percent appreciation in the first year, the increase for you is $25,000. That’s good, but again, the experts point to the risk and advise caution.

Forget About Making a Million

Aside from the bragging rights in having accomplished what for many is a lifelong goal, what’s the point? Given the inevitability of decline and death, is it worth the effort? For some, it would be, especially if their objective is focused on the well-being of dependents. However, people like Twining who deal with financial issues for a living, think a drive to accumulate huge amounts of money in the twilight years is wasted effort. “Get-rich schemes very rarely work,” he says. “Somebody who is 70 or older would be foolish to give it a try.”

In other words, it’s possible, but . . .

Saving Money On Superbowl Sunday

January 31, 2014 by Sherry Tingley

Football Stadium Food Display – Photo From Philly.com

Football Fans Unite

Face it. You’re in good company — among the tens of thousands who don’t hold tickets to Super Bowl XLVIII, the football event of the year. So while MetLife Stadium in East Rutherford, N.J., is packed to the hilt with screaming fans Sunday, yelling for either the Denver Broncos or the Seattle Seahawks, you’re stuck with hosting an at-home version.

Last year, some 108 million people watched the Super Bowl in settings ranging from posh parties (entry fees ranging from $200 to $2,000 each) to home theater TV rooms or the local sports bar.

Whatever suits your fancy, if you find yourself the host and/or hostess to the gang, make it easy on yourself. Don’t let the decorations, goodies and clean-up take precedence over the game. If all you score is a colossal headache by Sunday night, you’ll have defeated the whole purpose.

Delegate

First of all, get help. Enlist other enthusiasts in your group to share in the chores. Gather at the largest available home and divide out the food. This is one of those occasions when potluck can work. If you fear too much overlap, keep a sign-up sheet so you don’t end up with twenty bags of chips and no dip. Otherwise, pre-assign items that are easy on the budget and on the preparation. Sideline fussy dishes with lots of ingredients. Buy with coupons and buy in bulk. Inexpensive snacks such as pretzels, chips and nuts help satisfy appetites before, after and even during the big meal. The idea is to enjoy the munchies while enjoying the game.

Pizza Deals

Pizza is popular and when it’s Super Bowl time, many of the well-known outlets have special deals that let you feed a crowd without breaking the bank. A few of the online deals being advertised include: Dominos: Choose any two or more two-topping medium pizzas for $5.99 each. Or eight pieces of chicken, an oven-baked dinner or stuffed cheesy bread, also at $5.99. Papa John’s, which is noting its 30th anniversary, has a large one-topping pizza for only 30 cents with the purchase of a large pizza at the regular menu price. The chain also has an online coupon, code pjmvp that allows you to order $15 or more online and get a free three-topping pizza. Pizza Hut has a deal that gives you two medium two-topping pizzas and two sides (or a third medium one-topping pizza) for just $19.99. As kickoff approaches, the deals are changing faster than a chalkboard game plan, so check with Living on the Cheap’s Dining Page before you make up your mind.

Dishwashing

Used to be paper plates, cups and other items saved money. But prices for these paperware items have soared in the past few years. Use your own dishes if you have enough to go around. Have guests bring their own, if necessary. You may gain in dish washing what you lose in savings on purchases, but refer back to suggestion No. 1 above. Share the chores.

Dollar Stores

The neighborhood dollar store might surprise you with the number of items you could pick up for decorating. A few pompoms and streamers can go a long way. Of course if you’re partial to either of the competing teams, focus on the colors that suit. That would be orange and blue for the Broncos, blue and lime green for the Seahawks.

Make It Easy

Most of all, remember rule No. 1. Make it fun and easy. Don’t tackle more than you’re game for, and keep some perspective as you cheer for your team. There will always be a Super Bowl XLVIX.

Bonus Recipe

This is one of the easiest recipes to make that people just love. It serves 6 to 8 people and is very filling. Certainly enough for a meal.

Cheesy Vegetable Chicken Soup

2 cups chopped broccoli
4 cups cubed potatoes
2 cups sliced carrots
2 cups diced celery
1 1/2 cup chopped onions
4 cups sater
6 chicken bullion cubes

Boil the above ingredients in a large covered pan for 20-30 minutes. Drain off most of the water.

3/4 c. flour
1 cube of butter
3 cups of milk
dash of white pepper
1 lb. of Velveeta cheese
3 cans cedar cheese soup
4 cooked chicken breasts – cut into small pieces

Mix everything but the chicken together in a frying pan. Stir constantly on medium heat until soup like consistency. Add chicken. Pour into vegetable mixture. Keep warm in crock pot. Enjoy your Superbowl Sunday party!