Month: January 2017

This month, Easin’ Along is focused on our approach to improving our health and well being as we pursue an active lifestyle in our retirement. As a supplement to that effort, I thought it might be an opportune time to include a few articles related to the pursuit of better financial health as well. I offer these articles not as recommendations, but as options to consider.

This post was written by guest blogger Lingke Wang. Lingke is the Co-Founder of Ovid Corp., a life settlement exchange where consumers can sell their life insurance policies through an auction to institutional investors. He believes in helping consumers to understand all of their financial options so they can make the most out of their hard-earned dollars. You can learn more about Ovid at www.ovidlife.com.

Helping Seniors Fund Retirement with Life Settlements

Many people with permanent (whole or universal) life insurance policies believe they must choose between surrendering or lapsing a policy. The policyholder gets to keep any accrued cash value on a permanent life insurance policy, but they may not realize that there is a third and possibly much more lucrative option.

Reputable companies offer seniors who don’t need their permanent life insurance policies a chance to do the things they’ve always dreamed of

 

For many people, accessing the cash value of a life insurance policy makes perfect sense after they’ve raised their family and no longer need to replace future income upon death.

Permanent life insurance policy holders are allowed to surrender their policy any time, but people who have this type of insurance are often unaware that they may get more money from a life settlement.

Is it safe to seek a life settlement?

 

Selling a life insurance policy to an investor for a percentage of its value is an option that many seniors choose. The industry is now highly regulated and much safer for consumers than it was decades ago.

Policy holders are entitled to receive comprehensive consumer disclosures in most states. This includes the risks related to government assistance eligibility and taxation. Most states require life settlement companies to obey federal and state privacy laws. Life settlement firms also must submit their anti-fraud plans to the states where they operate.

Life settlement transactions are now some of the most regulated and transparent in the entire insurance industry. In fact, according to LISA, 42 states are now protected by life settlement regulations. This includes covers 90% of the US population.

As life settlements become more popular, individual states are beginning to recognize the need to protect their residents. Their efforts to make life settlements a safe option have effectively overhauled the industry. Since January of 2012, there have been only two nationally reported complaints that involved settlements.

Surprisingly, the newest legislation enacted aims to protect people from their insurance companies – when they have to choose whether or not to lapse or surrender a permanent life insurance policy.

Life settlements decrease profits for insurance companies. Because choosing a life settlement can be much more financially rewarding to policy holders than simply accessing the cash value of the policy from the insurance company, some states have recently created laws that require insurance companies to inform their customers that life settlement is an option to consider. 

How can a life settlement help?

 

Many people in retirement or on the cusp of a life changing event wish they had more money; a bigger nest egg, a larger traveling fund, extra money for health care, or a more substantial financial cushion as a fall-back for starting a new business venture. While it’s true that the longer a policy has been in force and active, the larger the pay out at surrender, it’s also true that in many cases the policy holder will be much better off financially if they seek a life settlement with a reputable company.

Most policy holders haven’t thought about their life insurance as anything other than a means by which to provide for their loved ones in the future. New laws recognize that permanent life insurance is so much more versatile with life settlements as an option.

Easin’ Along is grateful to Ovid Corporation for providing this information to our readers.

 

This is the third article in a series on the steps we are taking to improve our health in order to participate in and maintain an active lifestyle as we make that slow walk through our Golden Years.

Two weeks ago we discussed weight loss as I began the Nutrisystem program in an attempt to lose an unwanted twenty pounds.  While the first week was not fun, the discipline required to stick to the program has not been an issue for me. Now, near the end of the third week, I am down fifteen pounds, and have almost reached my goal. Learning to eat smaller, more frequent meals has been very beneficial to the process.

Last week I made the point that exercise, in one form or another, has always been a constant in my life and will be as long as I am able to move at least one body part. Therefore, with two of the elements of my approach to better health practices now  underway, I am turning my attention to improving my sleep habits. Of all of the elements necessary to maintain good health and an active lifestyle, sleep is the one I struggle with the most.

I am very envious of those who have the ability to fall asleep on demand. Helen (adorable wife) is one of those. She can lie down and be asleep in less than five minutes. Moreover, I’m convinced that she could remain asleep through a category five hurricane. Not so with me, and it has been this way for most of my adult life. I trace this condition back to two sources.

First, once I graduated college, I have never been in a position where I was permitted to sleep late. I entered the Army where I usually had to be on duty by 6:00 am at the latest.  Admittedly, I was young; I was in in good physical condition and didn’t think much about it at the time, but an “early to rise” habit was being formed.

After I left active duty and entered the construction business, I was always on the job by 7: 00 am on six (and sometimes seven) days a week for the next thirty years or more. By the time I retired, a habit had been set in stone and waking up at 5 or 5:30 was the norm regardless of what time I went to bed—and I’m rarely sleepy before 11:00 pm.

Another very relevant factor in my sleep habits is that I was diagnosed with sleep apnea about fifteen years ago. I really didn’t need the diagnosis. I knew that I had issues from the time I was in my teens and shared a room with my brother who would wake me in the middle of the night with the hope that my loud snoring would cease. On occasion, Helen would do the same, but thankfully, as described above, she was able to endure the noise. Finally, after a series of episodes where I found myself sitting erect in the bed and gasping for breath, I decided it was time for a sleep study. The sleep analyst who monitored the study determined that I was waking up sixty times an hour and suffered from severe sleep apnea. I was a stroke waiting to happen.

I now wear a mask connected to a CPAP device which is a small compressor that forces air in to my nasal passages and enables me to breathe more easily. To Helen’s great delight (and to anyone forced to share a room with me) my snoring has been eliminated entirely. The immediate result was that quality of my sleep greatly improved and I finally felt more rested. Nevertheless, the mask can be uncomfortable.  At times I will wake up in at around 3:00 am and, with four good hours of sleep accomplished and a somewhat bulky mask on my face to deal with, I will just lay there until 5:00 rolls around and give up.

This week, the National Sleep Foundation issued a statement that outlined their definition of a good night’s sleep. Noted first was the strong recommendation that an individual age 65 and older sleep seven to eight hours per night. It further stated (without elaborating) that five to six hours “may” be appropriate. Hopefully I’m appropriate. This amount of sleep assists with mood, alertness, decision making and the avoidance of many health issues. It also promotes weight loss through the production of leptin, a hormone which signals your body to eat less.

The other noteworthy item on this list was that people who take longer than 41 minutes to fall back to sleep after waking up, may have a problem. We have a problem…

So, with the problem is outlined, what is the approach to finding a solution going forward?

Frankly, I don’t have an answer to the waking up at 3:00 am situation. The problem is vexing to be sure and I would love to have suggestions from Easin’ Along readers as to a remedy.  I especially invite readers who have overcome sleep issues to share their success stories.  At the same time, if there are readers who have an issue of their own and would like suggestion for solutions, feel free to comment below. I would love to create a forum on this topic.

In the meantime, I plan to follow the basics of better sleep that most have read in search of help with this problem. Listed below are a few of them here that I obtained from WebMD:

• Shut down your computer, cell phone, and TV at least an hour before you hit the sack.
• Save your bedroom for sleep and intimacy. Think relaxation and release, rather than work or entertainment.
• Create a bedtime ritual. It’s not the time to tackle big issues. Instead, take a warm bath, meditate, or read.
• Stick to a schedule, waking up and retiring at the same times every day, even on weekends.
• Watch what and when you eat. Avoid eating heavy meals and alcohol close to bedtime, which may cause heartburn and make it hard to fall asleep and steer clear of soda, tea, coffee, and chocolate after 2 p.m. Caffeine can stay in your system for 5 to 6 hours.
• Turn out the lights. Darkness cues your body to release the natural sleep hormone melatonin, while light suppresses it.

When I retired I made a vow that one of the first things I would do is turn off the alarm clock. Looking back, it may be that an alarm clock was never needed in the first place.

At any rate, we’re going to work on the problem in our quest for better health.  Good health leads to happiness, and happiness is what we’re all about as we continue Easin’ Along.

This month, Easin’ Along is focused on our approach to improving our health and well being as we pursue an active lifestyle in our retirement. As a supplement to that effort, I thought it might be an opportune time to include a few articles related to the pursuit of better financial health as well. I offer these articles not as recommendations, but as options to consider.

A few weeks ago, I asked Bob Lowry, creator of the very informative website A Satisfying Retirement to scan his archives and see if he could find an article or two that Easin’ Along readers might enjoy. One of the articles sent to me related well to the topic of financial health and I offer it in the paragraphs below.  I think you will find it interesting.

I have written posts about high school reunions, even though I have never been to one. Now I’m writing about retirement and a mortgage, even though I don’t have one. Either I love showing off my ignorance or I am fearless. Maybe it is a combination of both. After all, a satisfying retirement is sometimes a walk on the wild side.

Even so the subject is important. Retirement brings its own unique set of concerns and decisions. Near the top of many lists is a decision about housing. Is it best to pay off the mortgage before retirement, or is that extra money better off being invested? If I pay off the house won’t I lose a major tax deduction? But, what if I have a major health expense and can’t pay the mortgage..could I end up retired and homeless?

Good questions with no clear cut answers. But, they are worth asking and examining some of the ramifications. As an obvious disclaimer, I am not a tax expert or a financial guru, so what I offer is opinion and some basic thoughts from my own research. Please think through your own situation carefully, consult a trusted adviser, and proceed with caution.

If you do a Google search about retirement and mortgages the majority of the sites and articles that rise to the top suggest paying off your home loan before retirement. They do admit that many people can’t do that, but it should be a goal.

 The reasons most often cited to pay off your mortgage:

1. Peace of mind. Even without a monthly payment you still have real estate taxes, HOA fees, maintenance, repairs and upgrades. But, if you delay fixing a leaking toilet for two months you won’t risk losing your home. That big monthly Must Paybill is gone.

2. Home equity is available. I strongly suggest this source of cash be used only for major repairs and upgrades to your property or something like a large medical expense. Home equity is not a piggy bank so you can take a 12 day cruise to Hawaii or buy a new truck. Too many people got stuck when they spent their home equity only to find the worth of the house dropped below the size of the loan. But, with home equity lines of credit charging low interest rates at the moment,  smart use can save you thousands in interest over more conventional loans.

3. You have more freedom to relocate or resize. Get in trouble with your mortgage and someone else might tell you when to move. Have no mortgage and you can decide when to downsize or move closer to the kids….or stay put.

4. You have a large source of retirement money available. If you move to a smaller home or condo or even rent an apartment, any profits after the house sale and purchase are yours. Though expensive and sometimes risky, reverse mortgages can provide a steady income from the equity you have in your residence too.

 

On the other side of the argument, these points are made:

1. Don’t pull money from other investments to pay off a cheap mortgage. Even losing the tax deduction of a mortgage may not be enough to make up for better performing investments. If you take a chunk of your retirement funds to pay off a mortgage the money left will not produce as much income or growth.

2. Tying up too much of your net worth in an illiquid asset. You own a $300,000 home free and clear. But, depending on the market conditions it might take you 6-9 months or more to be able to sell the house and see any net profits. If you need quick cash a house is not the place to find it (except through a home equity loan which comes with its own risks).

3. If you have a low mortgage rate can you earn more in investments? Then, use your cash to grow your nest egg. Depending on your investment strategy and resources, it is not too hard to get a rather safe return of 5% on your money. With a mortgage of under 4% are you willing to throw away that 1% of growth year and year?

 

Another consideration lies in what your plans are when you decide to move. For example, my wife and I plan on moving from our current home in four or five years. Housing prices have been rising in our area for 15 months in a row so the future is looking brighter. 

We know that at some point we want to move into a continuing care community (CCC). The “buy-in” will be somewhere around $250,000. If we own a home or condo and need to move rather quickly into the CCC because of health issues, our buy-in money will be unavailable until we sell. That may be too late.

So, we are giving serious thought to renting an apartment/town home when we move from our present home. The bulk of our profits from our current home will be invested for safe growth. While the yearly rent is lost in terms of equity or tax benefits, we will have liquidity when we are ready to move to the continuing care community. 

Again, I will remind you I am not a financial planner or expert. I have bumbled along pretty well for the past several decades, but there is always more to learn and consider. Since a home is generally the biggest expense for most of us in our lifetime, knowing what to do with that resource is vital.

Bob Lowry is an author and creator of the website A Satisfying Retirement. He and his wife Betty make their home in Arizona. Easin’ Along is grateful for this contribution.