What makes the difference?

Neither worthiness, work, craft, ability, expertise, timing, relationships, appearances, reputation, family, perspiration, or tears will make the difference.

More than anything else, living in prosperity and affluence is simply a matter of knowing that you already do.

Medical Expenses after retirement, are you prepared?

Data from the Health and Retirement Study (HRS) finds out-of-pocket health care expenses are typically miscalculated. This study (pdf file) estimates how much retirees spend on out-of-pocket health care expenses after age 70 until their death. Unlike many other studies, it includes only expenses for health care services actually used (i.e., Medicare and insurance premiums are not included), and it is based on self-reported expenses of actual retirees and not on projections for hypothetical individuals. The numbers are adjusted for medical inflation and reported in 2015 dollars.

The self-reported expenses are from panel data from the Asset and Health Dynamics Among the Oldest Old (AHEAD) cohort of the Health and Retirement Study (HRS). Here are the key findings:

·  For the majority of surveyed people, out-of-pocket health care expenses are not as high as commonly believed. For those who die at age 95 or later, the median cumulative out-of-pocket expense after age 70 until death is slightly above $27,000.

·  But these expenses are catastrophic for some. Again, for those who die at age 95 or later, the 90th and 95th percentiles are nearly $172,000 and just over $269,000, respectively. In other words, the distribution of cumulative out-of-pocket medical expenses is skewed toward those with higher expenses.

·  Nursing home expenses are one of the biggest contributors driving the skewness of the distribution. Without out-of-pocket nursing home expenses, the 90th and 95th percentiles for those who die at age 95 or later drops to nearly $96,000 and $154,000, respectively.

·  For all surveyed people, the median out-of-pocket nursing home expense is zero. But just like the distribution of total out-of-pocket health care expenses, the distribution of nursing home expenses is also skewed toward those with higher expenses, which means a small percentage of retirees face very high expenses.

·  For those who die at age 95 or later, the 90th and 95th percentiles of nursing home expenses are slightly over $87,000 and $175,000, respectively.

·  When the sample is restricted to include only those who enter a nursing home, the 90th and 95th percentiles go up to nearly $182,000 and $266,000, respectively.

·  There are significant differences between men and women.

·  Women are significantly more likely to enter a nursing home after the age of 70 (38 percent of men vs. 51 percent of women).

Facts women and retirement steps to take

Yesterday and today's post was taken from the Transamerica Survey 2018 written by Catherine Collinson who is a champion of everyday people including those who are at risk of not achieving a financially secure retirement. She currently serves as CEO and president of nonprofit Transamerica Institute® and Transamerica Center for Retirement Studies® and executive director of Aegon Center for Longevity and Retirement.

The good news is that small steps, when taken together, can add up to great strides in retirement preparedness.  Retirement will be unique for each woman, but the tools to help achieve retirement readiness are common to all. Now is the time for every woman to focus on achieving a financially secure retirement.

1. Start saving for retirement and get into the habit of saving on a regular, consistent basis. Save as much as you can, knowing that both small and large amounts add up and compound over time.
2. If your employer offers a retirement plan, participate. Be sure that your contribution rate takes full advantage of employer matching contributions, if available. Take advantage of the IRS Saver’s Credit if eligible. Consider taking advantage of catch-up contributions if you are age 50 or older.
3. Develop a retirement strategy and write it down. Envision your future retirement and use an online calculator to estimate your long-term savings needs. Then formulate a goal for how much you will need to save each year (be sure to include employer-sponsored retirement plans and outside savings) – and hold yourself accountable for saving.
4. When facing life’s important decisions about whether to reduce work hours or take time out of the workforce to be a parent or caregiver, carefully consider the financial trade-offs and options –such as shifting to part-time work – to help mitigate the impact on long-term financial security.
5. Maintain your ability to continue working past age 65. Keep your job skills up to date or learn new ones. Many employers, community colleges and nonprofits offer classes in the latest technologies and careers. Networking groups offer opportunities to meet more people in particular professions.
6. Become personally involved in your family finances ranging from daily budgeting to long-term planning. Discuss retirement saving and planning with family and close friends. An open dialogue with family members about expectations of either needing to provide or receive financial support should be part of every woman’s retirement strategy.
7. Get educated about retirement investing. Learn about possible ways to help make savings last longer including when to take withdrawals from retirement accounts to minimize taxes and penalties, and the best time to start Social Security to maximize benefits. Seek professional assistance if needed.
8. Have a backup plan in the event of unforeseen circumstances such as separation, divorce, loss of a partner, or being unable to work before your planned retirement. Consider emergency savings; insurance products such as disability insurance and life insurance; and possible ways to cut costs if needed, such as moving to a smaller home, taking on a roommate(s) or scaling back transportation costs.
9. Take care of yourself and safeguard your health. Make a habit of eating healthfully, exercising regularly, getting plenty of rest, and managing stress. Be sure to get routine physicals and recommended health screenings. Seek medical attention when needed.

Learn more about women’s retirement outlook as well as saving and investing for retirement at www.transamericacenter.org.

Facts women and retirement

Here are 18 facts from the Transamerica survey about women in retirement:

1. Only 12% of women are "very confident" in their ability to retire fully with a comfortable lifestyle.
2. About 53% of women plan to retire after 65 or do not plan to retire at all.
3. About 54% of women plan to work after they retire -- 11% plan to work full-time and 43% part-time.
4. Women could struggle to ensure they are, in fact, prepared to work in retirement. While 63% said they are staying healthy, only 57% are focused on performing well at their current job and 46% are keeping their job skills up to date.
5. Roughly 64% do not have a backup plan for retirement income if forced into retirement sooner than they expected.
6. Paying off debt is a financial priority for almost 68% of women. Only 51% of women cite saving for retirement as a priority.
7. About 73% are saving for retirement through a workplace plan and/or outside of work in an IRA, mutual fund, bank account, etc. Women started saving for retirement at 27, on average.
8. About 45% of women expect their primary source of retirement income to come from savings and investments such as 401(k), 401(b) and IRA accounts, while 30% expect to rely on Social Security.
9. However, 81% of women are concerned that Social Security won't be there for them when they are ready to retire.
10. Roughly 47% of Baby Boomer women said they know a great deal or quite a bit about Social Security benefits.
11. About 66% of women are offered a 401(k) or similar employee-funded retirement plan, but 28% of women work part-time and are less likely to have workplace retirement benefits.
12. About 77% of women who are offered an employee-funded plan participate in the plan. They contribute, on average, 7% of their salary to the savings plan.
13. Women believe they will need to save $500,000, on average, in order to feel financially secure in retirement -- but about 55% said they "guessed" to land on that figure.
14. Women's total household retirement accounts are $42,000 (estimated median).
15. Women's emergency savings are just $2,000, though.
16. Just 28% of women are aware of the Saver's Credit, a special tax break to low- and moderate-income taxpayers who are saving for retirement.
17. One in three women use a professional financial adviser to help manage their retirement savings and investments.
18. Only 26% of women consider their long-term health when making lifestyle decisions.