The Ultimate Retirement Guide for 50+ (Book Notes)

Being in my mid-50s and having read some of Suze Orman's columns and books, I came across The Ultimate Retirement Guide for 50+. 

There are a lot of good tips which I wish I would have known at a much younger age. She has excellent advice that I can learn from now and that I can share with Sophia and Olivia, even though they are only 18 and 20 years old. 

Below are some of the things I found interesting:

- Fear, shame, and anger are the main obstacles to wealth. They cause youto do the wrong things and miss out on the smart choices that can move us toward our financial goals.

- The only way to conquer fear is through action.

- What I don't think is healthy - emotionally or financially - is when an adult child living in your home doesn't contribute to household costs. This has nothing to do with tough love. This has everything to do with continuing to be the strong, supportive parent who helps guide your children to become their best selves.

- Parents should be directing their money into their retirement savings accounts.

- The money that parents spend on their adult children is money they really should be socking away for their future, yet they can't stop themselves from being the provider. This is an unhealthy financial dynamic.

- Differentiate between financial assistance that helps with kids' needs versus money that funds their wants. 

- Resist co-signing for loans for your adult children. 

- A big problem is the "it's only" syndrome. It's only $100 or $200 a month to help with the rent. It's only an extra $20 a month to keep paying for their cell plan. Add up all the ways, big and small, you continue to provide support to an adult child. See how much "it's only" is costing you every year. 

- A hard no to: helping with a loan for a new car for an adult child, carrying an adult child on your health insurance and cell phone plan, and kicking in money for their vacations.

- If a child needs a car, they should be shopping for a used car that they can pay for with the shortest-term loan possible. 

- If your child is working, they should cover their share of the health premium.

- Consider how reducing your support for others will enable you to achieve your ultimate retirement goals: security and not needing your family to support you later on.

- Make sure you are helping your adult child become financially independent.

- If you reduce your monthly spending by $500 or $1,000 a month today, that's $500 or $1,000 a month you won't need to generate in retirement. 

- Moves to make during your working years:

---Prioritize paying off all debt before you retire.

---Embrace living below your means.

---Save more for retirement...in the right accounts.

---Have a plan to work longer.

---Consider long-term insurance.

- Ditch the landline and use cell phone only.

- Keep FICO score very high keeps auto premiums lower.

- Retirements savings must take precedence over paying for college.

- Spend the least amount you can for a reliable car. If you need to take out a loan, commit to a term that is no longer than 36 months. 

- There are three ways to save money today that you can then use without owing any tax in retirement: a Roth 401(k), a Roth IRA, and Health Savings Account (HSA)

- Plan to work until you are 70.

- Use the Social Security benefit calculator to get an estimate of what you may qualify for: www.ssa.gov/benefits/retirement/estimator.html 

- Visit kerryhannon.com about career transitions and great jobs for those who are 50+ years old.

- Long-term health premiums are lower for those in their 50s and 60s because as you age, a pre-existing health condition could be grounds to deny you coverage. And the longer you wait, the higher your premium will be.

- See suzeorman.com/retirement to learn more about key features to shop for in an LTC insurance policy.

- If you are intent on not moving, make paying off your mortgage before retirement a priority. Tackle remodeling work today that will accommodate the needs of an older version of you.

- If you plan to stay put:

---Pay off the mortgage before you retire. Ideally, pay it off by age 65.

---Be able to pay your essential living costs (e.g., housing, groceries, utilities) guaranteed income (e.g., Social Security, pension payout, an income annuity you purchase at retirement).

---Don't rely on a reverse mortgage to pay the bulk of your expenses.

---Consider whether your home will be socially isolating to an 80+ you.

---Think through whether your home will be physically challenging for an older you (and your friends).

- The steps up to your front door.

- That you must climb stairs to your bedroom

- How you step into the tub to take a shower

- A narrow hall or doorway that doesn't allow a walker or wheelchair through.

- A bedroom on the main floor or a room that can be easily transformed into a bedroom and a bathroom on the main floor with a walk-in shower that has a bench are what allows you to stay in your home longer.

- Look around your home and see how plausible and comfortable it will be to stay in your home if you become ill, arthritic, or injured.

- Changes to make today: better lighting, more light switches, replace throw rugs with wall-to-wall carpet, and professionally-installed grab bars in the bathroom.

- Go to the National Association of Home Builders for their "NAHB aging-in-place remodeling checklist."

- Certified Aging-in-Place Specialist (CAPS) contractors are who you want to do remodeling.

- If you need to borrow money for remodeling, doing it while you are working will be easier to get than when you are retired. Before doing this, you have to look at how much that will eat into your retirement. Moving may just be the best thing you can do to ensure that you have the money you need for your 80s and 90s,

- Contact mortgage lender to ask for an “amortization schedule” that will have your loan paid off by the time you are 65.

- Find more monthly cash flow to put towards your mortgage payment.

- An emergency fund should be large enough to cover your basic living expenses for eight months.

- Aim to spend just 3% of your portfolio in the first year of retirement and then adjust that amount for inflation in subsequent years. 

- Your home is aging too which means more wear and tear on top of the regular maintenance costs. How old are your roof and HVAC system? If your intention is to stay in your home for 20 or more years, the reality is that you will likely have major maintenance expenses.

- Consider what tasks you do today that you might not want to - or be able to - keep doing long into retirement. Snowblowing, gardening, regular housekeeping, and general upkeep.

- A reverse mortgage can create extra income in retirement by using some of your home's equity. The income you receive is tax-free. 

- A reverse mortgage is a bad idea if you need it to cover the majority of your fixed living costs in your 60s and early 70s. Don't use it keep up with rising property tax, insurance, and maintenace; or if you will move in less than 5-10 years. Don't use it for wants (vacations, RVs) or pay off credit card debt. 

- You don't have to repay any of the money on a reverse mortgage while you remain in the house. It is only when you move or die that the borrowed money must be repaid. 

- Think about how your home will work for you when you are 80 or 85. If you can no longer drive or want to drive, is there convenient public transportation, taxis, Uber/Lyft so that you can get around easily? How far do you live from town or friends? 

- In your 60s, keep investing for a long retirement, delay starting Social Security until age 70, and enroll in Medicare and supplemental coverage.

- When one spouse dies, the surviving spouse is entitled to just one Social Security benefit. If you have the high earner delay until age 70, you lock in the highest possible benefit for the surviving spouse.

- Medicare doesn’t cover long-term costs.

- If you don’t have a reliable income stream that can support you for a long life, then you are probably going to make your life and your kids’ lives more difficult.

- Retirement sources that offer guaranteed income: social security, pension, and income annuity that you purchase.

- Focus on a lifetime payout for a guaranteed income. Consider an annuity that will continue at the same level for the surviving spouse.

- Look at deferred income annuities. Buy the annuity today, but don’t start the payouts until a set period of time, such as 5 years or 10 years.

- An income annuity with a cash benefit will pay you a lifetime benefit, but if you die before your total payouts equal the up-front premium you paid, your beneficial will continue to get payments until total payments equal what you paid for the income annuity.

- Do not invest with any company that has any form of a grade with even the letter B.

- Have a separate bear-market emergency fund in retirement that has at least two years of living expenses in it. If you expect that you will not cover all your living expenses from guaranteed income, then keep three years of expenses in super-safe accounts that you can tap whenever you need to and know the money will be there for you.

- Invest equal amounts in five different CDs: 1 year, 2 year, 3 year, 4 year, and 5 year. When the 1 year CD matures, invest it in a new 5 year. You will have a CD maturing each year. That will pay you more interest than if you kept all of your money in a 1-year CD.

- You would need $1 million in order to withdraw $40,000 or 3% in your first year.

- Subtract your current age from 110. That is how much you may want to consider keeping in stocks. Mutual funds accomplish this since they have a variety of stocks in one fund.

- Treasury bonds are the best option for a retirement portfolio. They are the safest type of bonds.

- Must-have documents: a living revocable trust with an incapacity clause; will; advance directive and durable power of attorney for health care; and a financial power of attorney.

- Check all beneficiaries to make sure they are up to date.

- Ask your kids today what they want and spell that out in a will.

- If more than one child wants something, have an open discussion while you are still alive.

- Name an executyor of your will.

- Keep docuemnts in a waterproof and fireproof box that is easy to grab and go at a moment’s notice.

- If the documents are in a bank safe deposit box, make sure the name of trust’s successor trustee (and maybe even one more family member or someone you trust) is also listed on the account.

- Spell out your final wishes. If you don’t want your family to overspend, put that in writing. It will make it so much easier on them.

- Patience and perseverance must prevail in the years to come. When it comes to your money, you have to accept – and expect – that your money will have its ups and downs.