Retirement
Living Guide for Senior Citizens
By Linda Richard & Darrell Richard
Copyright 2011 Linda Richard & Darrell Richard
ISBN 978-1-4507-8687-4
Smashwords
Edition, License Notes
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this author.
Our sincere thanks to Chris Richard and Pamela Stoddard for editing this text to bring you a concise guide for making your senior years the best of your life.
~~~
Introduction
Senior
Citizen Advantages
Chapter
1--Retirement
Plans
Location
Social
Security
Early
Retirement
Penalties
Full
Retirement Age
Spousal
Benefits
Supplemental
Security Income (SSI)
Chapter
2--Save Money
Live
on Less
Structured
Settlement
Reverse
Mortgage
Reduce
Your Mortgage
Homestead
Exemption
Private
Mortgage Insurance (PMI)
Pay
Bills
Timely
Payment
Increase
In Price
Discounts
Credit
Score
Coupons
and Specials
Income
Taxes
Food
Bills
Chapter
3--Senior Health Care
Medical
Care and Medicare
Chapter
4--Save Energy
Kitchen
Laundry
Living
Areas
Lighting
Chapter
6--Seniors and Safety
Phone
Calls, Personal Information and Scams
Online
Safety
Virus
Protection
Buying
Online
Internet
Safety
Shortened
URLs
Refunds
on Internet Purchases
Home
Security System
Emergencies
Health
Electrical
Outage
Outage
Special Needs
Chapter
7--Insurance
Homeowners
Insurance
Renters
Insurance
Automobile
Insurance
Chapter 8--Earn Money In Retirement
Chapter
9--Lawn and Garden
Lawn
Care
Flower
Beds
Selling
Plants and Flowers
Chapter
10--Learning and Work
Shopping
for Profit
Senior
Learning
~~~
Senior citizens see change at every turn. Social Security is a new adventure; even the federal and state income tax rules change for seniors. Things you have done for years suddenly have new rules that apply to the “over 65” group.
Grow old along
with me!
The best is yet to be,
The last of life, for which the
first was made
Robert Browning
You have spent your entire life preparing for retirement and the future. Your future is now.
Take advantage of being a senior citizen. Sleep late occasionally, work your own schedule, learn new things and accept benefits for seniors. This includes Social Security, a senior drink at McDonald’s and other food locations, and discounts at some business establishments. Even federal income taxes give seniors a break. You earned it, so use it.
~~~
Make plans for retirement and be able to enjoy some time with family and time off work. Social Security will not take care of all of your bills, and it is essential to make plans to supplement Social Security or have Social Security supplement your primary income or pension during retirement years. The Social Security Administration estimates that retirees need 70 to 80 percent of preretirement income, and that Social Security provides about 40 percent. At a minimum, you will need to match your Social Security income, but money is not the only consideration for making retirement plans.
Plan with or without relatives. Choose which relatives to involve in retirement planning. Leave retirement plans open and subject to change as circumstances change.
Be flexible for retirement. Adapt retirement plans to fall into place as work, health, and the health of a mate may change. Make changes to retirement plans to take care of issues important at this moment as well as in the future.
Pay off any debts. Plan for retirement by paying off any debt you may have, including credit card debt. Make large purchases like an automobile before retirement, and plan to live on less. The less debt you have, the less you can live on during retirement.
Make plans for retirement by paying for your home to eliminate house payments. Save items that will entertain you in retirement as well as items that you may sell if needed. Build your nest egg in ways other than cash on hand.
Do some calculations for retirement planning. Use the figures on the Social Security website to calculate how much money you will receive. Calculate any amounts your spouse may receive. Then calculate those items now taken out of your paycheck that you will need to pay in retirement, including health insurance and income taxes. Yes, you probably will have to pay income taxes on Social Security and other income during retirement years. We’ll talk about that later.
Using the last twelve months, calculate the amount it takes for your lifestyle for a month and for a year. Figure the difference in your Social Security monthly income, and determine where the difference can come from. If you have a 401k or 403b or savings account, see how many months this income will sustain your lifestyle.
These figures will help you decide when you can retire, where you can retire, and if you will need to work some to maintain your standard of living.
Make plans for retirement in preparation for the event. It may occur sooner than you think, or before you reach full retirement age, by chance or by choice. Be ready.
Your retirement location choice is one of the most significant decisions you make. If you have already chosen a location, be sure it is where you want to be for the rest of your life. If you purchased retirement property years ago, you may need to reconsider. You didn’t know then what you know now.
Choose a location with medical facilities nearby and make this your primary consideration. Look for a large hospital with facilities to get you there within five or ten minutes. Remote locations are not suitable for oldies. Your life depends on getting to the hospital quickly if you have a stroke or heart attack, and these are common issues with retirement-age people.
Locate near public transportation. Select a retirement area with public transportation and an airport. You may not need public transportation now or ever, but it is the kind of security you may need as you age.
Live close to someone you know. Find a retirement location close to at least one of your younger relatives or your children. You may need someone closer than you think and sooner than you think.
Buy less property or rent smaller quarters than you can afford. Purchase or rent retirement property that you can afford even in the worst of times. Taxes and insurance may continue to rise, and even if your property is paid for, the insurance and upkeep will not likely decrease. Some states freeze taxes at age 65, and if the property taxes are high, this may be a consideration.
Investigate the taxes in a state before you make a decision to move there, particularly if you want to purchase property. Property taxes vary radically from state to state, even states close to each other. As an example, Louisiana has low property taxes; Texas property taxes are high. Both states have high-priced property insurance. You can compare taxes at websites like the Retirement Living Information Center.
Consider carefully before choosing a "retirement community" for your retirement years. Retirement communities may be suitable for you while you are social, but you may feel left out when you no longer can play golf or tennis, or swim every day. Retirement communities often have high costs for homeowners' associations and even groceries are often more expensive.
Explore a smaller home. Downsizing is one of the ways the AARP recommends cutting costs. Realize that the upkeep and care for a home with significant property may get to be more than you can handle. A smaller home means less heating and cooling cost, less upkeep, and less overall expense as well as less physical work for you.
Choose a home with gas, if it is available in your area. An all-electric home limits your heating and cooling choices and the ability to stay home during an electrical outage.
Acknowledge the weather if you consider relocation. Cold climates will restrict your mobility and snow requires shoveling, chains, and days spent inside. Hot climates cost more for air conditioning, but will not restrict your activity as much as the colder weather.
Find a retirement location with activities you like. If you like the public library, make sure there is one close to your location or retirement area. If you like cultural events, choose a university town or large city for your retirement.
Look to the future. Consider your potential life in ten to twenty years and choose a retirement area or location based on your anticipated needs, not your current status. Ask your children what they think. They may be reluctant to give advice, but it is important to get their input and consider their feelings. Your children may be your best allies for the long term if you share your thoughts and plans with them.
Your Social Security retirement benefit amount depends on your work history over a lifetime. If you did not work outside the home, you may collect Social Security based on your spouse’s work history. Benefits calculations are complex, and the Social Security Administration indexes your earnings to present value, using the highest 35 years of earnings. If you do not have 35 years of work, the Social Security Administration uses zeros for the missing years. It bases all benefits on the primary insurance amount, or the amount of money you would receive at full retirement age. Full retirement age is 66 if you were born between 1943 and 1959, and 67 if you were born in 1960 or later.
If you choose to take retirement prior to your full retirement age, you do not receive full Social Security benefits. You receive about 75 percent of your full-retirement-age benefit if you retire at age 62. The percentage increases from age 62 to full retirement age for each month you do not retire, so that retirement at full retirement age gives you 100 percent of the calculated primary insurance amount. A disadvantage of taking early Social Security retirement benefits is the loss to your survivors if you die. Survivors receive monthly checks based on your early retirement benefit and not your full retirement benefit.
In addition to losing 25 percent of your Social Security benefits for early retirement, if you continue to work, you may lose even more benefits. The Social Security Administration imposes penalties on early retirees who continue to earn income. Income in excess of $14,160 in 2011 incurs a penalty of $1 for every $2 you earn in excess of the $14,160 limit. When you notify the Social Security Administration that you will earn in excess of $14,160, it withholds your monthly check to cover the penalties. If you do not notify Social Security, penalties apply once you file your federal income tax return and you disclose your income. The Social Security Administration imposes no penalties once you are full retirement age.
Social Security uses an actuary staff to calculate risk. Social Security actuaries calculate benefits over a lifetime and have determined that whether you take low benefits in early retirement or higher benefits at full retirement age, it all works out to about the same. Full retirement age benefits allow you to continue to work without penalty. You also get more money each month with full retirement benefits. You can choose to wait until you are 70 to collect Social Security benefits. You receive about 130 percent of your full retirement age benefits if you don’t start collecting benefits until age 70. The Social Security Administration adds no benefits after age 69, so there is no advantage to waiting past age 70 to collect benefits.
If you collect Social Security benefits based on the work history of a spouse, you receive 50 percent of the spouse’s benefit when you reach full retirement age if you have not filed for early Social Security benefits. You can collect spousal benefits as early as age 62, but the Social Security Administration reduces your benefits to about 35 percent of the spouse’s full retirement age benefit. If your spouse dies, you can collect 100 percent of the spouse’s benefits when you reach full retirement age.
Supplemental Security Income (SSI)
If your Social Security payments are not as much as SSI, you may qualify for both. The Social Security Administration operates the SSI program for individuals who are blind, disabled or over age 65 who qualify with low income and few resources. Your house and furnishings do not count, but assets that count cannot be more than about $2,000. This includes bank accounts, stocks and bonds, investments and other resources that are “extra” or not essential to living or earning.
The federal SSI benefit in 2011 is $674 a month. Some states supplement that amount with an additional payment each month. If you receive Social Security benefits that are less than the $674 and you otherwise qualify for SSI, you will receive a total of $694 with both benefits. This is because Social Security offsets SSI with unearned income, but $20 is exempt from offset.
Qualifying for SSI in all states but California gives you access to the supplemental nutrition assistance program, or food stamps. The SNAP program operates through the USDA and the states, providing cash each month on a debit card that you can use at the grocery store. You may qualify for federally subsidized housing as well.
Where Social Security ties to Medicare, SSI ties to Medicaid and assistance for payment of Medicare premiums and co-payments. If you receive both Social Security and SSI benefits, you may have more medical options as well. States have different programs available for prescription purchases, doctor visits and diagnostic tests.