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.

Launch - How to Get Your Kids through College Debt-free and Into Jobs They Love Afterward - Book Notes

This week I've been going through books I checked out of the library. One that I found helpful was Launch - How to Get Your Kids through College Debt-free and Into Jobs They Love Afterward by Jeannie Burlowski. This would have been a great book to read about 4 or 5 years ago because there are suggestions for each grade level from middle school to high school.

Some things I found interesting or helpful from the book include:

- Before the age of 24, the prefrontal cortex of your child's brain is not sufficiently developed to be able to succeed at large-scale tasks that require high-level evaluation of risk and preparation for the future. College financing is an adult task, and doing it for your child will be one of the greatest gifts you can give her as she launches into adulthood.

- Dave Ramsey recommends not paying the highest interest debts first. Rather, knock off the easier debts. You'll start to see results and you will start to win in debt reduction. 

- Save money until you have 3-6 months of expenses saved for unforeseen family emergencies. 

- Provide for your retirement every month.

- Success in school and in life really has little to do with brains or luck and everything to do with organization, process management, and continuing to try hard every day.

- Encourage daughters to open a Roth IRA. Put a little money each year into a Roth IRA account. Any money put aside won't be counted on the financial aid forms. After five years go by, she'll be able to take up to $10,000 tax-free and penalty-free out of the account and use it toward a down payment on a house. She can also leave it in the account and use it for retirement.

- Brainstorm with your child about what she will do this year to help the humanitarian cause she's adopted as her own. Make a plan and schedule it. Add what she does on LinkedIn. Look at "Eagle Scout Service Projects" and modify one of those to fit her humanitarian cause. 

- After December 31 of their sophomore year of high school, students should reduce their work time and instead do volunteer work and job shadowing. FAFSA will look at how much teens earn and will start reducing their potential to receive free money financial aid for college.

- Start a business with 100 or fewer employees and invest money in that. Do this by October 1st of your child's senior year of high school. 

- Put extra money in retirement. They will never be counted as your asset on any financial aid form. Do this also by October 1st of your child's senior year of high school.

- Don't fill your bank accounts with a lot of extra income starting January 1st of your youngest child's sophomore year of college. You can also pay your child's future college bills in advance. See how much a college will allow.

- Child should continue with one special extracurricular activity she's planning to stick with throughout high school. 

- Have your daughter look for a discounted community college class that she can take in the summer. 

- Do these assessments: StrengthsFinder 2.0, Strong Interest Inventory, and Myers-Briggs Type Indicator

- Look at safety numbers for each college.

- Do college visits during sophomore and junior years of high school. Parents and students should make the visits together.

- Apply for ten private scholarships every summer and every summer through college and graduate school.

- Update LinkedIn profile regularly. Include work experiences, job-shadowing experiences, and volunteer and service hours. Link to more of her parents' friends, her employers, and others.

- Do job-shadowing in one or more of the career fields that look exciting to a student. Do this for a day, a week, a few hours a week, or for months. 

- Write one good, strong, college application essay two months before the end of 11th grade. 

- Write down the names of 3-4 adults she could ask to write letters of recommendation for the college and scholarship applications she'll be submitting in her senior year. 

- Type a "dream sheet" of details she would love to have mentioned in each of her letters of recommendation. 

- Send a handwritten thank-you note to all of her recommenders. Include a $10 gift card to a store that sells practical items.

- After the summer of 11th grade, she can earn a maximum of $6,000-7,000 without compromising her financial aid eligibility. 

- In January of senior year, send an update letter to the admissions department of each college that she has applied to.

- Organize something big to serve the community in the summer before senior year and during senior year. 

- On October 1st, fill out the FAFSA form. About a week before then get an FSA ID so you are ready on October 1st to fill out the form.

- Adjust things about your family finances so that you don't accidentally appear wealthier than you are on this year's FAFSA form. 

- Be sure to preserve an emergency fund as a safety net just in case there are unexpected expenses over the next 3-6 months. 

- Pay in advance for a needed home remodel (e.g., windows, appliances)

- Use your available extra cash to pay down high-interest consumer debt.

- Plan a special family vacation for the summer after your child graduates from high school. Close, family memories will give your high school graduate a stable platform from which to launch into adult life. 

- Do not announce where your child is going until all the financial aid award letters have also arrived. Do not make any final college decisions until you've received financial aid award letters from all of your child's accepting colleges. Examine them individually and side by side. 

- Confirm with colleges that if a student receives a scholarship that it doesn't reduce other college scholarships/financial aid. Confirm that awards are for all four years - not just the first year.

- Do not take out any Parent PLUS Loans. Ask what alternatives the student has. 

- The Federal Direct Student Loan administered under the William D. Ford Federal Direct Loan Program allows the future possibility of public service loan forgiveness (PSLF). She can have all of her student loans forgiven just 10 years after college in exchange for making 120 on-time payments while working 30 hours a week or more in a profession that serves the community or the world (e.g., public librarian, tax-exempt charity).

- Squirrel extra cash away in retirement accounts.

- Make all your usual monthly purchases right before you fill out the FAFSA form. Make an extra payment on your home mortgage. Reduce the available cash sitting in your savings accounts, checking accounts, CDs, etc.

- See how much money your daughter has in her accounts in her name (not including the 529 and retirement plan). They will reduce her need-based financial aid by 20% of that amount. 

- Get rid of student loans before the college graduation date by applying for more private scholarships. 

- Have a thoughtful conversation with your child about what's going to happen with her high school graduation gift money. 

- By May 1st tell the winning college yes.

- Parents need to take care of themselves, especially after their child's high school graduation. 

- Create a printed thank-you letter with her picture on it and send it to people who've helped her get to college. Talk about the career she's aiming toward, list the colleges she got into and which one she picked, any scholarships she's received. Leave a blank space to handwrite an individual thank you to anyone who gave her a gift. Send this to any special teachers she has had, mentors, pastors, volunteer job supervisors, people she job shadowed, close relatives, people who wrote her letters of recommendation, and others who've helped her.

- Register for college courses at the earliest possible opportunity.

- Make sure that all college credits earned in high school have been officially transferred to her college. 

- Double major for a student who wants to take college classes in a field with lower future income potential (e.g., art, music, humanities). Pair an art degree with a graphic design or web design credential to give more opportunities after college.

- Ask the financial aid office how soon she can apply for her work-study job.

- Every time you receive a bill from the college, check each individual line item. Especially watch for health insurance charges.

- Have your teen buy some nice new clothes for college. Go to upscale consignment stores. 

- Talk to your teen about staying away from alcohol and drugs throughout college. It can prevent a career-destroying addiction, protect her from additional alcohol-related dangers e.g., date rape, assault, sexual assault, death by car crash, contracting an STD, unwanted pregnancy, death due to alcohol poisoning, depression and anxiety, academic failure, and unnecessary heartbreak, sadness, and regret as adults.

- Caution your teen not to post anything, anywhere, that she wouldn't be happy having broadcast in a national news conference.

- Once your daughter steps onto her college campus, she's going to be inundated with enticing credit card offers. It's not credit rating that matters in adult financial life, it's net worth. It's better to have a real job, pay bills on time, and be debt-free. Have her use a debit card instead.

- As your daughter is packing for college, encourage her to take only the basics to dorm move-in day. 

College Admission Essentials - Book Notes

 As Olivia is getting ready to apply to colleges she would like to attend, I am reading some books about the college admission process called College Admission Essentials by Ethan Sawyer. 

Although we have been through this process already with Sophia, there is always something new to learn. This book had some helpful tips; and I was glad that I read it. Below are some things that are relevant to us and I want to remember:

- Admission officers want to know what matters to you - your values.

- Do the Essence Objects Exercise. Imagine a box. In the box is a set of "essence objects" or things that remind you of important moments, relations, or values in your life. 

What's an object that reminds you of home?

- What object makes you feel safe?

- What's something that inspires you?

What's a food that reminds you of your family?

What's a book that changed your life?

What object represents a challenge you've faced?

What's a dream or goal you have for the future?

What's something about you that sometimes surprises people?

Who are you with and what are you doing when you feel most like yourself?

What makes your heart skip a beat?

What brings you joy?

What's hanging on your bedroom walls?

What are you proud of?

What's the last spontaneous thing you did?

What's your earliest memory?

What's an object that reminds you of something that still feels unresolved in your life?

What's an object that represents something you know now that you didn't know five years ago?

What action or gesture represents love to you?

What do you like to do that does not involve technology?

What will you save for your child someday?

What's the most memorable meal you've ever eaten or made?

Is there a book that you are always lending to people?

What do you like to collect?

What have you kept from a trip?

What reminds you of summer?

What's something that people associate with you?

What's your favorite smell? Your favorite thing to look at? Your favorite thing to touch?

- Do the Values Exercise. You'll select 10 values from a list and whittle that down to the most important values.

- Do the Core Memories Exercise. For each of your top five values, write down either a core memory, an image, or an essence object that you associate with each value. 

- Do the Enneagram test.

- Extracurricular activities that you may not have considered: running a small business, photography, bird watching, and online class certifications.

- Things to do during the summer:

-  Take an online course in something that fascinates you. Google "Free and low-cost online courses from top universities."

- Do one good deed a day for thirty days, then blog about it.  

- Shadow relatives or family friends at work.  

- Create your own internship.

- Do research with a local professor. 

- Do the 21 Details Exercise.

- Do the Everything I Want Colleges to Know About Me List. 

- Do the Feelings and Needs Exercise.

- Make a list of the extracurricular activities. Include work and family responsibilities. Refer to this part on the College Essay Guy's website about writing about activities and using a variety of verbs: How to Write a Successful Common App Activities List (collegeessayguy.com)

- List your awards in order of importance. Start with those that mean the most to you personally.

- Include additional details about activities that wouldn't fit in your activities list. See here for more information: How to Use the Common App Additional Information Section: Guide + Examples (collegeessayguy.com)

- In an essay, the focus could be why you're choosing a particular major.  

- Don't use common or obvious adjectives to describe yourself (e.g., adventurous, compassionate, passionate) or adjectives that repeat information that's already clear on your application (e.g., motivated, hardworking, determined).

- Get letters of recommendation from teachers and others who know you. Use this questionnaire to help them write their letters.

- If the college requires an interview, read this section of the College Essay Guy's website.

- All of the special effects people, set dressers, and costume designers in the movie credits are non-famous artists making a living by putting their talents to work.

- The arts are essential to a meaningful life. Sometimes it's obvious like a new musician and sometimes it is subtle like the lighting in a restaurant, a floral arrangement, or a building that makes you want to walk inside. The arts invite us to look at the world differently, to consider other perspectives, and to feel like someone else out there understands you.

- Will the college you are looking at support your creative development? If you like to pour bronze, does the school have a foundry? Ask about research resources - like slide libraries, music archives, and print collections.

- Create a great art portfolio:

- Give yourself time to prepare your portfolio. It can take several months to up to a year to create a portfolio.

- Create more artwork than what the application requires. If it requires 15 artworks, aim to create 30-40.

- Draw from life.

- Include a wide variety of subject matter in your work - figures, self-portraits, still lifes, landscapes, interior spaces, and architectural spaces, character design, abstraction, editorial illustration, typography, urban sketching, poster design, book covers, and more.

- Avoid cliches in your artwork. If you are given a prompt called "time" do not do an image of a watch, clock, or hourglass. Find an uncommon connection.

- Express your own point of view. Express an opinion, narrative, mood, or an emotion. 

- Present your artwork professionally.

- Create using a wide range of media. Drawing with pencil, crayons, conte crayons, markers, soft pastels, oil pastels. Include drawings, photography, paintings, sculptures, mixed media, collages, digial media, animation, printmaking, clay, installation, and more. 

- Use high-quality photographs of your artwork.

- Attend National Portfolio Day. Follow the Facebook page.

- More comprehensive information about pursuing an art major is here.

- Students with learning differences can ask for accommodations including:

- teacher's notes

- note takers

- preferential seating

- use of a calculator

- use of a computer

- breaks as needed

Testing accommodations might include:

- extended time on tests and exams

- test-taking locations with reduced distractions

- use of a calculator or computer

- testing across multiple days

- breaks as needed

- oral examinations

- spell-checker programs

- Develop a self-directed project based on what you care about.

- Connect with what you care about

- Connect your values to a problem that is either local, global, or both. Consider what causes suffering (for you personally, what suffering (by other people) do you react to the strongest, what makes you most afraid for the future, and what you would like to be different in the world.

- Write your vision statement - what your core values are and how you describe the world as you'd like it to be.

- Make your project happen.

- Write about your project in your college application. 

- When comparing financial aid packages, fill out the award letter analyzer.

- Three ways to decide what your heart wants:

- One day - imagine for the next 24 hours you're going to attend School A. Wear a sweatshirt from that school, say to yourself, "I'm going to School A." See how it feels. Repeat with the other schools.

- One hour - create a pro- and con- list. 

- One minute - flip a coin. Heads up you go to one school, tails you to to another. Catch the coin and hide the result. Ask yourself, "Which was I hoping would or wouldn't come up?" Then look at the coin and pay attention to how you feel. 

Websites to Explore

College Essay Guy 

Books to Read

The Brothers Karamazov

Book Review: Paying for College without Going Broke

With 14 and 16 year old daughters, the reality that college is closer than preschool is setting in. How quickly time - and their childhood - has gone by. I have been truly blessed by being able to homeschool them and spend so much of their childhood with them.

Now, it's time to start preparing for their next stage in life: college. I came across a book at the library called Paying for College without Going Broke by Kalman A. Chany and Geoff Martz. It's from The Princeton Review.

There were a lot of helpful suggestions in the book; and I'm happy I read it. I wish I would have read it when they were much younger, though so I could have had a much better college-savings plan in place for both of them.

At any rate, these were some of the things I found most useful for our situation:

What parents can do:

- During the years you are saving for college you should not neglect your other goals, particularly in two important areas: owning your own home...and planning for your retirement.

- While the colleges assess your assets and income, they generally don't assess retirement provisions such as IRAs, 401(k) plans, Keoghs, tax-deferred annuities, etc. Any money you have managed to contribute to a retirement provision will be off-limits to the FAO's at most schools.

- If you have any interest in running a business on the side, this may be the ideal moment to start setting it up. Most businesses show losses during their first few years of operation.

- Colleges now use the tax year two years before college begins (from January 1 of the student's sophomore year of high school to December 31 of the student's junior year in high school) as their basis for deciding what you can afford to pay during freshman year and for the remaining years as well. Thus it would be helpful to remove as much income as possible from this calendar year. (Note: this is the year that we currently are in.)

- During the base year, you may want to pay down your credit card balances...and make the maximum contributions possible to a retirement provision.

Source

- Contact the Minnesota Higher Education Services Office at www.ohe.state.mn.us to get information about state financial aid and any information about affording and paying for a college education. There's a helpful page on the website about paying for college.

- Create a form to track deadlines. The column headlines should be:

====>College

====>Admissions deadline

====>Which standardized need analysis forms (FAFSA, PROFILE) are required? When are they due at the processor?

====>Is there an individual aid form required? If so, when?

====>Are income tax returns required? When? What year(s)?

====>Any other forms required? (Business/farm supplement). When are they due?

====>Name of contact FAO at college and phone number.

What students can do:
- Study like crazy. Because colleges give preferential packaging to good students, every tenth of a point she adds to her grade point average may save her thousands of dollars in loans she won't have to pay back later.
- Coaching can raise a student's SAT score by over 100 points. Every ten points your child raises her score may save your family thousands of dollars.
- Use The Princeton Review's 11 Practice Tests for the SAT and PSAT if a SAT review course isn't in your area or is too expensive.

- Earn credits on the CLEP exams.

Filling out the FAFSA form:
- Use the most up-to-date version of the form. Don't fill out last year's form. Fill out the form for the year that you want to receive aid.

- Know your deadlines. Make sure you find out the financial aid deadlines for the college(s) that your child wants to attend.



*Part of Financially Savvy Saturdays on brokeGIRLrich and Femme Frugality*