Kevin Kroskey's Money & Mind

Why are they made again and again ? There are some classic financial missteps that plague retirees. Calling them “mistakes” may be a bit harsh, as not all of them represent errors in judgment. Yet whether they result from ignorance or fate, we need to be aware of them as we plan for and enter retirement.           Not maximizing Social Security. The full retirement age for many baby boomers is 66. As Social Security benefits rise about 8% for every year you delay receiving them, waiting a few years to apply for benefits can position you for greater retirement income. Married couples have even more options. 1 Roughly 40% of us retire earlier than we want to; about half of us apply for Social Security before full retirement age. Still, any way that you can postpone applying for benefits will leave you with more SSI. 1        Underestimating medical expenses. Fidelity Investments says that the typical couple ...

By now, you've seen the final medal count at the London Olympics, and no doubt felt a stirring of national pride.   American athletes took home 104 total gold, silver and bronze medals, comfortably ahead of China (87), Russia (82), Great Britain (65), Germany (44), Japan (38), Australia (35), France (34), South Korea (28) and Italy (28).   Does that mean that we Americans--so often accused of being a nation of couch potatoes--are the most athletic people in the world?   Total medal count is one way to measure, but it may not be the best.   Another measurement would take into account the relative number of medals compared to a country's total population: Olympic medals per capita, or (to avoid many decimal places) the number of medals each nation took home per million people in its population. Medals per million gives us a very different ranking.   By this measure, citizens of the Caribbean island of Granada are by far the most athletic, with 9.5 Ol...

It's quite normal that parent's desire to pay for college expenses for their children. However, doing so often is a competing objective against becoming financially independent and funding one's retirement. Emotions aside, remember there's only one chance at retirement, but your children will still have a lifetime of opportunity whether you pay for all, part, or none of their college. Christine Benz from Morningstar recently wrote on the topic, saying: "But by multitasking as so many parents do--saving for college and their own retirement at the same time--they run the risk of coming up light on the retirement front with no way to make up for the shortfall, except for working longer. The old saying about this topic is dead-on: Your child can get a loan to pay for his or her college education, but no one will give you a loan to pay for retirement if it turns out you haven't saved enough. Given increasing rates of longevity, rising health-care costs, a...

After you turn 70½, the IRS requires you to withdraw some of the money in your retirement savings accounts each year. These withdrawals are officially called Required Minimum Distributions (RMDs). While you never have to make withdrawals from a Roth IRA, you must take annual RMDs from traditional, SEP and SIMPLE IRAs, pension and profit-sharing plans and 401(k), 403(b) and 457 retirement plans annually past a certain age. If you don’t, severe financial penalties may be enforced. If you are still working as an employee at age 70½ , you don’t have to take RMDs from a profit-sharing plan, a pension plan, or a 401(k), 403(b) or 457 plan. Your initial RMDs from these accounts will only be required after you retire. However, you must take RMDs from these types of accounts if you own 5% or more of a business sponsoring such a retirement plan. 1 You must take RMDs from IRAs after you turn 70½ regardless of whether you are still working or not. The annual deadline is December...

I saw an interesting article in the US Today about how and how much parents help their young adult children. There's some interesting financial planning implications found in the article. Perhaps what was most interesting is that children of parents who pay for all college expenses engage in the most 'risk behaviors.' Doesn't hurt and may actually help to have some skin in the game. Full article is below. Best Regards, Kevin Kroskey ---------------- Parents Play Favorites When Helping Adult Kids Out SAN FRANCISCO – More than 60% of today's young adults have received financial help from their parents — and those described as having more agreeable personalities as children get more money than others, finds a study to be presented today at a meeting of the Population Association of America.Among the 62% of young adults getting parents' help, the average amount was $12,185, says lead author Patrick Wightman of the University of Michigan-Ann Arbor. Abou...

Good, short, and relevant article for many from the October 2011 edition of Money Magazine on the topic. Enjoy. --- More than half of Americans say they plan to work in retirement, according to a survey by the Transamerica Center for Retirement Studies.  Start your search with these organizations. WWW.ENCORE.ORG Run by think tank Civic Ventures, this website connects people 50 and older to post-retirement jobs with social purpose, mainly in education, government, and the nonprofit world.  You can also search the site for career resources in your area. WWW.RETIREDBRAINS.COM This site for older workers and retirees connects job seekers with recruiters and employers looking for seasoned staff. WWW.GRAYHAIRMANAGEMENT.COM This organization specializes in helping executives and senior managers find part-time and contract work. WWW.RESERVEINC.ORG Currently operating in the New York City area, Miami, and Baltimore, ReServe matches professionals 55 and older with jo...

Unfortunately for consumers, the financial advice profession is clear as mud. The large Wall Street firms aim to keep it this way with their deep pockets and lobbying efforts, because less transparency equates to greater profits. Ultimately, consumers want advice but are often simply sold product. Watch the video below for a short and amusing analogy of the issue and to gain greater clarity. - Kevin Kroskey, CFP, MBA