Tag Archives: life insurance changes

10 Different Hobbies to Enhance Your Retirement, Part I

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Whenever prospective, hopeful or even the wistful members of the workforce are asked what aspects of retirement they’re looking forward to the most, hobbies consistently rank high on that list. But saying this and actually doing it are two entirely separate things. After devoting the better part of your life to punching the time card at the daily grind, some new retirees just don’t know what to do with themselves now that they have an abundance of what was once a treasured commodity — time. And even if you do have a hobby, you might discover that it’s just not enough to keep you busy or happy during your golden years.
 
Compiled from a number of different studies and articles, I’ve developed the following list of ten hobbies or activities that may appeal to you as pleasant ways to wile-away your retirement years. Some of these hobbies are meant for relaxation, others to challenge the mind or the body, some are meant to make a difference in the lives of others, and some are simply to create amazing new memories and experiences.
 
1. Traveling

Surely there are many places on this vast earth that have long appealed to you. But with short vacation times and workplace stress, many Americans don’t have the time or money to travel during their working years. Retirement is your chance to get out and explore! Based on your budget, a fun way to begin your adventures is to mark destinations of interest on a map of the U.S. or the world with pins. You can either plan a grand adventure and follow your pins in a logical order, or visit locales at your own pace, and even make a game out of choosing your next destination — think of it as a kind of reverse pin-the-tail-on-the-donkey.
 
2. Teaching

If you find yourself missing work, consider teaching the next generation your knowledge and skills. Imparting this valuable information often brings immense satisfaction, as you are making a personal investment in the future. Everybody wants to hear the tips and tricks of the trade from the experts who’ve been there, and that’s you.
 
3. Collecting

Did you start a stamp collection as a teenager that never really got much further after “real life” set in, or have you always longed to become a numismatist? Now is the time to revisit those old passions and rekindle your efforts. Whether it’s stamps, coins, baseball cards, rare books or maps, or anything else that tickles your fancy, having the time to focus on and add to these collections can bring a new depth to retirement.
 
4. Volunteering

Why not devote your time to a great cause? You’d be surprised how many volunteers are needed for any number of charities of associations, so finding a cause to suit your personality and desires shouldn’t be a problem. For help finding just the right volunteer opportunity in your area, I suggest visiting www.VolunteerMatch.org. This site allows you to choose from a number of topics that interest you, and then performs a search to provide you with an impressive list of volunteer opportunities in your area. Pick one and offer it the one thing more valuable than money — your time.
 
5. Puzzles and Games

Without the day-to-day stimulation of the workplace, many retirees feel as though they’re losing their once razor-sharp acumen. That’s most likely not the case; rather, your brain just needs more stimulation to stay healthy and sharp. Everything from Scrabble to Soduku to good-old-fashioned Memory can help to engage your mind in positive and fun ways. And, of course, what’s more fun than a game night with friends? Break out the Trivial Pursuit, chessboard, Boggle, or Monopoly and inject a bit of competition to really enthuse your guests — and get them thinking.
 
In Part II of this article, we’ll explore even more hobbies that could grab your interest and make the retirement phase of your life exciting in new ways you may never have imagined.
 
Sources:

Catalogs.com: Top 10 Hobbies for Retirees, http://www.catalogs.com/info/bestof/top-10-hobbies-for-retirees
 
Investopedia: 8 Affordable Retirement Hobbies, http://www.investopedia.com/financial-edge/0312/8-affordable-retirement-hobbies.aspx
 
LovetoKnow Senior Citizens:Ten Hobbies for Retirees, http://seniors.lovetoknow.com/Ten_Hobbies_for_Retirees
 
Marketwatch: Top 10 most desired retirement activities, http://www.marketwatch.com/story/top-10-most-desired-retirement-activities
 
Investopedia: Retirement Hobbies that Make Money, http://www.investopedia.com/financial-edge/0712/retirement-hobbies-that-make-money.aspx
 
Image courtesy of: morguefile.com  http://mrg.bz/3gDkpu


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Make Sure That You’re Covered Long-Term

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We’ve all heard the horror stories about the investor who did everything right, who had the right job, maxed out their 401k, diversified their portfolio until comfort in retirement was assured, only to have the rug swept out by a debilitating illness.  For this exact reason, insurance companies have created a product called long-term-care insurance.

 

Since Medicare doesn’t pay for most nursing home costs, and Medicaid doesn’t ante up until your assets are almost depleted, investors who have wealth that they want to pass on to loved ones need to protect it.  Long-term-care policies do just that, In fact, many insurance agents will tell you that as you near retirement age, long-term-care insurance becomes a real priority.  That priority was much easier to satisfy before the policies became losers for the insurance companies, leading insurers like Manulife Financial to ask state regulators for average rate increases of 40%, and other insurers like MetLife, to stop selling new policies entirely.

 

As baby boomers who already have long-term-care insurance get older and file more claims the premiums are bound to continue to rise, and if you get into a difficult financial spot and let your policy lapse you’ve lost your entire investment. So, what are the options for someone who wants to protect themselves, but doesn’t want to get skinned doing it?

 

What are your options

First, it’s important to deal with an insurance agent who is knowledgeable in the products that he is selling, and is able to explain the options of different policies and the merits of each.  There is a huge price range across different providers, and agents who only sell one product aren’t going to be able to give you the benefits of that variety.

 

As the premiums for long-term-care climb, many providers are addressing the rise in cost by offering custom options.  For instance, instead of unlimited coverage, you can shave some money off your premiums by limiting care to three or four years. According to the Centers for Disease Control and Prevention (www.cdc.gov/nchs/data/databriefs/db91.pdf) the median stay in a nursing home is 671 days.

 

So, cutting down on the stay that you’re allowed could be a smart option for limiting costs.  Some policies also allow you to reduce the annual inflation adjustment from 5 to 3 percent to cut those costs even more.

 

Options in insurance

Another option for investors who are unable to get long-term-care insurance, or find the costs too prohibitive, are the new, combo products being offered by insurers like Hartford Financial Services group, Prudential Financial, and MetLife.  These permanent life policies and annuities feature accelerated death benefits, or living benefit riders.

 

What this means to you is that the death benefit of these life insurance policies can be tapped in the event of a diagnosis of chronic illness, and used to pay for care. Many investors like these policies because, unlike traditional long-term-care coverage, if you never need the care, the policy will pay your heirs just like a traditional life insurance policy.  The living benefits of the combo products are usually limited to the death benefit for the policy, though, whereas long-term-care policies will pay all qualified expenses for whatever duration of stay the policy covers.
The decision between these two flavors of insurance is a personal one, but for investors who want to feel safe in their retirement, and who want to make sure that the fruits of their hard work can be passed down to their loved ones, some type of coverage is important.  Talk to your financial advisor to see which one gets you closer to your retirement goals.


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Life Insurance Ain’t What It Used to Be

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It Isn’t Your Parent’s Kind of Life Insurance

 

Life Insurance, like medicine and technology, has evolved to the extent that it hardly resembles what it looked like just a decade ago. The basics have remained the same, a death benefit, premiums, and an inside cash value that accumulates over time. What has dramatically changed is the way in which cash values earn return. The latest generation of “index linked” policies combine the security of guaranteed cash values with interest linked to a stock market index. Let’s revisit the changes that have occurred over the past decade.

 

The history of the change goes back into the mid 1990’s in the annuity industry. Prior to this time, investors interested in tax deferred annuities had two choices available. Fixed annuities offered a guaranteed principal with interest rates determined by the insurance companies. Variable annuities used market based sub accounts, similar to mutual funds which offered higher growth potential but no guarantees to the principal. The first Equity Indexed annuities (EIA) offered principal guarantees like fixed annuities while the return was tied to a market index like the S&P 500 or the Dow. The expectation was that over time, the indexed linked returns would out perform fixed rate annuities with no risk to losing principal.

 

The history of cash value life insurance policies has been quite similar to that of annuities. The original form of whole life insurance offered fixed premiums and guaranteed cash values which grew over time. In the 1980’s variable universal life policies were introduced that tied the growth of the cash values to mutual fund based sub accounts. Returns were potentially higher but without any guarantee of principal. Market downturns caused investors to be wary of losing the cash values of life insurance as this could put the death benefit at risk.

 

Like the evolving of the EIA, the Equity Indexed Universal Life (EIUL) offers unique advantages to the policyholder. Premiums are flexible which allow investors to increase deposits into the cash value side without increasing death benefits. Sophisticated market indexes credit higher returns than similar equity indexed annuities. Principal guarantees offer protection against market losses. Truly, this “state of the art” innovation has made life insurance the investment of choice for many accumulators.

 

Find all of this a bit confusing? That’s where an experienced professional can help you sort through all the complexity and guide you. Contact us today with your questions.

 


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