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Old 04-12-2014, 07:53 PM
 
Location: Florida
4,376 posts, read 3,716,488 times
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Quote:
Originally Posted by saralvr View Post
I want to thank all of you for your input. We have a LOT of reading and research to do. I did find a fee for service independent financial advisor that we will be going to in the near future. There will be a gap of needed income and we have to find a way to close that gap. We are both skeptical of annuities, but have started to realize that in some situations they are worthwhile. I wish we weren't in this situation, but we are. After finding this site last summer I started a montly expense report. It has helped tremendously because we can accurately show where we are spending and how much our expenses are. But it is so scary when suddenly you are in this situation. Again, thank you for your help.

Mathjak...firecalc no longer likes me!!!
It might help to pay in cash and stop credit cards. It is harder to spend cash so this might help you save.
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Old 04-12-2014, 10:41 PM
 
160 posts, read 89,609 times
Reputation: 530
Quote:
Originally Posted by saralvr View Post
My husband was laid off recently. He is 61, I am 58. I still work, but I don't bring in much and have no benefits. We will have to get our own health insurance in 3 months (OUCH!) and he also is getting 3 mos of severance. He is hoping to do some consulting work (he is an engineer) but cannot rely on that. We are moving to a more retirement friendly state which we had been researching for a future move. We thought we had several more years to work and save. I will try to find a job there F/T with benefits, but cannot rely on that as it is very difficult in today's economy to find.

We went to our financial guy today and crunched number along with him. At our next session we will discuss when to take SS. My husband wants to at 62 but I am hesitant as it guarantees us 8% increase yearly to wait. But, we do not have enough monthly to live on. We have a shortfall and have to dig into our savings and investments.

I will say that we are 40/60 now and will keep it that way. I know it is risky, but we have to think growth longterm as we truly don't have enough.

Which brings me to annuities. He is suggesting to us to take 25% of our savings and put it in an income annuity which will NOT have a cost of living adjustment. He felt that we would need this by later this year when we have to start withdrawing money.

I have been using him for a while. I like him, but he does work for Fidelity and I get nervous when I think "is he just suggesting this because he works for the company? Is this truly in my best interet?" He told us it will have a "joint payment stream". I have a lot to research on all of this.


Always heard stay away from annuities. But, we DO NOT have a pension. We have our savings and future SS. That's it folks!! So, please give your opinions and insights.

On another side note, we thankfully were saving over 30% of our income in the past year or so. I know we will save moving, but unless I get health insurance for us through a job, that is where the bulk of our money will be going.

Mortgage, cars, credit cards- 0- but will probably need a 2nd hand car in year or so.

Sara, I can't give you much advice but I truly know just how you feel....your story is almost identical to mine!! We're still trying to figure it all out.

My husband just turned 62 in March and was laid off in January. H'e also an engineer and worked in R&D for many years. I'm 59 and have my own online business that brought in some extra cash (not a lot) to supplement his good salary. As a result I also have no medical benefits and we have looked into the ACA marketplace. Now I feel I must make a big effort to bring my business up several notches to bring in more cash. We have six months of severance and I found out that since DH was kept on the company's health insurance program and not placed on COBRA we can wait until the insurance ends in July rather than having to make the purchase by the March 31 deadline. So we save a bit there since health insurance for one of the silver programs will cost us about $1100.00 for the two of us each month starting the second half of this year since we don't qualify for a subsidy.

We also don't have a pension....it's just SS and our savings. We have a good amount saved but the plan was that he would work until 66, get full retirement benefits, I would collect spousal benefits when I turned 66 and it would have given us several more years to save up a substantial amount more!...now that has all been shot down. Like your husband mine also feels like he can do some consulting work however his big obstacle is an autoimmune illness that developed over the last three years and has been challenging to say the least! It makes starting a business so much more difficult.

Other than saving and growing our 401K & IRAs we really haven't given retirement a lot of thought. Now it's been thrust upon us and we're thinking of selling the house in a year or two since it's bigger than what we now need, we still have a mortgage and the property taxes are very high here....but where to go? It's a dilemma. I just don't know what I want or where to go....this is my home and I have friends and connections here. Our two kids live within an hour from us and I would hate to move far from them. So I've been coming here reading the different boards on retirement and finance to get ideas of retirement living.

My brother in law is a CPA who recently retired from a large fortune 500 company and started his own financial planning business which is affiliated with a large company. He's smart and has done very well for himself and we're planning a meeting with him (after taxes) next week to go over all of our options. I have a ton of questions! We moved our 401K into an IRA with his company. I wish I had answers and I tend to worry a lot about our future. I know this happens to a lot of people but I hate being in this situation!

I wish you the best!
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Old 04-13-2014, 06:37 AM
 
Location: Baltimore, MD
3,746 posts, read 4,224,664 times
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Quote:
Originally Posted by Signs9 View Post
<snip> Like your husband mine also feels like he can do some consulting work however his big obstacle is an autoimmune illness that developed over the last three years and has been challenging to say the least! It makes starting a business so much more difficult.
If your husband's autoimmune illness prevents him from working full time, ask him to consider filing for Social Security Disability benefits. My brother, who is now 64, did not file when he was eligible to do so and is now paying the penalty. Had he applied for disability benefits about ten years ago, he would have locked in his full retirement benefit rather than taking a reduced retirement benefit at age 62.

To add insult to injury, he was recently advised that he will need a liver transplant in a few years but is ineligible to be placed on the transplant list at this time. Although his wife continues to work full time, their household income is significantly reduced and when he dies in the next few years, the survivor benefit will be significantly reduced as well.
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Old 04-13-2014, 07:09 AM
 
160 posts, read 89,609 times
Reputation: 530
Lenora, I'm very sorry to hear about your brother. Why is he not eligible to be placed on the transplant list? That's too bad! I wish him and his wife the best.

My husband did apply for SS disability and we went down to the SS office just a few days ago to fill out the application in person. We brought his medical records with us and after all was said and done we were told he has a 50/50 chance of being approved the first time around. I have heard that it can be very difficult to get approval and often people have to appeal....sometimes more than once. The fact that he's over 60 might help a bit for the approval and we're hoping to find out in a few months.
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Old 04-13-2014, 08:00 AM
 
3,871 posts, read 1,917,815 times
Reputation: 5380
We use Vanguard. We've have a single payment annuity that's been accumulating there for years. When it comes time for it to start paying us we'll have a choice of plans and providers to do it through. I've always trusted Vanguard because of the low cost mutual funds, John Bogle, and that the company is owned by the its mutual fund holders.

They have an annuity tool link on their website that can show you how much you will receive each month depending on your age and how you elect to withdraw it (inflation, surviving spouse, 10 years certain, etc.). Check it out.
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Old 04-13-2014, 11:28 PM
 
3,567 posts, read 2,377,425 times
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Lots of good advice in the thread, but one thing I want to point out is that annuities offer not just longevity insurance, but also Rate of Return insurance. You can probably (setting aside longevity issues) earn more with a balanced investment portfolio, but even AAA bonds have a (small) possibility of principal loss. Annuities offer a variety of rate guarantees, which is part of what you're paying for with the less favorable fees/expected returns.
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Old 04-14-2014, 07:05 AM
 
Location: Central Massachusetts
4,800 posts, read 4,857,647 times
Reputation: 6379
I will agree with Frank here. There is some good advice from a lot of sources to include your Fidelity. Yes Annuities have a cost to them but they also have their uses. For some circumstances they are just the ticket. I think in your case that an annuity could work well keeping a steady flow. As lenora mentioned check into disability for DH. It is certainly worth looking into.
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Old 05-29-2014, 06:04 AM
 
Location: western East Roman Empire
6,638 posts, read 10,692,938 times
Reputation: 5828
Quote:
Originally Posted by FrankMiller View Post
Lots of good advice in the thread, but one thing I want to point out is that annuities offer not just longevity insurance, but also Rate of Return insurance. You can probably (setting aside longevity issues) earn more with a balanced investment portfolio, but even AAA bonds have a (small) possibility of principal loss. Annuities offer a variety of rate guarantees, which is part of what you're paying for with the less favorable fees/expected returns.
I am late to the party here, but annuities also offer asset protection, especially in certain states like Texas and Florida, at a price that could be much lower than setting up an irrevocable or offshore trust, and fewer tax complications, plus all the other insurance benefits. To be sure, at least an A rated insurance company.

Again, this is not a total return investment, but conservative money and income insurance, including in some cases civil tort insurance, on a portion of one's total assets.

In some circumstances, all that may be worth, say, a 3% total net return over a number of years. Or possibly more if there is an index component, compared to, say, municipal bonds which have no potential upside.
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Old 05-30-2014, 04:12 AM
 
Location: Mount Airy, Maryland
10,485 posts, read 5,947,197 times
Reputation: 16194
Quote:
Originally Posted by rjm1cc View Post
From your post it seems that you have good insight into the problem.

I would postpone Ss as long as possible as the 8% inflation adjusted increase in income is a good safety net, especially as you get older. Consider the money you did not receive from Ss as the cost of an annuity and compare that to what your advisor recommends. Ask what his commission is.


I think you should price annuities on line to compare. Since interest rates are low I think I would postpone buying now.
Again the 8% increase is only after FRA. From 62 to that point the increase is more like 5-6%
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Old 05-30-2014, 04:00 PM
 
Location: Northern panhandle WV
3,007 posts, read 2,178,014 times
Reputation: 6696
Quote:
Originally Posted by DaveinMtAiry View Post
Again the 8% increase is only after FRA. From 62 to that point the increase is more like 5-6%
glad you pointed that out, is it even that much pre FRA? anyone know the exact amount?
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