Retirement Blog May 2007

May 22, 2007, Rollaboard

A rollaboard meets so many travel needs! Learn why it's perfect for retired travelers.

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May 15, 2007, Timeshare

A timeshare offers a purchaser or renter the option of owning a piece of the dream. Is this vacation style for you? What are the pros and cons of spending your money to share property?

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May 13, 2007, Philippines Calling Home Its Sons and Daughters

Filipinos who take jobs abroad usually maintain close ties to relatives at home. The government of the Philippines, in partnership with private companies, plans to create retirement villas targeted at expatriates who want to return home to retire.

The first of these opened recently in Batangas.

Foreign nationals are also welcome to make the Philippines their new home.


May 13, 2007, Women's Retirement Security Act

Washington, D.C., (May 4, 2007) -- The American Council of Life Insurers (ACLI) applauds Sens. Gordon Smith, (R-OR) and Kent Conrad, (D-ND) for introducing on May 3 legislation addressing many of the nation’s retirement security questions.

Among many things, S. 1288, the Women’s Retirement Security Act of 2007 would make it easier for millions of women approaching retirement to assure their lifetime financial security.

The measure would create incentives to convert a portion of retirement savings into an annuity that guarantees a steady stream of income for life. In addition, the legislation would encourage people to include longevity insurance – a life annuity that begins payment at the end of a policyholder’s life expectancy - as part of their retirement savings planning.

ACLI President and CEO Frank Keating said the bill, if enacted, will help address the unique issues facing women and retirement.

“Women would especially benefit from receiving guaranteed lifetime income in retirement because they typically live longer than men,” Keating said.

“Moreover, women tend to have fewer years than men in the full-time workforce, interrupting their careers to serve as caregivers to children and aging parents. As a result, they are particularly at risk of outliving their retirement assets if they fail to manage them well,” he said.

By creating incentives for women – as well as for men -- to secure a lifetime income stream, S. 1288 would help reduce that risk of outliving retirement assets. These incentives would apply to assets annuitized from both “tax-qualified plans,” such as 401(k)s and IRAs, and personal “nonqualified” savings held outside an employer-sponsored plan or IRA.

Under the bill, half of lifetime annuity payouts generated from nonqualified contracts would be tax free, up to $20,000. Ten percent of lifetime annuity payouts generated from qualified contracts would be tax free, up to $2,000 annually, under the measure. The reason for the difference: money invested in tax-qualified plans already receives special tax treatment, reducing the taxable income of the contributors. Meanwhile, nontax qualified plans are funded with after-tax dollars and need a greater incentive in order to receive roughly the equivalent tax benefit.

Another way to assure lifetime income is longevity insurance, which is a life annuity that begins payment at the end of a person’s life expectancy, such as age 85. Longevity insurance has no cash surrender value and a very limited death benefit prior to the time the payments begin.

S. 1288 encourages people to consider purchasing this type of financial protection using 401(k) or individual retirement account funds. It ensures that the value of longevity insurance would be disregarded when applying the required minimum distribution rules at age 70 ½ to assets held in tax-qualified plans. This treatment would apply until the date the longevity insurance payments begin.


May 13, 2007, British Columbia to Ban Mandatory Retirement

The British Columbia legislature introduced a bill to ban mandatory retirement in the province even though retirement at 65 has not been required by law. The new law will come into effect January 2008.

Although there is no legal requirement to retire in British Columbia, the Human Rights Code defines age as 19 to 65, leaving those outside that range unprotected.

Culturally, there is an expectation that people will retire at 65.

The government's move to give people the right to continue working follows a trend across the world and seems to me to meet address two concerns.

  1. Seniors have better health and longer projected lifespans than those of preceding generations. With so much time ahead of us and with health and energy on our side, many of us truly want to continue to work.
  2. An impending labor shortage looms large on the horizon. Frankly, society needs us to keep on working.
I'm all for choice. A small worry is building in the back of my brain. . .

How long before the choice not to retire becomes no choice to retire?

I believe this is one to watch, and you can be sure I'll be watching and reporting.


May 9, 2007, Where To Retire: Stay Home Or Move?

Deciding where to retire ranks as one of the biggest issues retirees face. Stay or go? What factors influence the decision? Use a handy free decision-making tool to sort out your issues.

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May 8, 2007, About Audrey

All about Audrey. Why she's retiring and why she made this Web site.

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