Ready to Start Adulting? 10 Steps to Retire the Right Way

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This story originally appeared on NewRetirement.

If you are in your 50s or 60s, you are probably hoping to find the fountain of youth. However, when you plan your golden years, it is best to retire like an adult.

The Merriam Webster dictionary has added “adult” as a verb — not just a noun: “To ‘adult’ is to behave like an adult, specifically to do the things — often mundane — that an adult is expected to do.”

Being an adult means being responsible, dependable, self-sufficient, and maybe even knowing when it is a good time to throw these rules out the window. Examples of “adulting” include: cleaning up after yourself, paying bills on time, and — we would like to add — planning your retirement.

Keep reading for 10 ways to know if you have a reliable plan to retire like an adult.

1. You Know How Much Retirement Income You Will Have

Young couple working on a budget
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It will do you no good to hide from the truth when it comes to your retirement income. You need to know how much you will have and from what sources.

How much will you get from Social Security? Do you have a pension? An annuity? Will you work part-time for any amount of time? And, crucially, how much will you need to withdraw from savings every month?

The NewRetirement Retirement Planner makes it easy to find out how much retirement income you will have every year. And, you can run different scenarios to determine the best retirement withdrawals strategy for your needs and values.

2. Your Retirement Expenses Remain Below Your Income

retiree senior woman holding money
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The most important rule of personal finance — spend less than you earn — applies to retirement as well. In fact, it is even more important than ever before. The risk you run of overspending is that you will actually run out of money.

The trick is that you actually need to make a good prediction and figure out exactly how much you will spend every year for the next 15 to 30 years.

3. Even Better? You Have Guaranteed Lifetime Income to Cover Basic Expenses

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Guaranteed lifetime income is income that you will receive for as long as you live — no matter how long that turns out to be. Social Security and most pensions are the most common examples of guaranteed lifetime income.

Many personal finance experts recommend that in retirement you have sufficient guaranteed lifetime income to cover your baseline retirement expenses — the money you need to spend to get by. Baseline spending includes housing, healthcare, and food.

To accomplish sufficient lifetime guaranteed income you have two choices:

  • Reduce your baseline expenditures to fall below the income you will have.
  • Increase your guaranteed lifetime income through the purchase of lifetime annuities or other strategies.

Try different scenarios in your retirement plan to figure out something that works for you.

4. You Have Paid Off Debt

Debt
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One of the greatest threats to retirement today may not be saving too little, but owing too much. A 2020 report from Experian found that baby boomers (those ages 57–74) are carrying a significant amount of debt into retirement.

The most adult way to handle debt is to pay it off before you quit working.

5. You Have Planned for Inflation

Inflation
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When you are working, your wages generally rise as the costs of goods and services increase. Your earnings “keep pace with inflation,” so normal inflation is not generally a big concern. However, when you are living off of savings, inflation literally robs you of income.

The good news is that Social Security and some pension programs (though decreasing in prevalence) adjust your income for inflation. The bad news is that if you are living in retirement by withdrawing from investments or savings, then the value of your money will dramatically decrease over time. You will require far more money to support your lifestyle in the future.

By definition, inflation is when the cost of goods and services increases across the board. Stock prices also rise with inflation for the same reason: As the price of the goods and services a company produces rises, so does that company’s revenue. As a company’s prospects (including revenue) develop and grow, its stock price also tends to rise. As such, stocks can end up serving as a hedge against inflation.

However, as we age, our tolerance for risk decreases. Hence safer investments (such as bonds) become more and more attractive. Reconciling these opposing forces in creating the right asset allocation for you is no easy feat, requiring an understanding of your personal risk tolerance and investment time horizon.

Financial advisers can help you navigate designing an asset allocation strategy that outruns inflation, while managing risk.

6. You Have a Plan for Other Potential Risks

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We can not predict the future. However, an adult retirement plan is one that mitigates the potential harmful financial effects of a long-term health event, a natural disaster, a car accident, a stock market crash, or some other unknowable future event.

Having the right insurance products and a dedicated emergency fund can protect you:

  • Be sure to evaluate your supplemental Medicare coverage every year.
  • Explore ways to cover a long-term care need.
  • Evaluate life, housing, and auto insurance needs.

7. You Evaluate Your Plans at Least Quarterly

couple improving their finances from home
Dean Drobot / Shutterstock.com

Retirement planning is not something you do once and then never think about again.

You need to maintain, update, and adjust your plans. It is a good idea to go through the details at least once a quarter and make updates as you and the economy change.

8. You Have a Responsible Plan for Investing Your Savings

Investing
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Retirement investing is not all about getting the highest return possible. A responsible retirement investment plan matches how and when you need to access the money with your need for growth and security.

It is possible to do this on your own. However, it can also be useful to work with a financial adviser who has deep expertise in stocks, bonds, and other potential financial vehicles.

9. You Have Developed an Estate Plan

estate plan
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Estate planning is a term broadly used to describe a variety of end-of-life planning issues. Your estate plan should include:

  • Opportunities to manipulate your assets for tax efficiency and maximum wealth for both you and your heirs
  • A detailed description of what you want to happen when you die — a plan for your internment and for the disbursement of your assets and property.
  • Instructions for what you would like to happen if you are living but cannot care for or make decisions for yourself

Explore the 11 documents you need for a reliable estate plan.

10. You Have a Dream and a Purpose

Young woman with piggybank daydreaming.
Africa Studio / Shutterstock.com

Without a plan for life after retirement, many retirees find themselves feeling vaguely unfulfilled and restless, craving something more but not knowing what that something might be. Focusing on the financial aspects of retirement is important, but the personal side of your retirement plan is just as important, and could ultimately guide how you use your retirement assets.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

5 Tips to Hedge Against Inflation

To achieve financial freedom and grow wealth over long periods of time, it’s vital to understand the concept of inflation.

Inflation refers to the ever-increasing price of goods and services as measured against a particular currency. The purchasing power of a currency depreciates as a result of rising prices. Put differently, a rising rate of inflation equates to a decreasing value of a currency.

Inflation is most commonly measured by the Consumer Price Index (CPI) , which averages the national cost of many consumer items such as food, housing, healthcare, and more.

The opposite of inflation is deflation, which happens when prices fall. During deflation, cash becomes the most valuable asset because it can buy more. During inflation, other assets become more valuable than cash because it takes more currency to purchase them.

The key question to examine is: What assets perform the best during inflationary times?

Federal Reserve try to control inflation through monetary policy. Sometimes their policies can create inflation in financial assets, like quantitative easing has been said to do.

5 Tips for Hedging Against Inflation

The concept of inflation seems simple enough. But what might be some of the best ways investors can protect themselves?

There are a number of different strategies investors use to hedge against inflation. The common denominators tend to be hard assets with a limited supply and financial assets that tend to see large capital inflows during times of currency devaluation and rising prices.

Here are five tips that may help investors hedge against inflation.

1. Real Estate Investment Trusts (REITs)

A Real Estate Investment Trust (REIT) is a company that deals in real estate, either through owning, financing, or operating a group of properties. Through buying shares of a REIT, investors can gain exposure to the assets that the company owns or manages.

REITs are income-producing assets, like dividend-yielding stocks. They pay a dividend to investors who hold shares. In fact, REITs are required by law to distribute 90% of their income to investors.

Holding REITs in a portfolio might make sense for some investors as a potential inflation hedge because they are tied to a hard asset—real estate. During times of high inflation, hard assets tend to rise in value against their local currencies because their supply is limited. There will be an ever-increasing number of dollars (or euros, or yen, etc.) chasing a fixed number of hard assets, so the price of those things will tend to go up.

Owning physical real estate—like a home, commercial complex, or rental property—also works as an inflation hedge. But most investors can’t afford to purchase or don’t care to manage such properties. Holding shares of a REIT provides a much easier way to get exposure to real estate.

2. Bonds and Equities

The recurring theme regarding inflation hedges is that the price of everything goes up. What investors are generally concerned with is choosing the assets that go up in price the fastest, with the greatest possible return.

In some cases, it might be that stocks and bonds very quickly rise very high in price. But in an economy that sees hyperinflation, those holding cash won’t see their investment, i.e., cash, have the purchasing power it may have once had.

In such a scenario, the specific securities aren’t as important as making sure that capital gets allocated to stocks or bonds in some amount, instead of holding all capital in cash.

3. Exchange-Traded Funds

An exchange-traded fund (ETF) that tracks a particular stock index or group of investment types is another way to get exposure to assets that are likely to increase in value during times of inflation and can also be a strategy to maximize diversification in an investor’s portfolio. ETFs are generally passive investments, which may make them a good fit for those who are new to investing or want to take a more hands-off approach to investing. Since they are considered a diversified investment, they may be a good hedge against inflation.

4. Gold and Gold Mining Stocks

For thousands of years, humans have used gold as a store of value. Although the price of gold can be somewhat volatile in the short term, few assets have maintained their purchasing power as well as gold in the long term. Like real estate, gold is a hard asset with limited supply.

Still, the question of “is gold a hedge against inflation?” has different answers depending on whom you ask. Some critics claim that because there are other variables involved and the price of gold doesn’t always track inflation exactly, that it is not a good inflation hedge. And there might be some circumstances under which this holds true.

During short periods of rapid inflation, however, there’s no question that the price of gold rises sharply. Consider the following:

•  During the time between 1970 and 1974, for example, the price of gold against the US dollar surged from $240 to more than $900 for a gain of 73%.
•  During and after the recession of 2007 to 2009, the price of gold doubled from less than $1,000 in November 2008, to $2,000 in August 2011.
•  In 2019 and 2020, gold has hit all-time record highs against many different fiat currencies.

Investors seeking to add gold to their portfolio have a variety of options. Physical gold coins and bars might be the most obvious example, although these are difficult to obtain and store safely.

5. Better Understanding Inflation in the Market

Ultimately, no assets are 100% protected from inflation, but some investments might be better than others for some investors. Understanding how inflation affects investments is the beginning of growing wealth over time and achieving financial goals. Still have questions about hedging investments against inflation? SoFi credentialed financial planners are available to answer questions about investments at no additional cost to members.

Downloading and using the stock trading app can be a helpful tool for investors who want to stay up to date with how their investments are doing or keeping an eye on the market in general.

Learn more about how the SoFi app can be a useful tool to reach your investment goals.



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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . The umbrella term “SoFi Invest” refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.

Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
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Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments.

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Source: sofi.com

How Do I Justify the Cost of Therapy? (Hour 1)

Relationships, Debt, Retirement, Career

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COVID accelerated migration trends, but is it sustainable?

Even Norman Rockwell couldn’t put a rosier cast to New Hartford, Connecticut, in mid-autumn. On the far western outskirts of the Hartford metropolitan area, the town’s converted brick mill buildings are now occupied by restaurants that sell and serve locally grown produce and locally made artisanal cheese. A river – the Farmington – really does run through the town, shallow and sparkling, punctuated by occasional fly-fisherman. Bridges arch over the river from stands of yellow-leafed birches to groves of flaming maples.

It’s exactly the kind of place that’s attracting pandemic-panicked New Yorkers who, drawing a circle of two hours’ train travel from Manhattan, figure they can set up parallel lives in the country and city. 

The COVID-19 crowds that are now seeking fresh air and socially distanced living are looking beyond what is considered more traditional second-home destinations to small towns that have struggled to catch the updraft of the broadband revolution. As city dwellers scatter, enough of them are landing in the semi-rural spots to potentially realign the very definition of economic development, land use and the consequent cascade of broad band investment, municipal services, taxation and local spending priorities. 

“The economy is moving faster than the population,” said Mark Lautman, an economic development consultant who has helped local organizations in New Mexico and elsewhere forge partnerships that serve residents and employers.

In the past, economic development was defined by incentives for buildings and infrastructure with the aim of winning and keeping employers with substantial numbers of workers. 

The COVID-19 pandemic has accelerated a longer-term trend of separating talent from location. Economic development leaders are just starting to realize the profound implications of a distributed workforce on their local economies, workforce development, housing and real estate markets, he said. 

“If you don’t have qualified workers, you can’t grow your economy,” Lautman said. “And all of a sudden, the cost of place of operation is zero. States throw massive resources at site-based economic development but remote economic development needs a fraction of that.”  

Investors are already moving money into place to catch the coattails of COVID-catalyzed change. 

Collin Gutman, managing partner of SaaS Ventures, a Washington, DC-based venture capital firm that works specifically with young companies in smaller metropolitan areas far from Silicon Valley, said that the pandemic has propelled high tech companies to redefine where and how they look for talent.

“Previously there had been a perception that these types of businesses could only get critical mass of talent in San Francisco or Boston,” he said. “That perception has changed very quickly in the past 12 months. We’ve seen an outflow to places like Louisville, Lexington, Nashville and people buying second homes in rural counties.”

Daniel Jeram is New Hartford’s First Selectman, the top official of the 7,000- resident town. He said he hasn’t seen anything quite like this year’s real estate sales burst.  

“The game is on and it has been for months,” Jeram said. “You can tell from the license plates driving around town.” 

He isn’t kidding. Regional market reports from the Greater Hartford Association of Realtors released at the end of 2020 show that year-over-year, pending single-family home sales rose 49.9%, days on market dropped by 32.1% and the median home sale price rose 13.3% to $280,500. 

Maintaining the growth

With young families pouring in, New Hartford’s challenge is how to keep them, especially as support for enhanced broadband has been under discussion for years, with little progress, Jeram said. New Hartford is on the eastern edge of a subregion of northwestern Connecticut and southwestern Massachusetts that suffers from weak cell coverage and tepid broadband. 

“We’re okay,” said Jeram, of New Hartford’s cable service, “but that is an ongoing debate that state and local leaders are struggling with, because cost to get broadband in is extremely high. Everyone knows it’s the wave of the future, but how will we pay for it?”

Rista Malanca is trying to figure that out. She is director of economic development for neighboring Torrington, where broadband somewhat peters out. 

“We’re attractive and affordable for a lot of people, but how do we keep them engaged, so they center their lives here, and spend their money here?” Malanca said. 

Powerful broadband paves the digital way for not just telecommuting and remote collaboration, but also for telehealth, remote education for children and adults and a host of other services that frame the new hybrid of a sophisticated information economy invisibly driving growth.  

Consultants with McKinsey project that 22% of companies expect to hire more remote freelance workers in the foreseeable future. Before the COVID-19 pandemic reordered the American workforce in March 2020, only 4.9% of full-time U.S. workers telecommuted from their homes. By the end of June, 42% of the workforce was home-based, and workforce researchers expect that the dramatic shift is largely permanent. FlexJobs, a Boulder, Colorado-based employment site that serves both individuals and employers, projects that capturing work-life balance and reducing commuting stress are top priorities for people who want to move and either bring their jobs with them or find remote work.

Changing lifestyle

Professionals who bring high-paying jobs with them also transplant demand for higher-end dining, grocery, local entertainment and home renovation and maintenance services, said Shaun Greer, vice president of sales and marketing at Vacasa, a Portland, Oregon, company that provides property management services to more than 21,000 vacation homes in North America. 

Unlike short-term renters, professionals relocating for a full-fledged second hub where they can work and attend school remotely, need functional and municipal services largely different from tourist demands. 

“If this trend continues, it will affect municipal budgets,” Greer said. “Most of these communities are restricted in some way, such as [their level of] power or utilities. If this growth continues they’ll have to put in a lot more infrastructure to keep up.”

New Hartford could take a cue from The Peoples Rural Telephone Cooperative in McKee, Kentucky, population 800. 

In 2007, the cooperative, formed in 1950 and serving two rural Kentucky counties, decided to go all in on broadband, related Keith Gabbard, who has been the cooperative’s CEO for the past 25 years. Patching together about $50 million from federal, state and local sources, the service committed to bringing broadband to every home in its service area. 

“Since 2014, we’ve had gigabit service to every home and business,” Gabbard said. “Once we got it built, we realized, ‘what do we do with it?’ We had to become more economic-development minded.”

Gabbard took on the role of one-man employment liaison, workforce training advocate, lobbyist to state legislators and public relations cheerleader, relentlessly promoting the cooperative’s ready, willing and connected workforce at conferences. Working relationships with national workforce development agencies and platforms – including FlexJobs – produced a stream of inquiries from American companies seeking to bring operations back to the U.S. from overseas, and looking to expand domestically. 

“It’s been amazing,” Gabbard said. “In the last five years we’ve had 1,100 teleworks jobs created. People move here because of the internet and we’re seeing even more of that because of the pandemic.” 

McKee still lacks a Starbucks, but it is making inroads with establishing a healthcare clinic that will pivot on telemedicine. And, Gabbard has even drawn local Amish into the high-speed loop as the cooperative hires their construction crews to expand into neighboring counties. 

Communities that were a step ahead are both riding the first crest of post-COVID change while demonstrating the importance of close collaboration among regional economic, workforce and housing development authorities, investors and the private sector.

Broadband brought jobs to northwest New Mexico in 2017 and has anchored the local economy even as the COVID-19 pandemic has rolled from crisis to chronic. Shelly Fausett runs the SoloWorks program in the area, which advocates for workforce development and related supports, and which helps employers find and hire connected workers. SoloWorks had just moved to a new a co-working space to build capacity for distributed teams but the health care crisis kept workers home…and working. 

“Right now in customer service, there are more jobs than people,” Fausett said. 

The 2020 COVID-19 pandemic simply accelerated long-term trends toward remote work, annihilating embedded cultural resistance and rapidly realigning work processes to support sustained collaboration and productivity from any location, said Brie Weiler Reynolds, the in-house career development coach for FlexJobs. 

Remote work surged for both staffers who have always had the capability to work from home and among the current and aspiring self-employed who immediately seized the opportunity to redesign their careers around the location and lifestyle they had always craved. In March, the FlexJobs platform received a 50% increase of inquiries and applications from workers, she said. 

Companies and employment agencies – private and government-run – that already collaborated with local economic development and workforce training programs had a big head start on those that had in place only traditional programs, Weiler Reynolds said. Cross-functional workforce development programs that “combine broadband outreach with remote work training and company partnerships and that partner with FlexJobs to find the actual jobs, are serving people who already live in their areas and are hiring specifically from economic groups hard-hit by the tourism and hospitality industries.”

Workforce housing that is designed around and for home-based work will ensure lower paying, broadband-dependent jobs, such as customer service, highly skilled software developers and managers cut a very different profile, SaaS Ventures’ Gutman said. They are “six-figure Millennials” who expect, if not big-city culture and amenities, at the very least, transportation services that can quickly deliver the big city to the rural doorsteps of spacious houses with dedicated home offices. 

And, the ability to quickly get to major cities will be a key plank of rural economic development, especially as patterns of post-pandemic life emerge, he said. High-tech transplants want lots of fresh-air recreational amenities but also want to take just one connector flight to a major air hub. 

“It could be that saving the regional airport is your key to economic prosperity,” Gutman said. 

COVID redefines tourism economies

The return on remote work-equipped workforce housing is short and sweet for communities long tied to cyclical tourism economies. A solid base of long-term second-home owners is already redefining tourism economies, Greer said, extending the 2020 season well into autumn, and thus continuing demand for cleaning, maintenance, renovation and some municipal services and activities. 

“What we’re excited about is that this change means we keep more of our seasonal employees, hopefully longer,” he said, adding that a greater number of staycation homeowners could permanently stabilize tourist-town employment, municipal and local business cash flow and demand for broadband and other services.

The pandemic has proven the possibilities and powerful potential of a distributed workforce and, by extension, distributed economic development, said one longtime broadband researcher and advocate. 

“The pandemic could yield a lasting legacy if municipalities, counties and states forge regional alliances for economic development, and use their combined power to rapidly build universal broadband, align tax policies and regulatory incentives to encourage private and public expansion of broadband to connect all American citizens,” said Rouzbeh Yassini, executive director of the Broadband Center of Excellence at the University of New Hampshire in Durham, New Hampshire. “States need to relinquish counterproductive strategies focusing on stealing businesses from each other and combine forces. That’s the only way that many small towns and rural areas will gain critical mass to justify private investment in 5G, both through wired (cable and phone) and wireless services. 

“If you get five or six state governments together, and get regional connectivity vision established, they’ll improve the economic value of that entire region for web-based daily services and for mapping, driverless cars and gain scale for recruiting residents, farmers and business,” Yassini said, citing the cascade of connected services that could support remote working, aging in place and other life-enhancing functions. 

Lautman, the economic development consultant, detects a rapid realignment of the definition of economic development with state and local resources to support distributed workforces. Hybrid strategies that blend satellite nodes for regional managers and occasional team meetings are a natural evolution of the urban model of co-working spaces, he said. The pandemic has also elevated the importance of health care, childcare and related services as essential to workforce stability and productivity. 

As professionals and corporate leaders become acclimated to working from their second homes, they might become influential advocates for their industries to pivot to distributed workforce development, potentially bringing economic development authorities and broadband providers with them.  

“To create an environment that incentivizes and supports remote work, if I were a local economic development executive, I’d be at my state legislature asking for the same incentives to build houses with home offices that they give to industrial developers,” Lautman said. “Now we have a residential real estate platform for economic development.” 

Source: housingwire.com

Stop Spending Your Money To Fix Someone Else’s Bad Decisions (Hour 1)

Debt, Savings, Home Buying, Taxes, Relationships

As heard on this episode:

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  • Christian Healthcare Ministries: https://bit.ly/2XBZfE3 

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How to Make a Living Will

How to Make a Living Will – SmartAsset

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A living will is a legal document that allows you to specify the kind of care you’d like to receive in end-of-life situations. This is different from an advance healthcare directive, though either one can be an important part of an estate plan. If you’d like to draft a living will, you could get help from an estate planning attorney or you may try using an online software program to create one. Regardless of which one you choose, it’s important to understand how to make a living will to ensure that yours is valid and your wishes are upheld. A financial advisor can offer valuable insight and guidance as you make an estate plan.

What Is a Living Will?

Living wills can be used to spell out what type of healthcare you do or don’t want to receive in end-of-life situations or if you become permanently incapacitated or unconscious. This document tells your doctors and other healthcare providers as well as your family members what type of care you prefer in these situations.

For example, you can include instructions in your living will regarding things like resuscitation, life support and pain management. If you don’t want to be left on life support in a so-called vegetative state, you could communicate that in your living will. Or if you’re terminally ill and only want to receive palliative care you could include that as well.

A living will can be part of an advance healthcare directive that also includes a healthcare power of attorney. This type of document allows someone else, called a healthcare proxy, to make medical decisions on your behalf when you’re unable to. A living will typically only applies to situations where you’re close to death or you’re permanently incapacitated while an advance directive can cover temporary incapacitation. So if you’re unconscious after a car accident, for instance, your healthcare proxy could direct doctors regarding what type of care and treatment you should receive.

How to Make a Living Will

The first step in making a living will is deciding whether you want to do it yourself or hire an estate planning attorney. Making a living on your own using an online software program may cost less than paying an attorney’s fee. But if you want to be certain that your living will is drafted accurately and legally, you may feel more comfortable getting help from an estate planning professional.

If you choose to make a living will on your own, you can find the necessary forms online. Keep in mind that your state may have a specific form you’re required to use for your living will to be considered valid. There may also be minimum requirements, in some cases identical to what would be required for a simple will, you’ll need to meet to make a living will in your state, including:

  • Being at least 18 (or 19 in some states)
  • Being of sound mind
  • Having the will be properly witnessed
  • Getting the document notarized once it’s complete

Those are the technical aspects of how to make a living will. Your main focus may be on what to include. Again, your state may have a specific format you’ll need to follow. But generally, you’ll need to leave instructions regarding the following:

  • Life-prolonging care. You’ll need to decide what types of life-prolonging treatments, such as blood transfusions, resuscitation or use of a respirator, you do or don’t want to receive.
  • Intravenous feeding. You’ll also need to specify whether you want to be given food and water intravenously if you’re incapacitated and can’t feed yourself.
  • Palliative care. If you’re facing a terminal illness, palliative care can be used to manage pain if you decide to stop other treatments.

It’s important to be as thorough and specific as possible when outlining your wishes so there’s no confusion later on. This ensures that your wishes are carried out and it also relieves your loved ones from the burden of having to guess at what you do or don’t want.

What to Do After Making a Living Will

If you’ve drafted a valid living will according to the laws of your state, the next step is to make your wishes known to other relevant parties. This includes passing copies of your living will to your doctors, hospital and loved ones. If you’re drafting a living will as part of an advance healthcare directive, you’d also want to make sure your healthcare proxy has a copy.

It’s also important to review your living well regularly to make sure it’s still accurate. If you change your mind about the type of care you’d like to receive, then you’d want to update or rewrite your living will to make sure that’s reflected. If not, then your doctors and loved ones would be left to carry out the terms of your original living will, which may conflict with what you actually want.

Who Needs a Living Will?

A living will is designed for people who have specific wishes regarding care in situations where they have a terminal illness or become permanently incapacitated. If you’re comfortable letting your loved ones decide which type of care should be given to you, then a living will may not be necessary. On the other hand, if you absolutely don’t want a certain type of treatment then a living will is the best way to make that clear to your doctors and family members.

You might consider drafting a living will along with a healthcare power of attorney to ensure that all of the bases are covered, so to speak, when it comes to healthcare decision-making. Having a healthcare proxy can ensure that the terms of the living will are upheld and they can also make decisions about your care for you in situations where you’re only temporarily incapacitated. When choosing a healthcare proxy, it’s important to select someone you can rely on to adhere to your wishes.

The Bottom Line

A living will can be an important part of preparing your family for your death. This kind of document is a relatively straightforward legal document that you may consider including in your financial plan or estate plan if you have specific wishes regarding end-of-life care. Knowing how to make a living will and what it covers can help you decide if it’s something you need to have in place.

Tips for Estate Planning

  • A living will is not the same thing as a last will and testament. Living wills cover healthcare decision-making while a last will and testament deals with the distribution of your assets once you pass away. A will is important to have, since without one your assets are distributed according to the inheritance laws of your state. An estate planning attorney can help you draft a last will and testament as well as a living will. Or you can use online will-making software programs to create a simple will on your own.
  • Consider talking to a financial advisor about whether a living will is something you need. If you don’t have a financial advisor yet, finding one doesn’t have to be a complicated process. SmartAsset’s financial advisor matching tool can get you personalized recommendations, in minutes, for professional advisors in your local area. If you’re ready, get started now.

Photo credit: ©iStock.com/GCShutter, ©iStock.com/zimmytws, ©iStock.com/FluxFactory

Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She’s worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.
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How to Retire in Turkey: Costs, Visas and More

How to Retire in Turkey: Costs, Visas and More – SmartAsset

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Turkey is filled to the brim with beautiful architecture, art and a melange of cultures that reaches back thousands of years. It’s home to artifacts from communities like the Hittites, Ancient Greeks, early Christians and Mongols, which fill this nation of some 82 million, with a rich sense of history. Lying as it does at a crossroads of Europe and Asia, visitors can see a unique blend of Western and Eastern influences. Its Mediterranean and Black Sea beaches are renowned for their beauty. Istanbul’s Grand Bazaar extends across 58 covered streets hosting some 1,200 shops. If you’re considering retiring in Turkey, here’s an overview of some basic information you’ll need. A financial advisor can offer valuable guidance as you consider retiring abroad.

Cost of Living and Housing

It’s much less expensive to live in Turkey than it is to live in the U.S. Without accounting for rent, Turkey’s cost of living is 53.56% lower than in the U.S. on average, according to Numbeo, a cost-of-living database.

U.S. rent prices are 556.13% higher when stacked against those in Turkey, on average. To rent a one-bedroom apartment in a city center will run you around $215.26 in Turkey, whereas a comparable setup in the U.S. would run about $1,340.16. If you wanted to pursue purchasing an apartment in Turkey, you would find that the price per square foot in a city center is averaged out to $83.07. In comparison, the same square footage in a similar city location in the U.S. would cost about $328.96.

To further illustrate the contrast, we can compare Istanbul, Turkey’s most populated city, to the U.S.’s New York City. To maintain the same standard of life, you would need around $8,203.10 in New York, which contrasts starkly to the approximately $1,960.45 necessary in Istanbul, assuming you rent in both.

So, if you’re looking for a country to retire in with both affordable renting prices and lower property costs to make the most out of your savings, Turkey may be a solid option.

Retire in Turkey – Visas and Residence Permit

Turkey doesn’t have a visa specifically for retirement, so you have to apply for a residence permit instead. This requirement applies to anyone who intends to remain in the country more than three months. You’ll first have to apply for a short-term residence permit, and you must do so within a month of your arrival in Turkey. There is an online application you fill out at the Turkish Ministry of Interior’s website. Once you finish, it will prompt you to make an appointment with the nearest DGMM office to continue the process and pay the fee your visa requires.

A short-term residence permit is issued on a two-year basis. After you’ve lived in Turkey uninterrupted for eight years under your short-term visa, you can apply for a long-term residence permit. These extend indefinitely.

No matter what residence permit you are applying for, you will likely need to show proof that you possess adequate assets. This can shift whether or not you have dependents, but a single person is generally required to have the equivalent to a month’s worth of Turkish minimum wage. As of early 2021, that would be around $400.

Retire in Turkey – Healthcare

The World Health Organization ranking of national healthcare systems puts Turkey’s at 70th out of 191. The central government body responsible for healthcare and related policies is the Ministry of Health (MoH). There is also a private sector and university-based care; however, the MoH is the main body responsible for providing healthcare. You can expect the quality of healthcare in Turkey to vary between regions. Although it’s cheaper than some of its European neighbors, access is limited in more rural areas. You’re more likely to have high-quality care in major urban locations like Istanbul – as well as the ability to communicate with your healthcare providers in English. This increase in quality is why most expats choose to go to private medical facilities over public ones.

All residents under 65 must have either public or private health insurance. Expats who have resided in Turkey for over a year under their residence permit can apply to have public health insurance through the state-run Sosyal Güvenlik Kurumu (SGK). Expats usually choose to supplement this with private insurance (or just choose private) to cover additional fees at private facilities.

As Turkey has grown as a country and political entity, it has experienced a great deal of reform around its healthcare system. It likely will continue to experience further changes in the future.

Retire in Turkey – Taxes

Like many countries, residents and non-residents are subject to different taxes in Turkey. Residents pay taxes on their worldwide income, whereas non-residents only have to pay taxes on Turkish-sourced income. The country uses a progressive tax scale, ranging from 15% to 35%, depending on your income bracket.

Turkey does possess a tax treaty with the U.S., which can provide some relief. You will only have to pay into one country’s Social Security program as a result, which in Turkey is a 14% flat tax for employees. Otherwise, there are also tax exemptions that may allow you to pay less on your U.S. income taxes. One example is the foreign earned income exclusion, which lets you exclude the first (approximately) $100,000 for foreign earned income if you can prove your Turkish residency.

Retire in Turkey – Safety

Each expat’s experience is unique. Some may travel through Turkey and find they encounter little to no issues on a security level. That’s not to say you shouldn’t be cautious. The U.S. Department of State’s travel advisory warns travelers either visiting or moving through Turkey to be wary of both terrorism and arbitrary detentions. The advisory heavily suggests that you avoid the Sirnak and Hakkari provinces, which are in the southeastern part of the country, as well as any area within six miles of the Syrian border to avoid terrorist activity. The State Department’s most recent report on human rights practices in Turkey bears a close reading, especially sections 1 and 6.

Although you should speak with locals and enjoy the culture, you should also be wary of your surroundings and keep an eye on political developments. It is also advised that you don’t engage with political topics online either since that can still be a red flag.

The Takeaway

Turkey is still in the process of significant political change, making settling down difficult for the average retiree. That, along with terrorism concerns, may encourage you to look at other countries instead. However, Turkey has a strong sense of identity with a warm populace who wants to share their cultural. That sense of belonging, along with the country’s beautiful features and its low living costs, may make the challenges worth it to you.

Tips on Retiring

  • Finding the right financial advisor who can help address your needs doesn’t have to be hard. SmartAsset’s free tool matches you up with local financial advisors in as little as five minutes. If you’re ready to be meet with advisors in your area that will help you achieve your financial goals, get started now.
  • Planning your retirement comes with its challenges, especially if you intend to move abroad. While Turkey may have low living costs, there still may be other financial burdens you have to address. To get an idea of what to expect, stop by our retirement calculator.

Photo credit: ©iStock.com/hadynyah, ©iStock.com/Nikada, ©iStock.com/TEZCAN

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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How to Retire in Barbados: Costs, Visas and More

How to Retire in Barbados: Costs, Visas and More – SmartAsset

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An island in the West Indies, Barbados is a jewel of the Caribbean. Its turquoise waters and golden beaches are a perfect match to many people’s idealized days in the sun that they hope is waiting at the end of their working life. While this commonwealth country, where English is the official language, does have good reason to boast, you may wonder whether it’s right for you to retire in Barbados. Before contacting your financial planner to see if your finances are in order for the move, here are a few matters to consider first.

Cost of Living and Housing

Barbados’s cost of living tends to run a little higher than the U.S.’s on average, according to Numbeo, a cost-of-living database. At 12.24% above the U.S.’s average, without taking into account rent, the difference is not as significant as some other percentages found between the two.

For example, although Barbados has a higher cost of living, it has a much lower rent average. In comparison to the U.S., Barbados’s rent is generally 48.53% lower. You’ll find that renting is the cheaper way of living in Barbados, with a single-bedroom apartment in a city center at about $654.55. However, purchasing is a different story. At about $3,087.21 per square meter to buy an apartment in the same setting, it’s in the same price range as the U.S. There, it’s around $3,533.12 per square meter.

So, if you’re looking to stretch your retirement funds further, it makes more sense to pursue renting Barbados rather than purchasing a property.

Retire in Barbados – Visas and Residence Permit

For those who want to retire in Barbados, the process is relatively simple. Individuals over 60 with sufficient funds to support themselves can apply for immigrant status. After living in the country for five years, those people can then apply for permanent residence. You’ll have application and approval fees, in this case, $300 and $1,200, respectively.

Another option open to retirees is a special entry permit (SEP). This permit is offered to retired property owners and allows them to visit the island and leave as they please. The main requirements include owning Barbados real estate valued at $150,000 or higher and health insurance coverage. The latter’s value depends on the person’s age; below 50 has to have $350,000, and over 50 has to have $500,000 worth of coverage.

There are flat fees to cover for the SEP. It’s $5,000 for those below 50 and above 60 with $3,500 for those in between 50 and 60. Once you hit 60, this permit is indefinite, but you must renew it until then.

Retire in Barbados – Healthcare

Barbados enjoys a high standard of living and, thus, its people’s health is overall quite good. Its healthcare system is even viewed as among the best in the Caribbean. However, if you’re not a Bajan (as citizens of Barbados are sometimes called), you are not included under the island’s universal healthcare system. Therefore, if you’re an expat looking to retire in Barbados, you should ensure that you have private health insurance. Otherwise, numerous travelers and potential residents seek out the U.S. for treatment instead.

This outsourcing is also partially due to the difficulty in accessing professional care, such as rehab services. Otherwise, you’ll generally find four types of institutions: hospitals, both private and public; polyclinics; alternative healthcare clinics; and somewhat specialized hospitals, such as the five geriatric hospitals on the island.

Retire in Barbados – Taxes

After you spend 182 days of one year in Barbados, you are considered a resident. So, it’s important to know the tax distinctions between resident and non-resident status. Residents must pay taxes on their worldwide income, or the income they earn both inside and outside Barbados. In contrast, non-residents only pay taxes on income earned in Barbados.

For residents, they must file their income taxes on a minimum threshold of BBD50,000, or approximately $24,786. Incomes up to and including BBD50,000 incurs a 12.5% tax rate, while going over that amount leads to 28.5%. Residents are ensured a basic personal allowance of BBD25,000 ($12,500) and BBD40,000 ($20,000) for pensioners older than 60.

Non-residents receive the same tax rates. However, it’s important to note that even if you live outside the country, you must file taxes with the U.S. as an expat as well. Barbados and the U.S. have a tax treaty that can offer benefits and help ease the burden. There are also opportunities for U.S. expats through the foreign earned income exclusion and foreign tax credits to avoid double taxation on their Barbados earned income.

Retire in Barbados – Safety

While U.S. expats are not specific targets of crime in Barbados, they are still susceptible to crimes of opportunity and violence. Theft, such as burglary and gun violence, among other crimes, exist in Barbados. So, it is essential to remain vigilant, to avoid walking alone, particularly at night, and to know who you’re with at all times.

In particular, the U.S. Department of State advises against traveling through specific areas on the island to avoid these dangerous interactions. Areas to avoid include Crab Hill, Nelson and Wellington Streets and general nighttime party cruises.

Be cautious about which activities you enjoy, such as water sports or tourist events. This advisement comes more from a practical, safety concern than a pointed targeting of tourists, though. So, keep your wits about you.

The Takeaway

Barbados is the island of dreams for some retirees. Thanks to the prominent U.S. community as well as an English-speaking citizenry, there’s less of a culture shock to shake you up. There is also the gorgeous weather, a location out of most hurricanes’ paths and the relative ease in becoming a resident. However, before you start to plan out your future on this island, it’s best to speak with a trusted financial advisor. Such a person can lay out the commonwealth’s tax and healthcare systems and help you determine whether the high purchasing price of property is in line with your long-term goals.

Tips for Achieving Your Retirement Goals

  • Finding the most suitable financial advisor for your needs doesn’t have to be complicated. SmartAsset’s free tool matches you with local financial advisors in as little as five minutes. If you’re ready to be matched with your financial advisor, who will help you achieve your financial goals, get started now.
  • Barbados may not have a high cost of living compared to the U.S., but the difference could still affect your finances. To see  if your finances will support this, try our retirement calculator. Just put in a few details about where you want to retire, when you want to retire and the value of your current savings.

Photo credit: ©iStock.com/Fyletto, ©iStock.com/isitsharp, ©iStock.com/zstockphotos

Ashley Chorpenning Ashley Chorpenning is an experienced financial writer currently serving as an investment and insurance expert at SmartAsset. In addition to being a contributing writer at SmartAsset, she writes for solo entrepreneurs as well as for Fortune 500 companies. Ashley is a finance graduate of the University of Cincinnati. When she isn’t helping people understand their finances, you may find Ashley cage diving with great whites or on safari in South Africa.
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