Your Complete Guide to Retiring Alone

Saving for retirement involves lots of planning and calculations for every adult; however, if you are not married and don’t have children, you’ll need special strategies for retirement saving and planning.

If you are anticipating a single retirement, you are not alone. According to the U.S. Census, approximately half of all American adults are married. In addition, close to one-third of baby boomers don’t have children. Others may age alone due to the death of a spouse, a divorce or estranged or unavailable children.

Here’s what you need to know about retiring alone:

Create your own support system

One of the greatest challenges of retiring alone is not having a built-in support system through a spouse and children. Isolation and feelings of loneliness can be one of the strongest factors in early aging and general unwellness, so it’s a good idea to build your own support system if you’re planning on retiring single. This can take the form of a close group of friends who live near your home and are happy to join you for fun outings or occasional errands. If you don’t have this group of friends, make new ones by attending local social events through Meetup.com, befriending your neighbors in your community, or spending time at a senior center for active adults.

Identity your most trusted friend

It’s a good idea to choose one friend to serve as your emergency contact and to make decisions on your behalf in case you become incapacitated for any reason. Failure to appoint this person can mean decisions about your health and welfare can be relegated to your closest living relative, which may be someone with whom you have no relationship at all.

Choose your trusted contact and draw up a medical power of attorney so they can make decisions for you if the need arises. Save this person’s contact info in your phone, titled “In Case of Emergency,” or “ICE”, so someone can easily find this number in your contacts should the need arise.

Get creative about your housing options

When looking for a place to retire alone, there are loads of options to consider:

Move abroad to a country with a low cost of living where you can check out the sights, get to know the culture, and experiment with the cuisine.
Team up with a friend or two for built-in companionship and shared living expenses.
Choose a retirement community with senior-friendly amenities and walkable conveniences.

Consider long-term care insurance

Did you know that most adults turning age 65 will need long-term care at some point in their lives?

Long-term care can be expensive. As a single retiree, you’ll likely feel more secure knowing you have coverage for a long-term care facility or at-home care should the need arise. A long-term care policy may not be cheap, but may be worth the security it brings you.

Know your Social Security claiming options

If you have never been married, or have never had a marriage that lasted 10 years or more, your Social Security claiming options are simple. You are likely best waiting until age 70 to claim, unless you believe your life expectancy will be shorter than average. If you do claim your benefits before reaching full retirement age, and you continue working, make sure your income does not exceed the Social Security earnings limit at the time, or you may end up owing money.

If you have a previous marriage that lasted 10 years or longer, you may be able to claim a spousal benefit based on your ex’s earnings record and switch over to your own benefit amount when you reach full retirement age. If your spouse is deceased, you may be eligible for a widow/widower benefit based on your late partner’s earnings record.

Be sure to review your options carefully before making your choice.

A single retirement may look a bit different than a retirement shared with a life partner, but by planning ahead and following the tips outlined above, these can be the best years of your life.

Your Turn: Are you planning for a single retirement? Share your best tips and ideas with us in the comments.

Learn More:
snugsafe.com
kiplinger.com
forbes.com
thebalance.com

All You Need to Know About Share Certificates

No one wants to play around with their savings. Whether you’ve just received a lump sum through a work bonus, inheritance or other unexpected windfall, or you’ve been saving for a while until you’ve built a sizeable nest egg, you likely want to park your savings in a place that offers your money its biggest chance at growth without risking a loss.

Lucky for you, as a member of Advantage One Credit Union, you have access to an abundance of secure options for your savings, including savings accounts, [and] money market accounts, [health savings accounts, holiday clubs and vacation clubs].

Another excellent option we offer our members to help their savings grow is our share certificates. Sometimes known as savings certificates, and referred to by banks as CDs, these unique accounts blend higher growth potential of a stock investment with the security of a typical savings account.

Let’s take a closer look at this savings product and why it might be the perfect choice for you.

What is a share certificate?

A share certificate is a [federally] insured savings account with a fixed dividend rate and a fixed date of maturity. The dividend rates of these accounts tend to be higher than those on savings accounts and there is generally no monthly fee to keep the certificate open.

Aside from the higher dividend rate, share certificates differ from savings accounts in the more limited accessibility of the funds within the account. A typical certificate will not allow you to add any money to the certificate after you’ve made your initial deposit. You also won’t be able to withdraw your funds before the maturity date without paying a penalty. [However, at Advantage One Credit Union, we do offer more flexible options than the typical share certificate].

Terms and conditions of certificates

You’ll need to meet some basic requirements before you can open a certificate including a minimum opening balance and a commitment to keep your money in the account for a set amount of time.

The minimum amount of funds you’ll need to deposit to open a certificate will vary in each financial institution. It also depends upon the term you choose. Some institutions will accept an initial deposit as low as $50 for a certificate. Others, such as a “jumbo” certificate, will require an opening balance of $100,000 or more. In general, the more money you invest in a certificate, the higher rate of interest it will earn. At Advantage One Credit Union, you can open a certificate with as little as [$X] at an Annual Percentage Yield (APY) of [X%].

Certificate term lengths also vary among financial institutions, with most offering a choice of certificates that run from three months to five years. Typically, certificates with longer maturity terms will earn a higher rate. Here at Advantage One Credit Union, we offer our members certificates that can be opened for just [X] months or as long as [X] years. Our dividend rates start at [X%APY*] for short-term certificates, and going up to [X%APY*] for our long-term options.

Is a share certificate for everyone?

While keeping your savings in a certificate can be an excellent option for your money, it is not for everyone. Before you move forward with opening a certificate, be sure you won’t need to access the funds before the certificate’s maturity date. It’s best to have a separate emergency fund set aside to help you through an unexpected expense.

Why keep your money in a certificate?

Here are some of the reasons people choose to open a certificate:

  • Low risk. With each Advantage One Credit Union certificate insured by [the National Credit Union Administration] up to $250,000 [and independently insured up to $XXXX by XXXX], you can rest easy, knowing your money is completely secure.
  • Higher dividend rates. Certificates offer all the security of savings accounts with higher yields.
  • Locked-in rates. There’s no stressing over fluctuating national interest rates with a certificate. The APY is set when you open the account and is locked in until its maturity date. This means you can calculate exactly how much interest your money will earn over the life of the certificate the day you open it.

If a certificate sounds like the perfect choice for you, stop by Advantage One Credit Union today to learn more. We’re committed to giving your money its best chance at growth.

* APY=Annual Percentage rate and rates are current as of [XX/XX/XXXX].

Your Turn: Have you chosen to keep your savings in a share certificate? Tell us why you chose this option in the comments.

Learn More:
investopedia.com
thebalance.com
businessinsider.com

Guide to Investing in Your 20s

The ages between 20 and 29 are the best time to begin investing your money

It’s true that millennialsInvest_Featured have a tendency to want to put their money toward anything instead of socking it away — from clothing to concerts to a night out. In fact, only 28 percent of millennials believe that long-term investing is an important path to success, compared to 52 percent of non-millennials, according to a UBS report. But the truth is, your 20s might be the best time to begin investing money.

“The sooner you start saving and investing, the easier it is on your budget,” says Carrie Schwab-Pomerantz, president of the Charles Schwab Foundation. “The sooner you start, the less you have to save because you have time on your side.” That’s because money invested throughout your 20s will continue to gain interest. Think of it this way: Investing a mere dollar at age 25 could be more than five times as valuable as doing so at age 45.

So how can you start investing? It might be easier than you think. Take these first steps and you’ll be on your way to meet your retirement goals:

Evaluate your current financial situation. It’s important to not jump right into investing if you can’t afford to do so — that won’t help anybody.

“If you don’t have at least three to six months’ [income] in a cash reserve account, I don’t think you should start investing,” says Dominique Broadway, a financial planner, personal finance coach and founder of Finances De×mys×ti×fied and the Social Money Tour. “You don’t want to lose your cash cushion or emergency fund.” So if that’s the case, save up a reserve and then take on investing.

Put away 10 percent of each paycheck. Or as much as you can. The key here isn’t so much about what amount to put away but rather understanding to do it now, because time is on your side. Even if you’re just setting aside 5 percent of each paycheck, the amount, over time, will blossom into a good-sized amount in retirement.

“Building habits, especially in your 20s, is so important for long-term success,” says John Deyeso, a certified financial planner.

Start a 401(k) or IRA. Many jobs offer a 401(k), and if yours does, you’ll definitely want to take advantage. A 401(k) allows employees to contribute a percentage of their paychecks tax free. Try to invest as much as you can into a 401(k), and take advantage of whatever your company will match. If you don’t have access to a 401(k), you can open an IRA. It’s important to open one of these accounts in your 20s. In your 30s, you can contribute twice as much and still not have as much as if you’d started in your 20s.

“Every $1,000 saved in your mid-20s grows to over $10,000 at retirement, assuming 6 percent growth every year. But waiting until your mid-30s means that same $1,000 will only grow to $6,000,” explains Shane Leonard, a chartered financial analyst and the CEO at Stockflare.

Don’t be afraid of risks. When you’re young, you can risk jumping at every opportunity and not having them work out, because it gives you more leeway for a reward later in life.

“You may need to take risks when you’re younger,” says Erin Baehr, author of “Growing Up and Saving Up.” “You may take one job over another and find it doesn’t work out. But when you’re younger, you have the ability to do that. And then that can parlay into a bigger return down the road.”

Investing early should pay major dividends in the future. Stop by today and speak with one of our representatives to see your options.

Used with Permission. Published by IMN Bank Adviser Includes copyrighted material of IMakeNews, Inc. and its suppliers.