Question: I am 60 and my husband is 56. Does it make more sense for me to begin collecting at 62 instead of waiting until I am 66? I figured I could be collecting for eight years because when I turn 70, he will be 66 and at that time I can collect 1/2 of his which is much more than mine would be at my full retirement age. My math shows it is beneficial but I would like your advice. Also, if I did collect at 62, what is the maximum I can make at my job to continue working?

Answer: So, heres what David Cechanowicz, a senior financial planner with REDW Stanley Financial Advisors, had to say:

The question of when and how to file for Social Security benefits is linked to a host of issues that are unique to each claimant. In your question you gave me a slight glimpse of some of the data, but not enough to give you a definitive answer.

To set the stage, all of the following can have a significant impact on the retirement claiming question.

Health The issue of health and longevity is foundational to answering the question of when should I claim my Social Security retirement benefits. Closely linked are questions that focus on the state of your personal finances, your willingness and or ability to work, and the amount of other assets or sources of income that you might have to supplement your income in retirement. Also, the amount of your own retirement benefit, and the amount of possible spousal and or retirement benefits that you may be entitled to factor into the equation.

Assuming that you were born in 1957, your full retirement age is 66 and 6 months, and your husbands full retirement age is 67. For both of you, claiming early will represent a significant reduction in benefits from those available at full retirement age, or afterword, for those who can wait for delayed retirement credits.

From what you have told us, you will reach your own full retirement age during the year that your husband turns 62. At that time, if he has filed for benefits, you will be eligible for 50% of his primary insurance amount, or the benefit that he will collect when he turns age 67. It is important to note that you will be eligible for half of his full retirement benefit, even if he claims his benefits at age 62. That is because you will have reached your own full retirement benefit at that time. However, if he waits to claim his benefits at his full retirement age, you will not be able to claim a spousal benefit on his work record.

A financial planner that I reached out to suggests that your instinct about claiming early is probably going to be your best choice. Since your husbands earliest retirement age coincides with your own full retirement age, and if you dont run into the earnings test, then you will probably be best off claiming early, especially if he claims early as well.

The earnings test that you asked about is indexed for inflation and will be higher than the number for 2017. For this year, for every two dollars that you earn over $16,920 would require you to give back one dollar of Social Security benefits. Sometimes it will still make sense to be subject to the earnings test for individuals who end up giving back only a small part of their Social Security benefit.

For example, assume a retirement benefit in 2017 of $600 a month and a worker who is between the ages of age 62 and 65. (In other words, working in other than the year that he or she reaches full retirement age. In that year the exempt amount rises to $44,880. Additionally, a worker gives up one dollar of Social Security for every three dollars of income above the exempt amount.) In that case, you could work for the entire year and earn $23,000, and end up still getting Social Security checks for the last six months of the year of approximately $600 a month.

Original post:
Collect Social Security at 62 and spousal at full retirement age? - MarketWatch

Its as if hes a rookie, as opposed to a quarterback who spent the last 11 years in the NFL.

Jay Cutler is once again adjusting to the speed of the game.

With no offseason program or minicamps, hes had to hit the ground running in Miami, coming out of retirement and dumping his plans to be an on-air football analyst to step in for the injured Ryan Tannehill.

Coming from a place youve been for eight years, you kind of know everybody, said Cutler, 34, who spent his first three seasons in Denver and the next eight in Chicago. Theres a new influx of people from year to year, but for the majority, you know everybody.

He said his first few days with the Dolphins were a whirlwind, and that its getting easier and more comfortable by the day.

Of course, Cutler is quite familiar with the offense of coach Adam Gase, who was his offensive coordinator with the Bears in 2015 when the quarterback threw for 21 touchdowns with 11 interceptions, and had a career-best passer rating of 92.3.

He has the offense down pretty good, Gase said. Hes a quick study.

Its just really knowing what it is and seeing it in your head on paper and then all of the sudden youve got four guys rushing at you or they bring some kind of exotic blitz and the processing speed of all that. And then still trying to figure out the receivers body language or run courses and play-action fakes. Theres a lot of little things that go on just besides saying, Hey Im going to execute this like its on paper.

The Dolphins are looking to finally reshuffle the power structure in a division that has been dominated for so long by Tom Brady and the New England Patriots.

Brady, who turned 40 this summer, is on the verge of all sorts of records. He led the NFL with 36 touchdown passes last season and is tied with Peyton Manning, Drew Brees and Aaron Rodgers with a record four seasons of at least 35 touchdown passes. Four more regular-season victories would move Brady past Manning (186) and Brett Favre (186) for the most in history by a starting quarterback.

Whats more, Brady and Manning are the only two players with 11 seasons of 12 or more wins. One more, and Brady would stand alone.

Hes not getting too far ahead of himself, though. Hes almost annoyed by all the 19-0 talk thats buzzing around the powerhouse Patriots.

This team is so far from where we need to be, and we have so far to go, Brady told WEEI radio in Boston. Its really unfair to set expectations, to me in my mind. Its really a setup, you know?

At the opposite end of the quarterback spectrum are the New York Jets, who have the underwhelming trio of Josh McCown, Christian Hackenberg and Bryce Petty. There was much speculation this summer about why the Jets would pass on signing Colin Kaepernick, who is better than any of those three.

In Buffalo, Tyrod Taylor is missing two of his favorite targets, receivers Sammy Watkins and Robert Woods, both of whom are now playing for the Rams. He does have former Philadelphia receiver Jordan Matthews, but he is injured (sternum).

This is a critical juncture for Taylor. The Bills are committed financially to him through this season, and they have the option to pay him a $6-million roster bonus in March to keep him for 2018 at $18.08 million. Or, they could save $14 million by releasing him. His deal was restructured during the offseason and expires after the 2018 season.

Here is a capsulized look at each team in the AFC East in predicted order of finish:

1 | NEW ENGLAND

2016 | 14-2, 1st in East

Last year in playoffs | 2016

Going all the way: With Tom Brady turning 40, the Patriots are clearly loading up for another Super Bowl run. They signed Buffalo corner Stephon Gilmore and traded for New Orleans receiver Brandin Cooks. They re-signed their defensive leader, Donta Hightower, and Super Bowl hero James White. Rob Gronkowski is healthy again. They are rolling.

Theyre doomed: Theyre thin on the defensive line after letting Jabaal Sheard and Chris Long go. Their top draft pick (a third-rounder), defensive end Derek Rivers, is already done for the year because of a torn ACL. They didnt have much of a pass rush last season, but they didnt play many top-notch quarterbacks. This year they face Matt Ryan, Drew Brees, Cam Newton, Ben Roethlisberger, Philip Rivers, Derek Carr

Now hear this: This team is so far from where we need to be. We have so far to go. Its really unfair to set expectations. Tom Brady.

2 | BUFFALO

2016 | 7-9, 3rd in East

Last year in playoffs | 1999

Going all the way: LeSean McCoy looks great in his third training camp with the Bills, and he might be the best running back in the NFL. Hes got a lot of mileage, but hes not breaking down. Buffalos defensive line is intact with Kyle Williams, Marcell Dareus, Jerry Hughes and second-year defensive end Shaq Lawson.

Theyre doomed: They are light on receivers. Robert Woods and Marquise Goodwin left via free agency, Sammy Watkins was traded to the Rams and Anquan Boldin retired. The team picked up former Philadelphia receiver Jordan Matthews, but he suffered a chipped sternum in his first practice. It remains to be seen if Tyrod Taylor is the long-term answer at quarterback, and the odds are against him now that hes been stripped of weapons.

Now hear this: This is not a throw-in-the- towel thing at all. You dont know me if you think Im throwing in the towel. Brandon Beane, general manager, on Buffalos big-name talent purge.

3 | MIAMI

2016 | 10-6, 2nd in East

Last year in playoffs | 2016

Going all the way: Quarterback Jay Cutler had the best year of his career when he had Adam Gase as offensive coordinator in Chicago, so that bodes well for the Dolphins. Receiver DeVante Parker had a terrific summer, and this looks like it will be a breakout season for him. Running back Jay Ajayi is coming off a tremendous year. Linebacker Lawrence Timmons should help fortify a porous run defense.

Theyre doomed: Cutler is who hes been over his 11-year career not a proven winner, and a difficult teammate. The offensive line is filled with health questions. The run defense was ranked 30th last season and probably didnt do enough to make dramatic improvements. The Dolphins were 8-2 in one-score games last season, and the law of averages are due to catch up to them.

Now hear this: Those are tough. They wear you down. But that wasnt the sole reason. I mean, they released me, so it was kind of end of the road at that point. Cutler, on all the losing in Chicago.

4 | NEW YORK

2016 | 5-11, 4th in East

Last year in playoffs | 2010

Going all the way: At this point, going all the way for the Jets would mean getting the No. 1 pick in the 2018 draft. The arrow is going up in a handful of spots, however. The team has some building blocks in defensive lineman Leonard Williams from USC, and rookie defensive backs Jamal Adams (first round) and Marcus Maye (second).

Theyre doomed: The quarterback situation is a disaster with Josh McCown, Christian Hackenberg and Bryce Petty, and the situation at wide receiver isnt much better. The Jets cut veterans Brandon Marshall and Eric Decker. Quincy Enunwa was going to be their No. 1, but he suffered a bulging disk in his neck at the start of camp and is out for the season. So now the top guys are a collection of unknowns from the class of 2016: undrafted free agents Robby Anderson and Jalin Marshall, and Charone Peake, a seventh-round pick.

Now hear this: I really dont have time for a bunch of ... that happened a year ago. Todd Bowles, coach, on Sheldon Richardson criticizing former teammate Brandon Marshall.

sam.farmer@latimes.com

Twitter: @LATimesfarmer

Read more here:
AFC East preview: Jay Cutler, after coming out of retirement, gets uo to speed in Miami - Los Angeles Times

Chicago Business Journal

Money in America: Baby boomer retirement wave opens up big business opportunities Chicago Business Journal While economists have struggled for decades to determine what challenges will be created by tens of millions of baby boomers reaching retirement age all at once, many businesses have come to view the coming retirement wave as a chance to cater to a ... and more »

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Money in America: Baby boomer retirement wave opens up big business opportunities - Chicago Business Journal

by Wendy Connick for The Motley Fool @CNNMoney September 1, 2017: 9:09 AM ET

Will I have enough income to support myself?

You may be psychologically ready for retirement, but if you're not financially ready, you'll have a pretty miserable retired life. Before taking the final leap, review your retirement savings accounts, your Social Security statement, and any other sources of retirement income you have lined up. Add up your annual sources of income to see how much you'll have coming in each year (for retirement savings accounts, assume you'll be taking 3% to 3 1/2% per year), then compare the resulting total to your current income. If your projected retirement income is significantly lower, ask yourself if you can really get by on that much money without being miserable. If you're not sure whether your projected income is sufficient, use a retirement calculator to add up your likely expenses and compare that number to your projected retirement income.

What will I do with my time?

The more involved you are with your career, the more jarring it will be when you retire and leave that career behind. It's important to come up with something before you retire that will take the place of your career in retirement. Don't assume you'll be fine just hanging around the house catching up on your reading. You might enjoy such a relaxed lifestyle for a few weeks, but many people find that boredom quickly sets in. One way to ease the transition to retired life (assuming your employer agrees) is to switch to a part-time schedule for a while, either right before or during the first part of your retirement. Another option is to look for other activities to fill the void: hobbies, classes, volunteer work, travel, family activities, and so on.

Where will I live?

Your current living situation may or may not work for you in retirement; it's certainly something that you should consider in advance. For example, if you own a big house it may be more home than you really need, and the time and energy that you currently spend on cleaning and upkeep may be more of a commitment than you want to make as you get older. Selling a too-big house and moving into smaller living quarters is also one way to supplement your retirement income. Even if you are currently in good health, you might want to think about moving into an assisted living community. Some of these communities allow you to start out in independent housing and then move you into a higher-care part of the campus if your health deteriorates later. If you do eventually require long-term care, being able to get that care in a familiar living environment can be very reassuring.

Do I understand how my financial life will change in retirement?

Switching over to retired life is pretty jarring for your finances, too. And it's not just a matter of changing over your sources of income and the kinds of expenses you'll incur (although that's certainly a factor too). For example, once you retire you'll no longer have an employer withholding income taxes for you. You'll have to calculate and pay your own income taxes. Most retirees are required to make quarterly estimated tax payments to the IRS and sometimes to their states as well. You'll also be responsible for calculating and taking required minimum distributions (RMDs) from your tax-deferred retirement accounts according to the IRS's schedule. And if you have multiple types of accounts -- for example, a tax-deferred IRA, a Roth IRA, and a standard brokerage account -- you'll have to decide how much to take from each account every year to provide the income you need. If you are unsure on any of these points, consider scheduling an appointment with a financial adviser with experience in retiree income.

Other factors

Entering retirement also comes with some significant one-time decisions that may be irrevocable. For example, you'll have to decide whether to claim Social Security benefits early, at full retirement age, or late. This decision will affect your entire retirement, because the date at which you choose to claim Social Security benefits will determine how much you get in your benefits checks as long as you live. You'll also have to decide whether to choose original Medicare (possibly with a Medigap plan) or to go with Medicare Advantage.

Related links:

Motley Fool Issues Rare Triple-Buy Alert

This Stock Could Be Like Buying Amazon in 1997

7 of 8 People Are Clueless About This Trillion-Dollar Market

Start researching and thinking about these decisions well in advance, so that you are totally prepared when the time comes to make them. The more you know about the possibilities, the wiser your final decision is likely to be.

CNNMoney (New York) First published September 1, 2017: 9:09 AM ET

The rest is here:
4 questions to ask yourself before retiring - CNNMoney

MOULTON The retirement last week of Lawrence County Sheriff's Deputy Barry Johnson was bittersweet for a sheriff who already is struggling with a shortage of deputies.

Sheriff Gene Mitchell said Johnson, a deputy for the past 15 years, had been counting down the days.

He told me last year he would be retiring, Mitchell said. Barry was steady, and we all hated to see him go. If he gets tired of retirement and wants to come back part time, my door will be open.

He said Johnson was a patrol officer and served warrants.

Replacing Johnson will be a challenge, Mitchell said.

I dont know if it will be tomorrow or in two months, he said of hiring a replacement. If I hire someone without experience, they have to go to the (police) academy. Thats dead money youre paying until they complete school and can get on the road. If an experienced officer walks in the door tomorrow and his background is clear, I can start the paperwork, but that doesnt happen very often.

Mitchell said when International Paper shuttered in 2014, the county was forced to make drastic cuts. He said his department was probably the last to be affected, but he was forced to lay off a deputy in 2016.

At full strength, the sheriffs office employs 11 deputies, not counting jailers and investigators. He said some experienced officers look for work in other counties because of the fear of getting laid off.

Were behind the eight ball right now because we have three officers out for medical reasons and Barrys retirement, Mitchell said.

Deputy Ashley Bowling remains off the job while he recovers from a head injury he suffered while responding to a standoff Oct. 16. He was hit with a boulder by Demetrae Griffin of Moulton, Mitchell said.

Deputy David Crittenden was injured in February dealing with three juvenile burglary suspects in the Langtown community.

If Moulton (police) had not responded as backup, it would have been much worse, Mitchell said. Not having enough personnel like in this case is dangerous, and we will get people hurt.

The third deputy, Jeff Culp, is out following a non-work-related surgery, the sheriff said.

Mitchell said starting pay for inexperienced deputies is usually between $12 and $13 an hour. He said more experienced deputies, like Johnson, make about $18 per hour.

County Clerk Donna Llewellyn said the sheriff offices budget for fiscal 2017 is $2,121,191.

Hes used about 90 percent of his budget with a month to go, she said. Hell probably go over; thats not unusual.

Llewellyn and Mitchell agreed overtime pay chews through the budget.

If we get a call, we have to respond, Mitchell said. We pull a deputy in and pay him overtime. I simply dont have the staff to avoid it.

He said sometimes he is forced to put investigators on the road as deputies.

Llewellyn said the county commissions first budget work session is 10 a.m. Wednesday. If we get another cut from (the Tennessee Valley Authority), we may have to make more cuts, she said.

TVAs in-lieu-of-tax payments have decreased across the board in recent years, TVA officials said in December.

According to TVA records, Lawrence Countys portion of TVA tax-equivalent money for fiscal 2017 is $1,340,449. In fiscal 2016, the county received $1,849,064.

The fiscal 2017 estimated total is 49.2 percent of the $2,723,318 the county received in fiscal 2011, according to the TVA.

Read the rest here:
Retirement, 3 medical cases leave sheriff short of staff - Times Daily

Wal-Mart (WMT) has had a rough year, as has just about any company in the grocery business besides Whole Foods (NASDAQ:WFM). With Amazons (NASDAQ:AMZN) purchase of Whole Foods, the entire grocery industry is shaking in their boots.

But Wal-Mart is no ordinary grocer. In many ways, they are already Amazon and Whole Foods wrapped into one. It may have gone unnoticed by some, but Wal-Marts website and web presence in general has improved dramatically over the years.

Wal-Mart has worked very hard to establish their online presence and it is finally beginning to pay big dividends for them. They purchased online retailer Jet.com for $3 billion, which shows their commitment to the online retail world. And of course they already have their stores all over the country, which gives them the distribution they need to compete against the Amazon and Whole Foods merger.

If you believe Wal-Mart will survive and even thrive in what is becoming a new era in online shopping, then read on and find out how Wal-Mart might save your retirement portfolio.

Running out of money in retirement is something so many people dread. If you dont believe me, take a look at the charts below.

Many people approaching retirement have reason to be concerned. With interest rates so low and probably low for years to come, there is very little income to be had from bonds these days. Many retirees just ten years ago lived off of bond interest payments alone.

Its hard to believe, but in 2007 when interest rates were more than double the level they are today, many people could retire on 100% treasury bonds. Lets take a look at an example of this. I ran a retirement scenario in the WealthTrace Planner and my assumptions are below:

Inflation (CPI)

2.3%

Current Age of Both People

55

Age Of Retirement

65

Age When Both People Have Passed Away

85

Social Security at age 67 (combined)

$34,000 per year

Average Savings Rate

20% on Income of $150,000

Total Investment Balance Today

$600,000

Recurring Annual Expenses in Retirement

$54,000

Investment Mix

70% U.S. Value Stocks, 30% Treasuries. Changes to 100% Treasuries at Retirement

Investment Location

40% in taxable accounts, 60% in IRAs

Return Assumption Value Stocks

6.8% per year

Standard Deviation Value Stocks

16.20%

Return Assumption Treasuries

5% per year

Standard Deviation Treasuries

7.20%

The chart below shows this couples retirement income vs. expenses through time. Notice how they cover their expenses in every single year with just their social security and bond income. That would be impossible today.

How would this couple fair today with ten-year treasury yields at 2.2%? See the chart below for the answer.

The best alternative to treasuries for retirement, in my opinion, is now solid dividend-growth stocks. I believe most investors, both pre-retirement and in retirement, should have a healthy dose of strong dividend-growth stocks in their retirement portfolio. Wal-Mart fits perfectly for this.

Wal-Marts dividend yield is currently 2.6%. The five-year growth rate of its dividend is 6.5%. They have also never cut their dividend, and even increased it during the last recession.

Keep in mind that I am not recommending that investors put all of their money into one stock. We want to find a basket of stocks similar to Wal-Mart in order to diversify. Others that I have recommended before are Altria (MO), Exxon (XOM), and Procter & Gamble (PG).

Lets see what happens to this couples retirement plan today if we put them into a basket of dividend payers that have characteristics similar to Wal-Marts.

The income being thrown off by these dividend payers has saved this couples retirement plan. They now have enough income to cover their expenses.

Anybody approaching or in retirement needs to think long and hard about how they will generate enough income in order to meet their expenses. It should be their number one priority in terms of their retirement plan. With some diligent research, there are still great companies that can be found who pay a decent dividend along with solid dividend growth over time.

Disclosure: I am/we are long WMT, XOM, PG, MO.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Look To Wal-Mart To Help Your Retirement Portfolio - Seeking Alpha

VALDOSTA Learning in Retirement is counting down the days till the start of another season of meeting the educational, physical, intellectual and social needs of Valdosta State Universitys friends and neighbors.

A member-led and VSU-sponsored organization, Learning in Retirement kicked off during fall semester 2017 with a rock-n-roll themed luncheon Aug. 22 in the Regional Center for Continuing Education Auditorium. People were encouraged to come dressed in attire inspired by their favorite musical era and spent part of the occasion painting rocks for the Valdosta Rocks project.

Men and women, 50 years old and older, have 91 opportunities to learn during the Learning in Retirement fall semester 2017, which features a course lineup full of trips and tours, book reviews, topics that are simply good to know, special events and classes in the areas of health and fitness, computers and technology, fine arts, leisure, history, social studies and science, according to an organizational press release.

The first classes are scheduled to meet Aug. 28, with classes continuing through Dec. 15.

Membership costs $75 per person per semester fall and spring and allows members to participate in as many Learning in Retirement courses as they desire. Yearly memberships are available at a reduced rate. A few courses and special activities require an additional fee, which is always noted in advance in the course catalog.

VSUs Regional Center for Continuing Education is located at 903 N. Patterson St.

Contact Suzanne Ewing, Learning in Retirement program coordinator, at (229) 245-6484 or sewing@valdosta.edu to learn more.

Read the original here:
Learning in Retirement back in business - Valdosta Daily Times

Chelsea boss Antonio Conte is a little wary of Eden Hazard being called up for Belgium as he recovers from injury.

Radja Nainggolan insists he has yet to make a decision over his retirement from the Belgium national team, despite reportedly saying that he had quit after disagreements withcoach Roberto Martinez.

Nainggolan, 29, took to Twitter to denounce an interview given toNieuwsblad, claiming: "If something official is to be said, you will hear it from me. I'm just disappointed. I have not decided anything at all."

However, the Roma midfielder did not deny the interview took place.

Nainggolan had been quoted as saying that his retirement was down to a breakdown in his relationship with Martinez after the former Everton manager hit out at him ahead of the Estonia game.

"He called me at 11.00 (one hour before the squad announcement) and said he had the impression I was not focused enough on playing for the Red Devils during the World Cup matches in June. I was about to explode when I heard that," Nainggolan told Nieuwsblad.

"He didn't mention it, but we only talked for a minute, no more than that. As for Estonia, I was waiting for the lift for 37 seconds and was late. Other players were late too, I was not alone. It's always something.

"I am going to stop international football now. It makes no sense. He calls Youri Tielemans who is sitting on the bench and playing only a few minutes at Monaco.

"When he was appointed, Martinez said that the Red Devils must play in top competitions. Now that Axel Witsel is in China, suddenly that doesn't apply anymore. That's all fine, but I have to step up my game? Come on.

"Actually, I was in the same restaurant as Martinez in Ibiza. He did not say hello or goodbye, neither did I. How can you work together like that?"

Nainggolan has made 161 appearances for Roma since arriving from Cagliari in January 2014 and signed a new contract this summerafter links with Chelsea.

He continued: "It makes no sense to continue with international football. I played 52 games for Roma, who were second in Serie A last season. I always do my best, work with the team, still there is always something, some reason to leave me out.

"I won't do this anymore. I quit. I am 29 years old and they won't let me go any further than this. I'm sorry, but that's just how it is. I'm being pushed into this situation, so fine, now everything I do is for Roma."

Follow @ESPNFC on Twitter to keep up with the latest football updates.

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Radja Nainggolan: No decision taken over Belgium retirement yet - ESPN FC

During the past decade, however, that narrative has fallen by the wayside for many. More than 6 million Americans age 65 and older are carrying a mortgage, according to a study by the Census Bureau. Some remain "underwater" on their mortgages--that is, their loan principal is more than what their home is worth. Or they simply are not able to pay off their mortgage because of a mountain of other bills or career setbacks. They may even have college loans they're still making payments on.For many, the "debt-free" retirement seems much more difficult to achieve. And that has led some to consider selling their primary residence and renting as a viable alternative. Indeed, changing economics and a growing flexibility in housing choices has made renting a more likely choice for many retirees. Is it the right choice for you?The Economic Argument for RentingThe stark reality is that despite a housing bust in 2007-08 and low inflation since, homeownership today is expensive. The average monthly U.S. mortgage payment as a percentage of income hit a seven-year high earlier this year according to Zillow, the real estate Web site. The average homeowner pays $758 a month (as of the end of 2016), up from $690 in 2015.That has pushed even more Americans with falling or static incomes into renting. In a survey of renters aged 55 to 65, Credit Sesame, a debt management company, found that 51% of those surveyed rent because they cannot afford to buy where they live. Of those surveyed who can afford to buy, more than one-third nevertheless chose to rent due to the costs of home ownership (including not just mortgage but also upkeep and taxes), or the flexibility that renting affords. The most surprising finding from the Credit Sesame study, however, is that nearly half of those polled simply couldn't afford to buy a home due to paltry retirement income."About half of seniors rely on Social Security as their main source of income," the Credit Sesame study noted. "The average Social Security monthly payment is just $1,360, and if a person budgets the recommended 30% for housing expenses, that's a paltry $408 per month. That won't buy much even in a great housing market."Renting Means FlexibilityOne upside to choosing renting over buying: You can move to a number of places without the financial anxiety of selling or the prospect of not being able to sell for more than your purchase price. That opens up a number of possibilities for seniors. You don't have to worry whether you'll make money when you sell--that is, if you can recoup your investment minus a raft of closing expenses plus a broker's commission.Renting can open other doors, too. For instance, if you're willing to rent, you may be able to live in an expensive coastal area, where home prices are sky-high. Although rents are rarely bargains in premium areas, for most who can't afford million-dollar-plus properties, renting is still much more affordable.Or you may be able to move overseas to "try out" a country before you commit to living there. You could sample several locales as a renter. Thousands of retirees are relocating overseas to enjoy a higher standard of living, a hospitable climate, a low-stress lifestyle, and lower housing costs. Countries like Mexico, Ecuador, Colombia, and Malaysia regularly top the list of International Living magazine's annual "World's Best Places to Retire" list. The magazine also compiles a "retirement living index" that rates nations on things like lifestyle, healthcare, climate, and cost of living.Where Renting Makes the Most SenseIt's not difficult to tell where renting is a smarter choice, financially. Any search of real estate sites will give you a pretty good idea. Housing affordability, of course, is a prime factor, although taxes and local services are also part of the picture.In terms of local living costs, a recent survey by WalletHub found that six of the 10 "worst places to retire" were in high-priced California. The least expensive locales were in places like Laredo, Texas, and Orlando, Tampa, and Miami. The survey "compared the 150 largest U.S. cities across 40 key measures of affordability, quality of life, health care and availability of recreational activities."With housing, however, everything is relative. It wouldn't be fair to compare Akron, Ohio, with any coastal city in the Northeast or West. But you do need some benchmarks. Laredo, Texas, for example, "has the lowest adjusted cost-of-living index for retirees (76.93),which is 2.6 times lower than in New York, the city with the highest at196.26," WalletHub found.As with any relocation decision in retirement, you'll need to look at a wide range of expenses. Does the area have adequate healthcare services? What about long-term care services such as home and assisted living? Amenities like cultural institutions such as colleges, museums, and the arts are also important. You have to consider the big picture in living somewhere new--and what it costs--before you make a move.How to Gauge Your Rental ProfileWhen you're deciding whether to rent or buy, the first question is whether you want to be bothered with the expense and responsibility of homeownership. When you buy a house, there are local property taxes, maintenance expenses, and financing, unless you're paying cash. You also need some idea of how much your property will appreciate."It makes sense to buy in areas where your total monthly mortgage plushomeowner assessments and tax is less than the rent paid," said Hanson So with Credit Sesame."In high-growth metropolitan areas like New York, the San Francisco Bay Area, and other major cities, I find this is never the case, and it seems that monthly costs of owning a homearehigher than paying rent. That's why it's not automatically intuitive that it's best to own a home."Your time horizon is also important in the rent versus buy decision. You may want to spend a finite amount of time in an area, especially if you're not committed to the locale or just sampling."It makes sense to rent if you have a short-term three- to five-year horizon, but if you are committed to a 10-plus year horizon, then buying would likely be the better option in many cases," So adds.No matter which route you choose, you'll need to vet your finances and credit. How much rent can you afford? How solid is your credit record? Like banks, landlords may scrutinize your ability to pay rent on time.You'll also want to choose a rental unit with your needs in mind. Do you need an elevator or first-floor unit? Is the location close to shopping, healthcare, work, and amenities? Is the neighborhood safe? Is the landlord responsive to maintenance concerns? While many of these variables won't be known unless you live in a unit for a while, it doesn't hurt to ask local renters. Don't be afraid to knock on doors to find out.It also makes sense to pull your credit report and see if there are blotches on your credit rating. The higher your FICO number, the better your chances for obtaining credit--and being offered a lease (or low finance rates if buying). For a free copy of your credit report, click here. John F. Wasik is a freelance columnist for Morningstar.com and author of 16 books, including Lightning Strikes: Timeless Lessons in Creativity from the Life and Work of Nikola Tesla.The views expressed in this article do not necessarily reflect the views of Morningstar.com.

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Renting in Retirement May Be a Good Idea After All - Morningstar.com

Hows this for putting a dent in your retirement savings plan? A 65-year-old couple retiring today will need an estimated $275,000 in todays dollars to cover anticipated health care expenses, according to Fidelity.

And if that wasnt shocking enough, consider this:

The 2017 estimate is 6% greater than last years figure of $260,000 (general inflation in 2016 was just 2% and health care inflation was 3.7% ). That means next years estimate all things being equal would be $291,500 and the year after that would be $308,990. It also means that health care costs for retirees are rising faster than for population at large.

The Fidelity estimate is a 70% increase since Fidelitys initial retiree health care cost estimate in 2002 of about $161,000. That works out to an average increase of $7,600 a year.

And three, some firms estimate the amount a 65-year-old couple would need earmarked for health care expenses in retirement to be even greater than $275,000.

Read the 2017 retirement health care data costs report

By way of background, Fidelitys 2017 estimate represents the present value of month expenses for Medicare premiums, Medicare copayments and deductibles and prescription drug out-of-pocket expenses. It assumes enrollment in Medicare health coverage but didnt include the added expenses of nursing home or long-term care, which could make the $275,000 number even higher.

So, what should preretirees make of Fidelitys estimate?

Most pay for health care as they go

Most retirees today dont have a pile of money socked earmarked specifically for health care expenses. Instead, they tend to pay for such expenses as incurred from a mix of income, including Social Security, personal assets, and earned income.

Recurring health care costs remain stable throughout retirement

Usage and expenses of recurring health care services remain stable throughout retirement, while usage of nonrecurring ones increase with age and tend to be more expensive, according to a report published by the Employee Benefit Research Institute (EBRI), a nonpartisan research institute based in Washington, D.C.

For instance, in 2011, average annual out-of-pocket health care cost for a household between 6574 years old was $4,383, which accounted for 11% of total household expenses. But that shoots up for households ages 85 and above to $6,603 a year, or 19% of total household expenses.

And its those nonrecurring unpredictable expenses such as surgery, hospitalizations and nursing home care that, in the absence of a plan to manage those costs, can wreak havoc on a households finances, according to EBRI.

By way of comparison, the EBRI report also suggests that a person with a life expectancy of 90 would require $40,798 not including expenses for any insurance premiums or over-the-counter medications at age 65 to fund his or her recurring health care expenses. And that number, call it $82,000 for a couple.

In another report, one that lumped all premiums for Medicare Parts B and D, premiums for Medigap Plan F, and out-of-pocket spending for outpatient prescription drugs, EBRI suggested that a couple with median prescription drug expenses would need $165,000 if they had a goal of having a 50% chance of having enough savings to cover health care expenses in retirement. And, if they wanted a 90% chance of having enough savings, they would need $265,000, according to an EBRI report.

Earmark Social Security to pay for health care

For some, it might make sense to use your entire Social Security benefit to pay for health care expenses, and use other assets and income to pay for all other living expenses in retirement. Consider, for instance, a report published by Michael Kitces, publisher of the Nerds Eye View in 2015 estimated the lump sum value of Social Security. And what he found was this: Given an average Social Security retirement benefit of $1,294/month (in 2014), a 10-year Treasury rate hovering somewhere around 2% (at the time of Kitces writing), assumed inflation of 3%, and a life expectancy (according to Social Securitys own 2010 Period Life Table) for someone whos already reached age 66 (full retirement age (FRA) for todays retirees) of approximately 17 years for a male and 20 years for a female, the average lump sum value of Social Security is about $280,000 for males and $335,000 for females. At a maximum Social Security benefit of $2,642/month (for those who maxxed out the Social Security wage base for 35 years), the value of Social Security amounts to about $572,000 for men and $683,000 for women.

In other words, the lump sum value of Social Security for a couple retiring at FRA would be $615,000, which is more than enough to cover the $275,000 Fidelity estimates that couple needs to pay for health care in retirement.

Of course, the trouble with this plan is that couples would need to make sure they have enough assets and income to cover all other expenditures in retirement, such as housing, food, transportation and the like. And that might be a push given that many even those who have been saving 30 years dont have enough saved to fund their desired standard of living.

Consider someone in their 60s who had participated in a 401(k) plan for 30 years had, at year-end 2015, an average account balance of more than $280,000 among participants in their 60s with more than 30 years of tenure, an amount that could be earmarked entirely for a couples health care costs. And the average 401(k) balance for someone in their 60s was $123,000, which is roughly what one person would need set aside to pay for health care costs in retirement.

Consider using an HSA

Some workers might have the luxury of using their health savings account (HSA) to fund health care expenses in retirement. HSAs are paired with high-deductible health plans (HDHP), which often have lower monthly insurance premiums than traditional health plan offerings, and, according to Fidelitys release, include these key tax benefits: contributions go in tax-free, balances and savings can be withdrawn tax-free for medical costs.

Read: Health care costs in retirement are only going up heres how to save

What else is worth knowing about Fidelitys study?

Most workers forget how much health care costs

Corporate employees are largely unaware of the costs they and their employers are paying for health care, said Michael Lonier, a retirement-income planner with Lonier Financial Advisory.

Much of the cost is hidden in their payroll deductions, he said.

Indeed, in 2015, the average company-provided health insurance policy totaled $6,251 a year for single coverage, according to ZaneBenefits. On average, employers paid 83% of the premium, or $5,179 a year. Employees paid the remaining 17%, or $1,071 a year.

For family coverage, the average policy totaled $17,545 a year with employers contributing, on average, 72% or $12,591. Employees paid the remaining 28% or $4,955 a year.

The first inkling some may get that health care is far more expensive than they were aware of is the COBRA notice they receive if they are laid off and now have to pay the full cost for their health insurance premiums, said Lonier. The period after corporate coverage but before Medicare eligibility for those who suffer a job loss can be a budget killer.

Medicare Part B can be expensive

Although Medicare part B premiums are a magnitude smaller than other insurance premiums, costs can still be high for those enrolled in Medicare who use health care services frequently, said Lonier.

For instance, you generally have to pay your deductible, coinsurance, and copayments. Plus, some of the items and services that Medicare doesnt cover include: long-term care (also called custodial care); most dental care; eye examinations related to prescribing glasses; dentures; cosmetic surgery; acupuncture; hearing aids and exams for fitting them; and routine foot care.

Read more about what Medicare doesnt cover

Whats more, even with a $0 premium Medicare Advantage policy, which, not surprisingly, are increasingly popular, the policy deductible/out-of-pocket limit plus part B premiums can be more than $8,000 a year per spouse, or over $16,000 a year for the household, said Lonier.

Over 20 years, even without the high inflation that has been persistent in health care for decades, that can reach a $320,000 lifetime total for those who spend the max out-of-pocket every year, said Lonier. With typical higher than CPI health care inflation, the number could easily double over the next 20 years.

Adopt a healthy lifestyle

No one gets to choose their DNA, and so for some, poor health comes with a high cost they cant avoid, said Lonier.

For everyone, it clearly pays to adopt a healthy lifestyle dont smoke, drink moderately, exercise, eat a very healthy diet, and actively manage stress, he said. Cut your out-of-pocket costs in half, and a $16,000 a year per household expenses becomes $8,000 a year or less. Just as mom always said, your health is your most valuable asset never truer.

One planners approach

So, how does one financial planner who has to build retirement plans for his clients, incorporate Fidelitys estimate into his practice, in real life?

The Fidelity estimate is a good reminder that there is a lot that we do not know about our future expenses, says Steven Schwartz, president of Wealth Design Services. I have tried to incorporate a published number such has the Fidelity estimate in my planning models, but I always end up feeling that I am imposing a spending constraint that is too artificial. The reason is that we really have no way of knowing whether those expenses will materialize for any particular individual or when those expenses will materialize.

Ultimately, the way Schwartz has come to think about health care costs is to frame the problem around the structure of insurance.

Most insurance policies create a choice around how we share expenses, he said. We can choose to pay a higher premium, higher copays, deductibles or co-insurances or higher maximum out-of-pocket costs. We do cash flow planning in our firm rather than goals-based planning and build these short-term known costs into our plans rather than trying to think about the overall long-term costs that are possible. We probably get to the same place because I think that those costs are what make up the Fidelity number. However, at least for me, this is a more concrete way to approach the problem.

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How to plan for health care in retirement without going broke - MarketWatch