JUNE, 2010

How to Stay Healthy in Retirement: Lessons from Dad
by Steve Vernon, FSA
Unless you've been living in a cave for the past twenty years, you've heard about the importance of proper nutrition and exercise to achieve good health, and how those things can potentially save you boatloads of money in retirement.  We all know what to do, but how do you actually go about making important changes in your lifestyle?  Here's one compelling story that's appropriate, given that Father's Day is just around the corner.
 
Please continue reading for this month's selections of the most helpful blogs and articles on retirement that I've found recently.

Will Good Health Save You Money in Retirement or Not?
Take care of your health, and you might save money on medical bills in retirement.  That's the basic assertion of my May 11 post on CBS MoneyWatch, How to Spend Less in Retirement.  But on the same day, fellow CBS MoneyWatch blogger Carla Fried posted Uh-Oh: Good Health Will Cost You More in Retirement.  So what gives? Should you try to stay healthy or not?

"Yes" is my answer to the question, and actually, Carla agrees with this conclusion, if at least to better enjoy her own retirement!  But what about the apparent contradiction of these two posts regarding the costs of health care?  Does taking care of your health have the potential to save you money or not?  Can you live a long time and avoid high costs for medical and long-term care?

Read on to learn how you might be able to achieve this goal, and see the real-life story of one person who did just that.

Do You Want to Be Just Average?
Many retirement investors pursue active investment strategies because they think they can do better than average.  Read this excellent post from fellow CBS MoneyWatch blogger Larry Swedroe to learn why that line of thinking can be a mistake.


Bear Market: Worst May in 70 Years!
According to behavioral finance, the way others frame information can lead us to very different behaviors.  Take the two ways to look at what happened to the stock market in May, for example. 

- Dow Ends Worst May in 70 Years!

- Dow Declines 7.9% but Total Gain Still Over 60% from the Bear

Both headlines are correct, yet the first one is framed in such a way that might make you panic and sell. The second has a much lower emotional appeal, despite being a far more logical way to look at performance over a longer period of time.

Framing information can radically change your actions.  Learn more about the importance of framing information from this recent post from fellow CBS MoneyWatch blogger Allan Roth.


 
15 Year Mortgage: Record Low Can Help Retirement Strategy

The interest rate on a 15-year fixed rate mortgage hit a historic low last week.  That makes it more feasible for anyone closing in on retirement to refinance and know their mortgage will be polished off before they stop working.  In terms of financial stress reduction in retirement, that's a huge win.

Read this post from fellow CBS MoneyWatch blogger Carla Fried to explore an excellent way to manage your housing costs, one of the largest expenses in retirement for most people.


Top Tips for Using Retirement Calculators
Using retirement calculators to get accurate estimates takes some time and effort, and you should prepare yourself for some frustration.  But the results will help you determine just how much money you need for retirement - and how much more you need to save to reach your goal.

I've looked at many retirement calculators and have often been initially confused about how to answer some of the questions or how to interpret the results. I had to poke around for awhile, look at the FAQs or the troubleshooting section, or call the help line before I finally understood how to use the system - and I'm an actuary who specializes in retirement!  So my first words of advice are "hang in there!"  I know it sounds like a lot of work, but it sure beats being wrong and broke at age 80! 

Here are my top tips for correctly using retirement calculators.  Following these tips will help you achieve your financial goals in retirement.


The Real Best Places to Retire
For most people, the choice of where to spend your post-career years is based on many factors, some of them probably contradictory.  (To cite just one potential problem: You'd like to live by your kids, but what if they live in an expensive state?) And the recession may have forced you to re-evaluate your plans. 

To help you sort through a world of options, CBS MoneyWatch has waded through a half-dozen of the popular "Best Places to Retire" lists to see which were the most credible.

Read more here.

The Best and Worst of Retirement
What do retirees say are the best and worst aspects of their retirement?  Find out here.  You'll also discover some suggestions for improving your own retirement.
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Thanks for your interest, and stay tuned for future newsletters that explore how to best live the rest of your life.
 
Best regards,
 





Steve Vernon
Rest-of-Life Communications

P.S. If you think this newsletter will help a friend, please pass it along.
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Just Released

The Second Edition of

Recession-Proof Your Retirement Years

Simple Retirement Planning Strategies That Work Through Thick or Thin

I've updated this popular book to include investment results through the end of 2009 and the latest changes to Social Security.  I've also added about 20 pages of content to cover topics that readers have requested.  It's still short--under 100 pages--so it's easy to follow and easy to finish.  And it still provides a step-by-step program to build reliable sources of retirement income that cover your living expenses and strategies to address the threat of high medical and long-term care expenses.  The book is available for bulk purchase by employers and other organizations, or for individual purchase.  Please see my website for details on all of my books and DVDs.

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Welcome to

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We fulfill a need for trusted, practical strategies that you can use to plan your rest-of-life (aka retirement).  We rely on the latest research and analyses, and we'll keep it simple!  And that's all we provide; we don't sell insurance, investments or health products, so we can "tell it like it is."

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Hour Glass & Money

Steve Vernon has spent 35 years as a consulting actuary, helping large employers design and manage their retirement programs.  Now he's president of Rest-of-Life Communications, where he specializes in providing unbiased, trusted information about retirement.  He also consults to Mercer's US Retirement, Risk and Finance business, and writes a regular column for CBS MoneyWatch titled Money for Life.

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For information on keynote addresses, workshops or presentations on retirement issues, visit Steve's website at www.restoflife.com, or email him at [email protected]

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