Monthly Archives: January 2015

When to Start Social Security

WHEN TO START SOCIAL SECURITY

When to start social security for women is based on different factors than men. It’s also a very individual decision based on your circumstances. Your starting age actually depends on a number of different financial and personal factors.  Women need a smarter plan to stretch their incomes and benefits through a longer and more expensive retirement. ( http://blog.creativeretirementforwomen.com/11-ways-female-retirment-different/.)

We are all aware of the three major starting points to begin Social Security, 62, 66 or 70 years old. We are aware that taking benefits at 62 reduces it about 25% compared to 66. Taking benefits at 70 increases our amount by about 25% compared to 66 years old. Here is an example.

62 years = $1125 / month             $13,500 / year
66 years = $1500                            $18,000
70 years = $1875                            $22,500

When examining these numbers, it’s clear that the best situation is to collect the most on a permanent basis. But, you would receive it for less years.

Reasons to start at 62: The primary reason is that you need the money to live on.

1. You’re unemployed and it’s difficult getting hired.
2. You’re working part-time or your income is below $20,000
3. Your health is poor and you are unable to generate much income.
4. You don’t have longevity in you family history.
5. You are trying to minimize your long term taxation.
6. You’re starting an early spousal benefit before switching at 70

The first three examples are based on your current financial need. If your family longevity is short, taking benefits early makes sense. Since Social Security is subject to taxation, taking a lower benefit results in less taxation when combined with your other income. This makes sense if your other incomes are over $20,000. Your combined income for taxation when receiving Social Security is= 1) your AGI or adjusted gross income + 2)non-taxable interest(now taxable) + 3) half of your benefits. Let’s take a look at this example:

Adjusted Gross Income            $12,000
Tax-exempt interest                  $ 8,000
Half of Soc. Sec. benefits         $ 6,750

This total is $26,750 while your taxes begin at $25,000 if single. So, if you are making $20,000 a year or more, getting more social security will mean more taxation. The days of receiving tax free municipal bond dividends are over.

As a spouse, you are entitled to social security at 62 years old even if you never worked. You just have to be married for 10 years at some point and you can be divorced now. You can collect half of his benefits without any loss to him. You simply have your partner apply for social security and suspend his payments until 70. This allows you to receive you spousal benefits at 62 and start your own benefits at 70 when it’s higher.

Reasons to start at 70:
1. You are able to work full time with a decent income until 70
2. You need to lock in the highest benefit to maintain your lifestyle
3. You don’t have a big savings or multiple income streams
4. You are healthy and have longevity in your family
5. You want to collect the 8% a year by waiting
6. You will receive a greater cost of living increase

Due to the greater longevity and other expenses of women, most should wait until 70 years old to collect benefits. The key reason for most of us to wait is that we haven’t saved enough. Working longer not only increases your income, but also pays more into social security that increases your benefits. Your benefits increase about 8%(past full retirement age) a year by waiting. Many people consider that a good return on your money. The cost of living increase is a percentage, so the larger your benefit, the larger the increase in dollar terms.

In conclusion, I believe most people would receive the greatest benefits by waiting until 70 years old to collect. To get maximum benefit, take half of the spousal benefit at 62 and your full benefit at 70. If you fit into one of the reason to start early, then don’t be bashful about taking advantage. But, try to wait as long as possible. L.J.

More at: www.creativeretirementforwomen.com

Dating in Retirement

DATING IN RETIREMENT (Part 1)

Our need to emotionally bond does not change with aging as some have suggested. We will evaluate for different character traits when dating in retirement. But, the course of romance remains the same. I have talked to many women who, for various reasons, have given up on trying to find another mate. Some women don’t feel attractive or interested in men anymore, and some say they don’t want the trouble of a man. I can understand these reasons very well.

My sister is 58 years old and has been divorced for about 12 years now. But, she won’t date. She finally told me she just lost interest in sex. I know she wants companionship as she has a male friend whom she see every weekend. So, the need to bond with the opposite gender remains healthy and intact. She was a little surprised when I mention that males loose testosterone as their sex drive diminishes too. But, that still didn’t get her to date as she said, “Who wants to date an old lady like me?”

Maintaining a positive self image is important at any stage in life. As our bodies change, its common for both genders to be concerned about our self-confidence. But, we have all been rejected numerous times in life and we survived it. Remember not to let a prior difficult relationship cloud your judgment about moving forward to a better one. It’s probably the men who are more prone to being rejected since they initiate contact and ask for a date.

I checked with my female consultants who confirmed a few suggestions regarding confidence. The first is to always look your best. Men are very visual beings, as we all know, and they often go with first impressions. That means they take your entire appearance into consideration. Since looking attractive is important, dying your hair and wearing stylish attire are efforts you can easily make according to my group.

The second suggestion is to look available and, if you’re comfortable with the idea, even sexy. Many of us have lost our connection to intimacy. But, it’s time to reconnect. If you think you can’t look attractive over 60 years old, have you seen photos of Connie Stevens, Jane Fonda, Meryl Streep, Tina Turner, Gladys Knight, Glenn Close, Goldie Hawn or Martha Stewart lately? Just being healthy is attractive at any age.

The third suggestion we all agreed upon is to try online dating. If your social circle is smaller in retirement, you need to be a bit more creative. Online dating narrows the field to people who are interested in a relationship and you don’t have to leave the house. It gives you the opportunity to browse the profiles of others anonymously. In this scenario, there is certainly no risk to you as you evaluate the possibilities in the safety of your home. I seen some reports that say up to 25% of new relationships are found online.

The fourth recommendation is the importance of displaying a positive attitude. No matter what happened in the past, we will make the future brighter. I personally like to use positive affirmations and imagery. Before I meet somebody for any reason, I close my eyes and visualize how the meeting will go. If it’s business, I envision a successful agreement. If it’s personal, I expect a successful connection. It’s amazing how behavior follows mental imagery. I started using guided imagery after reading Creative Visualization by Shakti Gawain.

If there is still resistance to dating at our age, I sometimes ask the question, “Do you want to grow old and die alone?” It’s a blunt somewhat rhetorical question meant to be provocative. But, it gets people thinking more practically about the future of their social health. I would say that having a partner in retirement is more important than in midlife, since this relationship becomes the primary social support for many. Most of us will have medical procedures that require some help during recovery. Imagine if you became disabled for some reason, what would that be like without a partner who loves you?

In the next installment of Dating in Retirement, I’ll address the impact of reduced libido and the different character traits we now look for in a partner. L.J.

More at:      www.creativeretirementforwomen.com

Photo by Ambro. Published on 11 May 2011
Stock Photo – Image ID: 10041092

WOMEN’S SUCCESS = ROLE REVERSALS

WOMEN’S SUCCESS = GENDER ROLE REVERSALS

According to the Census Bureau(1), 685,000 men and 916,000 women graduated from college in 2009. That is 25% fewer men than women that graduate. In 2010, about 47% of the workforce was women. As women become the doctors, attorneys, and CEOs, the social culture around us will change. Since this educational trend is expected to continue, it will result in a gender role reversal as men realize the earning power of women. As women earn more and spend more time with careers, men will naturally take on more of the domestic responsibilities.

The result is a female culture that is moving forward by making society more humanitarian and less male oriented. Women infuse a more a compassionate and supportive role in relationships. Men tend to be a more business or task oriented. This transition has been going on for years, of course, but should reach a turning point as women surpass men as the primary household breadwinners.

Expect some male resistance to this re-balancing of leadership. Men have a long history of feeling dominant over women in the working world as evidenced by the existing wage gap and glass ceiling . Men have enjoyed a social culture that has rewarded them first. But, all cultures evolve based on survival needs and better social equality and understanding. This evolution is based on the practical needs of survival for the family unit.

As this male resistance occurs, women can explain that this change increases the security of the family unit financially and socially. Also, the male can now improve their relationships with their children and form a deeper bonds with increased time at home. To counter any resistance, men are more likely to enjoy domestic life with a little encouragement from you. You simply explain the benefits: no getting up early, no fighting traffic, no boss watching over you, no social pecking order to fit into, and no constant anxiety to perform better. That’s a lot of benefits just by staying home!

This natural social evolution is a win for both genders. The woman can more easily achieve her occupational and financial dreams, but still be involved at home at key times. The man will realize his deeper needs for bonding and care-taking in general and feel more connected to his family. Men will adjust and embrace this reality, albeit, slowly. I expect our relationships with our partner will improve since equality is a better balance for cooperation and stability going forward. L.. Johnson   More at: www.creativeretirementforwomen.com

(1)http://cnsnews.com/sites/default/files/documents/DEGREES%20EARNED%20BY%20LEVEL%20AND%20SEX.pdf                                                                                                                                       Photo: UNE photos on flickr(CC by 2.0)

TRAITS OF A LONG & HAPPY RELATIONSHIP

Do you want to know the secret of a long and happy relationship? There is an excellent study of adult development that examined people continuously for six to eight decades.  This Aging Well(1)study focused on three groups. First is sample of 268 socially advantaged Harvard grads born around 1920. The second group is 456 inner city men born around 1930. The third group is 682 middle-class intellectually gifted women born around 1910. The study involved eight initial in-depth psychiatric interviews to establish a baseline. The follow-up study involved interviews with them, their parents and teachers to get more objective information. Most of subjects were then followed continuously until they passed away.

I won’t bore you with all the statistics, but the task of generativity was the best predictor of an enduring and happy marriage in old age. Generativity is basically how involved we have been as parents. We generate and raise our children with a varying degree of involvement. The top four traits from the study for a long and happy marriage are generativity, commitment, tolerance and humor.

Generativity is a measure of our caretaker abilities extended into the adult relationship. The skills we use in child rearing certainly include dedicated care-taking, especially when children are young. We make a long-term commitment to our children as a matter of course, and we all know how much tolerance we need when they become adolescents. Humor is a good coping mechanism that helps relieve stress and lighten the intensity of the situation.

Good care-taking starts with an attitude of embracing the importance of relationships in general. Those who had a positive and supportive role model from their parents tend to emulate those behaviors when they become parents. But, those who did not develop basic trust with their primary caretaker tend not to be good caretakers themselves.

Relationship skills learned in childhood are usually transferred to marriage and other emotional relationships as well. The study may suggest that if your partner was not involved with child-rearing, did not bond in childhood, or is not involved in a care-taking role at work, he may not be involved with the care-taking demands of your relationship going forward.

If you do have a partner who wavers on these skills and you want to keep the relationship intact, you might consider adding care-taker development goals. These skills can be learned, of course, as long as there is motivation. If you are single and content to stay that way, you probably want your most reliable friends to have these skills.               

L.  Johnson of www.creativeretirementforwomen.com

(1) Vaillant, G. “Aging Well” New York: Little, Brown & Co. 2002. p.113, 123.

Do Women Need a Female Financial Advisor?

Do Women Need a Female Financial Advisor?

Would it surprise you if I told you that women are better money managers than men? It starts with a different relationship with money. Women do not view money as the ultimate goal, tend not to flaunt it with objects that are symbolic of success, and don’t involve it in their identity to the extent as men. Becoming a millionaire is usually not the final accomplishment and stopping point for women. Instead, money is a tool that enables women to enjoy the benefits and freedoms of life.

As a stockbroker, it became clear to me that women are more careful and thoughtful about risking their money. They are not trying to hit a home run in the market, but look for stability and safety in an investment. “How safe is this,” was the most common question and should be asked at every turn. So, most women tend to have a similar relationship with money.

Since men just view money differently, their risker mind-set interferes with the core money relationship women have. But, what bothered me the most about being a stockbroker, is that women were treated differently and even inferior by other men. It was not uncommon to see a male broker talk to only the man when a couple came in for advice. I understand that it is a male dominated field, but there is no excuse for this behavior.

In retirement, low risk investing is not only practical, its essential because you don’t have time to start over. A study(1) found that female hedge fund managers out-preformed men by 6% over a nine-month period in 2012. A hedge fund, originally named to hedge against market losses, has evolved. Now it is a managed fund(not indexed) that is less regulated in terms of using leverage. Using leverage dramatically increases investor risk.

This study points out four primary differences. 1. Women are less competitive and less preoccupied with beating an index. 2. Women take fewer risks in the market as with other areas of life. 3. Women do more homework and stay in investments longer. 4. Women realize they are not in control. Realizing you are not in control of all factors gives women the perspective to not panic. Level heads will prevail.

So, women need a female financial advisor because:

1. Your relationship or how you view money is similar on an emotional level.
2. Safety and sustainability of your money is the priority, especially in retirement.
3. Female advisors tend to establish a more personal relationship with clients.
4. Women, with the same experience as men, are better investors on average.
5. There is a deeper sense of trust with another woman.

More at:       www.creativeretirementforwomen.com

(1) Sightings, T. (1-7-14) “4 ways women make better investors” money.msn.com. Retrieved on 2-28-14 from: money.msn.com/how-to-invest/4-ways-women-make-better-investor