Thirty nine percent of those recently surveyed by Nationwide Insurance don’t know at what age they’re eligible to receive full Social Security benefits, and 70% said they wish they knew more about this complex topic. In general, if you don’t need Social Security income to make ends meet, there are huge advantages for delaying your benefits as long as possible. For every year past the minimum retirement age of 62 you wait, up to age 70, you’ll receive an 8% increase in payments. And if you wait until your full retirement age (65-67 depending on the year you were born) your benefits won’t get cut if you’re still working and earn over a certain amount. Unfortunately, these scenarios become more complicated at the household level. For example, if you and your spouse were born before 1954, you may be able to claim spousal benefits. If you’re divorced you may or may not be able to claim some of your ex-spouse’s benefits.  And if your annual income is above a certain level, between 50%-85% of your benefits may be subject to federal taxes. It’s critical to view any Social Security scenario within the context of your overall life expectancy and retirement planning strategy, which should consider projected future expenses—including Medicare and long-term care costs--and additional income from part-time work, pensions, 401(k) plans and IRAs. Given the complexity of these issues, you may want to work with a fee-only financial advisor who can help you make more holistic retirement planning decisions. However, it’s important for the advisor to fully understand the rules around Social Security and Medicare. If they don’t, they should have access to accredited professionals who can help them—and you—make these critical decisions.

For further research: 

• Next Avenue, Where to Get Help to Claim Social Security Wisely
• Terrysavage.com, Social Security Timing
• Livingto100.com: Use this site to estimate your life expectancy.
• Social Security Administration: Get basic information on Social Security and set up a My Social Security account that can help you estimate your future benefits based on your earning history.
• Laurence J. Kotlikoff: Author of Get What's Yours: The Secrets to Maxing Out Your Social Security and the Maximize My Social Security tool.
• National Association of Registered Social Security Analysts; National Social Security Association;  Corporation for Social Security Claiming Strategies: Three educational organizations that offer professional credentials for professionals who wish to advise clients on Social Security and Medicare issues.

The easing of the COVD-19 pandemic, increased consumer spending, supply shortages and continued government stimulus have resulted in the highest inflation rate since 1992. People are feeling its effects at the gas pump, at the supermarket, at car dealerships, at building supply companies and when they make hotel and airline reservations. But will inflation continue indefinitely, or even rise to the record levels of the early 1980s? Most economics believe it won’t. They predict that inflation will level off after consumers get their pent-up spending out of their systems, supply chain issues are resolved and pandemic-related stimulus spending eases. The Federal Reserve is keeping a close eye on inflation and is likely to increase interest rates and tighten the money supply if it sees inflation rising much beyond its target 2% annual rate.

While inflation does affect consumers’ pocketbooks, it’s important to remember that it’s a symptom of a recovering economy and that the inflation rates you see quoted in the news are year-over-year rates. This means that inflation today is being compared to the same period in 2020, when lockdowns and millions of lost jobs depressed consumer spending. Still, if you’re worried how inflation and rising interest rates could affect your financial security during retirement you may want to see how different rates could affect your current financial and investment plan. When interest rates rise, prices of existing bonds will fall, which means you may want to avoid buying long-term bonds or CDs. You may also want to increase your stock holdings, since, historically, stocks have outperformed inflation by a wide margin. If your mortgage rate is high, you may want to reconsider refinancing at today’s low rates even if this extend your payoff period by a decade or more. If you don’t feel comfortable making these important decisions on your own, consider working with a fee-only fiduciary investment adviser. They can stress-test your entire financial picture against various inflation scenarios and suggest actions you may want to take to reduce its potential impact.

For further research: 

Next Avenue, Inflation and You: 8 Tips for Your Finances

Terrysavage.com, Where’s Inflation?

According to a new investor study from Ascent, 50 million Americans are likely to make their first investments in cryptocurrencies in the next year. The skyrocketing popularity of Bitcoin and other cryptocurrencies has convinced even former skeptics such as Warren Buffett that these digital currencies should be taken seriously. One reason why many doubters are becoming believers is because of the transformative blockchain technology that underlies cryptocurrency transactions. Blockchains are databases that record all transactions in a way that anyone can see and no one can delete or change, bypassing the need for banks, brokerage companies, or even advisors to serve as the middleperson for these transactions. Blockchains have become such a legitimate technology for digital transactions that even the U.S. government is now thinking issuing digital dollars at some point in time.

However, it’s important to remember that the reliability and transparency of Blockchain in no way lessen the highly speculative and unregulated nature of cryptocurrency trading. Those who are thinking about investing in any of the thousands of cryptocurrencies available may want to limit the amount of money they invest and treat it as a gambling activity—meaning they should be prepared to lose everything. Those starting out should stick with known cryptocurrencies like Bitcoin and Ethereum and use established exchanges like Coinbase and Kraken to trade them. Those who don’t feel comfortable purchasing cryptocurrencies directly may want to consider investing in exchange traded funds that invest in these digital currencies.

For further research:

• Next Avenue, Cryptocurrency 101: All You Really Need to Know 
• Terrysavage.com: Bitcoin Basics 
• Ascent’s What Do Americans Think About Cryptocurrency? 2021 Study. 
• Coinbase and Kraken: Two apps that let people purchase Bitcoin, Ethereum and other cryptocurrencies directly.

93-year old Beverley Schottenstein trusted her grandsons to handle her $80 million investment account at JP Morgan but learned later, both the brokerage and her grandsons had made millions cheating her. Find out how in Part 2.

For further research:

NextAvenue, The Grandmother Who Won Her Elder Fraud Case Against Her Grandsons

Beverley Schottenstein is the matriarch of a billion dollar family empire. At age 93, she went into battle against one of the biggest banks in the world... and her own grandsons to teach them the lesson of their lives about much more than money.

For further research:

Twisted: Conflict, Madness, and the Redemptive Power of a Granddaughter’s Love

Only 17% of low and moderate-income adults aged 50 or older believe they are in good financial health, according to research from the Financial Health Network. Many of these people don’t have enough income or assets to work with a financial planner. This leaves them with many unanswered questions about how to manage their income and reduce their debts during retirement, how to choose Medicare coverage, and when they should start taking Social Security benefits. While robo-advisors can help people make smarter decisions about investing, these apps don’t address personalized financial planning advice. And while there still isn’t a single app that addresses all of these issues, there are many low-cost solutions that can address some of them, many of which also offer access to human assistance.

For further research:

• Livingto100: Use this site to estimate your life expectancy based on your
• Albert: An online bank that also offers tools to help retirees with saving and investing plus access to human experts.
• Silvur: Use this app to help you make smarter decisions about Medicare, Social Security, and spending during retirement.
• Retirable: Enables retirees to create a free retirement roadmap, identify gaps, and an action plan for achieving financial peace of mind.
• Youneedabudget (YNAB). This low-cost app helps people learn how to create a budget, and allocate their money to pay for everyday expenses, reduce debt, and save more for emergency funds and retirement.
• National Association for Credit Counseling: This nonprofit organization provides access to counselors who can help people in debt negotiate more favorable terms with their creditors.
• Weathramp: For those who have decided that they need professional help to solve their complex financial issues, this free service can match them a fully vetted, fee-only fiduciary financial adviser in their area.

According to the Employee Benefit Research Institute 2021 Retirement Confidence Survey, more than half of workers and a third of retirees said that debt was a major problem in their household. Too much debt can negatively impact your credit score, which banks and other lenders use to determine whether to approve your credit card or loan request and how much interest you’ll pay. That’s why it’s important to check on your creditworthiness on a regular basis. You’re entitled to receive one free credit report per year from each of the three main credit reporting agencies—Equifax, Experian and Transunion. Through April 2022, you can also receive free credit reports every week from these agencies. These reports will include your current FICO credit score, which is based on how much total debt you owe, your on-time payment record, and how long you’ve held different loans and credit cards. Any credit score above 700 is considered to be very good. Your credit score can change on a weekly basis, and the best way to raise it is by reducing your outstanding debt balances and making on-time payments. Another good reason to check your credit reports on a regular basis is to identify any errors that may negatively impact your score or to make sure that identity thieves haven’t opened fraudulent accounts under your name. To prevent future fraud, you can place a credit freeze through all three credit reporting agencies. This will prevent criminals from being able to open credit cards or loans using your stolen personal information, and you can “unfreeze” at any time. To help your children begin to establish their credit history without falling into a debt quagmire, encourage them to apply for a credit card with a low credit limit or one that’s secured by a deposit. And if you’re planning to co-sign a loan for a child or a relative, make sure you monitor their payments, since their delinquency will negatively impact your credit score. 

For further research: 

• NextAvenue, The Troubling News on Credit Scores and Credit Reports 
• Terrysavage.com, Credit Score Can Improve 
• Request separate credit reports or a credit freeze from the three credit reporting agencies: Equifax, Experian, and Transunion 
• Annualcreditreport.com: Request yearly or weekly credit reports from the three credit reporting agencies 
• Creditkarma.com: Get free credit scores and find credit cards for students or those with no credit history  
• Gerridetweiler.com: Get answers to your credit questions from a nationally known expert on debt and financing issues.

Most retirees want to live independently as long as possible. But it’s important to have realistic expectations of what you’ll be able to do on your own as you grow older. According to a University of Michigan survey of 8,000 seniors, 31% of respondents between the ages of 80-89 said they could live independently. That number dropped to just 4% for those over 90. If you’re hoping to live independently by staying in your home—or moving to a condo or townhouse in a retirement community—you’ll need to think about how you may eventually need to adapt your dwelling to accommodate physical limitations that naturally occur as you age. Fortunately, there are plenty of companies that specialize in installing stairlifts and making bedrooms and bathrooms wheelchair accessible. Mobile devices and smart-home technologies make it easier to get immediate help if an emergency occurs. If you’re living on your own, it’s also important to develop and maintain a multi-tiered social network of people who can help you—and whom you can help in return. Family, friends, neighbors and members of your house of worship can all play different roles in this network. Try also to build strong, mutually beneficial relationships with one or two younger people who are willing to help you during emergency situations. And make sure to formally designate people you trust to serve as your financial and healthcare proxies if and when you’re no longer able to make these critical decisions on your own.

For further research:  

• Kim Curtis, Retirement Secrets: Keys to Retiring Happy, Healthy & Free
• Next Avenue, 3 Best Ways to Remain Independent As You Age

According to a recent MetLife survey, 19% of full-time Baby Boomers said they would need to delay retiring because of COVID-19-related financial challenges. However, in the same survey, 12% said that the pandemic had convinced them to retire earlier, citing reasons such as dissatisfaction with their job or “life is too short.”

There’s also a growing movement known as Financial Independence, Retire Early (FIRE). These workers, mostly highly paid Millennials and Generation Zers, are committed to saving and investing as much as possible and paring non-essential spending to the bone so they can retire in their mid-50s or earlier.

Whether you’re hoping to retire in your 50s or plan on working into your 70s, it’s important to evaluate whether you’ll have enough income to last potentially thirty years or more. Start by estimating your life expectancy, which is based on your family history as well as your current physical health and lifestyle habits. Next, consider whether you can delay taking Social Security until age 70, when you’ll earn the maximum benefits. Then calculate how much your 401(k) plan and IRA accounts will be worth at your desired retirement age and estimate how much of an income hit you might take if a bear market drives down the value of your retirement assets by 25% or more when you first start making withdrawals.

If there’s a strong possibility that you won’t have enough income from Social Security and your savings, consider whether it makes sense to invest some of your nest egg in an annuity that will provide guaranteed income for life or if you may need to delay retiring or take on a part-time job after you’ve stop working full-time.

These are complex issues and the cost of making the wrong choices today could threaten your future financial security. To give you greater peace of mind, consider seeking the advice of a fee-only fiduciary financial planner. These professionals can objectively analyze your current and future spending and income sources, your outstanding debts, and the size and holdings in your retirement accounts to provide a realistic assessment of how likely you are to achieve your retirement goals and what you can do to improve your chances.

For further research: 

• Next Avenue, Aspiring to Retire by 55
• Livingto100.com: Use this calculator to estimate your life expectancy

Many retirees allocate 60% or more of their portfolios to bonds, having followed the traditional mantra that fixed income securities are less risky investments than stocks. But what many are finding out is that with interest rates at historically low levels, the bonds they own may not be generating significant income and, in fact, may be hindering, rather than boosting, their portfolio’s total returns.

With money market instruments earning less than 0.5% and most long-term CDs earning less than 2%, the reputation of fixed-income investments as safe and reliable income generators has taken a beating in recent years.

Investors looking for a mix of credit quality and higher yields are having to seek out U.S. government and corporate bonds with maturities of ten years or more. But these long-term bonds carry risks as well. Should economic growth, rising inflation and reduced global demand for U.S. government bonds compel the Federal Reserve to raise interest rates in coming years, this will result in higher interest rates for new bonds and falling prices for existing bonds to make their relative yields more attractive. Long-term bondholders may end up losing money if circumstances require them to sell their bonds.

In this environment, investors may want to play it safer and look for CDs or bonds with maturities of six months to a year. While yields for these short-term securities will be lower compared to those of longer-term bonds, investors won’t have to wait as long (or potentially sell a bond at a loss) to reinvest their principal in higher-yielding bonds that may be available down the road.

If you don’t have the time or desire to buy individual bonds you may be better off investing in short to intermediate-term actively managed bond funds. Their portfolio managers are experts in buying and selling bonds to take advantage of different interest rate environments. But when comparing bond funds with similar characteristics and track records, you should closely scrutinize expenses and management fees. A fund with an annual return of 3% per year and 1.5% in annual fund expenses will deliver a net return for investors that is much lower than a similar fund or EFT that charges 0.75%. If you don’t feel comfortable doing this research on their own, you may wish to work with a fee-only fiduciary investment adviser. These professionals can objectively review your entire portfolio and recommend cost-efficient changes that will make all of your stock and bond investments work harder for your retirement.

For further research: 

• Terrysavage.com, Bond Market Rebellion
• Treasurydirect.gov: This website lets you buy and sell U.S. Treasury securities online.

Clarification: When Terry mentions that during times of rising interest rates when an investor with a long-term bond "is stuck earning a slightly lower yield for the remaining 10 or 15 years or the life of the bond," she means that that this bond's yield will be lower relative to higher yields that may be available from newly issued bonds or existing bonds that are now priced lower. When an investor buys a bond, its yield is locked in and will never rise or fall for as long as they own it.

New research from EMD Serono’s Embracing Carers initiative found that 54% of family caregivers said that the COVID-19 pandemic has worsened their financial health. To help pay for their parent’s medical and living costs, children may have to use money they were saving for retirement or their own children’s higher education. If a caregiver has to quit a full-time job, this may reduce their future Social Security benefits and keep them from saving for their own retirement at work.

There are a number of ways parents and children can work together to ease this financial burden for both sides. First, parents need to help document all of their financial information, including location of assets, titles and deeds, attorney and accountant contact information, and life and burial insurance policies. Before a crisis occurs, parents should assign healthcare and financial power of attorney to their children to allow them to make key decisions when they’re no longer able to able to do so on their own.

Parents should also consider getting long-term care insurance to enable them to receive skilled care in their homes without consuming all of their savings. Some policies can be combined with life insurance to provide death benefits to heirs if the long-term care benefits aren’t used.

Children need to be sensitive in the way they bring up these issues. Start by offering to do small tasks, such as opening their parents’ mail or making sure bills have been paid. When it’s time to make major decisions, frame the discussion as a gift between generations: Children give their time to help their parents deal with declining health, and parents provide the financial support and cooperation to prevent this assistance from becoming a burden. To help sort through these complex issues, parents and children may wish to hire a qualified fee-only fiduciary investment adviser. But it’s important to research their background and licenses to make sure they’re not members of the large community of scammers and criminals who prey on the elderly.

For further research:

• Next Avenue: How Family Caregivers Can Avoid Money Catastrophes 
• Terry Savage’s Personal Financial Organizer can help you comprehensively document your parent’s and your own financial information  
• Carefull.com: Use this app to monitor your parents’ spending, bills, account balances and due dates. 
• AARP: Financial Workbook for Family Caregivers 
• EMD Serono Embracing Carers initiative  
• Investment Adviser Public Disclosure website: Research the licenses and backgrounds of investment advisers