Understanding

The last day of 2017 is here, we are moving on to a new year, and many of us have made new years resolutions. These resolutions are our wish to change our life for the better, for some of us we will want to lose weight, some will want to get in better shape, others will want to get more, more love, more money, more property, more respect. Others will want to have less, less pain, less emotional hurt, less heartache.

You cannot have less pain or hurt, until you understand why something really hurts. Once you understand then and only then can you begin to stop or lessen the hurting and over time it (whatever it is will) stop hurting.

 

What is important is that you understand that when you understand you have options, you will begin to take the correct action.

 

And when you get that no one can ever stop you from loving more, you feel the love you had earlier denied.

 

It’s time to get it on, so as you start the new year I hope that your resolution is to gain understanding and knowledge so you can take action to lessen pain or gain your goals. It all starts with knowledge and understanding

Divorce costs women when they retire

More than seven in 10 (71%) couples don't consider pensions during divorce proceeding, leaving women £5bn out of pocket every year, a report by Scottish Widows has found.

The 13^th edition of the annual report Women and Retirement (pdf file) found two-fifths (40%) of women said their retirement prospects worsened because of divorce, compared to less than a fifth (19%) of men.

It found just 9% of women claimed they want a fair share of pensions, despite the average married couple's retirement pot totalling £132,000 - more than five times the average UK salary of £26,000 or just over the average price of a house in Bradford.

The report found married people would be more concerned about their fair share of any jointly owned property (56%) and more than a third (36%) would want to split their combined savings.

Some 13% of married people said they would be more worried about losing a pet during a settlement than sharing a pension.

The report pointed to a general lack of knowledge about pension-related legalities that could be contributing to women's retirement saving woes post-divorce.

Nearly half (48%) of women have no idea what happens to pensions when couples get divorced, which would explain why so few couples consider them as part of a settlement.

Furthermore, a fifth (22%) presume each partner keeps their own pension and 15% believe they are split 50-50, no matter what the circumstances.

The report suggested to even out the inequality between men and women in retirement, the automatic enrolment minimum earnings threshold should be scrapped and the minimum age to qualify for automatic enrolment should come down from 22 to 18.

It also suggested the inclusion of pensions in divorce proceedings should be made compulsory and the workplace should be used better as a key channel for addressing the retirement savings gap.

The report also recommends that the inclusion of pensions in divorce proceedings be compulsory. ONS data shows that 42% of marriages end in divorce, but their research reveals that seven in 10 (71%) couples don’t consider pensions during divorce proceedings. They would like to see a Government-led education campaign to address this issue and help men and women better understand the legalities. As the Department for Work and Pensions scopes out the remit of the new Financial Advice and Guidance Body, there’s an opportunity to encourage the inclusion of a module focusing on discussing pensions as part of divorce negotiations.

This Amazing Musical 'Coffin Club'

Thanks to Ronnie over at Time Goes By for the idea. This video is a fun take on a very serious topic and arrived at the right time for me. Our family received some sad news just before Christmas that one of my young (age 25) Grand Nephews had been murdered (he was in the wrong place with the wrong person and was murdered). This is the third Christmas in a row that we have been faced with a family members death so close to the holidays.

When life takes you to dark places, there is always a glimmer of hope. 
I enjoy life’s serendipity moments. Finding humour in any situation is what makes life so surprising. The people in this video are full of life, energy and they have a wonderful sense of humour. This video takes a humorous look at how we face the end of life, and it is very enjoyable. I watched it and I was able to relate. In a few years, I will be 73 and I hope that the funerals will not come fast and furious as they claim in the video.  I was still able to laugh. Life is good even when faced with tough situations.

When I go, I do not plan to have a coffin as my wishes are to be cremated after the medical system takes all of my organs that can be used by the living. I do like the idea expressed in the video of personalizing your final resting place and the idea that you can save your family some money, by building your coffin yourself. I wonder how long this idea will take to spread to other communities. Another way the boomers are changing society.

Does the 4% rule still apply?

Life expectancy is a big unknown for people who are thinking about retiring. So here is life expectancy for those who are 65 in some countries from around the world.

Country	U. S. A	Canada	U.K.	Australia	France
Men’s Year	17.1	18.8	18.8	18.8	23
Women’s Years	20.7	23.7	22.7	23.7	27.2

The figures above are important for the millions of people facing the tough decision about how to string out their limited savings for a retirement that, on average, should last depending where you live between 17.1 years and 23 years for a male taking a pension at 65, and between 20.7 and 27.2 years for a woman.

In the above countries, there is a multi-pronged approach to pensions, with the government pitching in some money, but the bulk of retirement income has to come from the individual, either through investments encouraged by the government as in Canada through Registered Retirement Savings Plans and in the US through programs such as the 401 K.

The issue for a person approaching retirement is how soon will I run out of my money (we are assuming that some money has been saved). The old formula of taking out 4% a year is not a hard and fast rule anymore. A British investment company took a look at someone who retired at age 65 with 100,000 in savings. They then looked at how long the money would last if the person took out 5%, 6% or 7%.

The results were not too surprising. The money lasted longer withdrawing 5% than it did if 7% were withdrawn. At 5% withdrawal a year the money would last over 25 years but if you withdrew 7% your money would be gone in 14 years.

Longevity is the wildcard, for many as it is unpredictable. I can, I suggest, safely assume that I as a man will live 18 years if I continue to stay in good health at age 65, but there are no guarantees. That is a problem when looking at how much can I afford to take out of my savings per year when I retire.

The investment company suggests that in many ways the best option for would have been to accept a lower income at first, but invest the money in equity income funds. These produce an income that, if all goes well, increases over time. The firm says that someone taking this option would have received an income of just $2,052 in the first year, growing to $4,146 over time. Just as importantly, the money would not have any risk of running out it would have grown with luck and the right market.

Annuities are another option. If I invest $100,000 in a single life level my income would be about $7,100 a year, I would receive that until I died. So, the longer I live the more I get out of the Annuity. By buying an annuity I give myself a guaranteed annual income, which may be more over time than if I kept the money in equities and withdrew 7% a year.

We do not a crystal ball that will tell us how long we will live so we have to take our best guess based on family history, and lifestyle. Once we make our best guess then we will be able to decide how we want to take our money out of whatever saving program in which we have our retirement funds.