Longevity & Aging

No doubt about it: at some point we’re neither semi-retired, findependent or fully retired. We’re out there in a retirement community or retirement home, and maybe for a few years near the end of this incarnation, some time to reflect on it all in a nursing home. Our Longevity & Aging category features our own unique blog posts, as well as blog feeds from Mark Venning’s ChangeRangers.com and other experts.

A Conversation about CPP

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By Michael J. Wiener

Special to the Findependence Hub

Close Friend:  My wife and I are just a year away from being able to start our CPP benefits when we turn 60.  I’m not sure if we should start them right away or wait until we’re older to get bigger benefits.

Michael James: I don’t usually get involved with giving this kind of advice about people’s specific situations, but you’re a close enough friend that I’ll try to help.  Let’s go through a standard checklist of questions to help you decide.

CF:  Fire away!

Do you need the money?

MJ:  The first question is “Do you need the money?”

CF:  Of course I need money.  What kind of question is that?

MJ:  Hmmm.  You’re right.  That question isn’t very clear.  I think the idea is whether you need CPP benefits to be able to maintain your standard of living.

CF:  Well, I’m retiring in a few months, and I don’t really know what standard of living I can afford.

MJ:  Another good point.  Let’s try to make the question more precise.  If you don’t start your CPP until you’re 65 or 70, will you have less money available to spend before CPP starts than you’ll have after CPP starts?

CF:  I’m not sure.  My wife and I have $600,000 saved in our RRSPs that we could live on during our 60s.

MJ:  That’s more than enough to live on while you wait for larger CPP benefits at 65 or 70.

CF:  Okay, next question.

Life expectancy

MJ:  Do you have a shorter than normal life expectancy?

CF:  My dad died at 82, but my mother and both my wife’s parents are still kicking.  One of my uncles died in his 60s.  Maybe I should take CPP now in case that happens to me.

MJ:  We can all imagine dying young, but it’s more important to make sure you don’t run out of money if you live a long life.  Maybe a better way to phrase the question is “Are you willing to spend down all your savings before you turn 80 because you’re sure you won’t live that long?”

CF:  No, I’m not.

MJ:  So, even though you don’t know how long you’ll live, you’re going to have to use your savings sparingly in case you live a long life.

CF:  Does that mean I should take CPP at 60 so that I won’t spend as much of my savings in my 60s?

MJ:  No, it means the opposite.  When you spend some savings in your 60s, you’re buying a larger guaranteed CPP payment that is indexed to inflation.  You’re taking part of your savings that you spend over exactly 10 years and turn it into an income stream that could last for decades.  By making this choice, you’ll be able to safely spend more money each month starting today.

CF:  I’m starting to see a trend toward taking CPP at 70.

More money while young

MJ:  Let’s see.  The next question here is “Do you want more income available to spend while you’re young?”

CF:  I suppose so.  But can’t I just spend extra from the RRSPs during my 60s to boost my income over the next decade? Continue Reading…

Cultural Guide for Expats

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Panoramic view of Guanajuato City, Mexico. Photos courtesy RetirementLifestyle.com

By Akaisha Kaderli,

RetireEarlyLifestyle.com

Special to the Financial Independence Hub

Recently, the media has been covering the influx of Expats into countries such as Portugal, Thailand, Mexico, Guatemala or Panama. Apparently, this rise of foreigners relocating in these cities and towns have the locals annoyed.

On occasion we even have readers expressing concern about moving from their own country and the possible attitude of the locals that might greet them when they arrive.

Here at Lake Chapala [in Mexico], we have also seen the inpouring of Gringos over the years. For the most part this has been a good thing. However, this influx does change the culture, prices do go up, and many of these “newbies” aren’t bothering to learn any Spanish.

This lack of interest in their newly adopted home country grates on the natives.

What to do?

Learn the local language and customs

Nothing irks a native more than a blissfully ignorant Expat.

Even if all you can muster are the words for “Thank you,” “Please,” and “Good morning” – show some respect for those who have lived in an area all their lives. Make an effort to communicate with them.

There are plenty of language courses online and learning a few local phrases will pay off hugely for you.

No matter where your home country is, this newly adopted place of residence has different customs, holidays, foods and ways of celebration. If you can, embrace them. If you can’t: at least have the cultural awareness not to complain loudly and daily.

Don’t just throw money at a situation, get personally involved

Sunset in Lake Atitlan, Mexico

Expats can be known for simply throwing money at problems instead of becoming involved in a solution.

Now granted, one’s health might prevent you from lifting, bending or standing long hours doing volunteer work. However, find out what your skills are and donate them.

Whether it’s re-homing a rescue pet, teaching English as a second language, or even instructing local children in music or art, that personal contribution is remembered. More importantly, your face and personality will be remembered, and if there is ever any trouble, this is human currency in your favor.

Billy imported an electronic scoreboard for the gymnasium here in Chapala which made him an overnight hero. Then he raised money and built two more tennis courts in the city park.

Needless to say, the fruit of his work is that he is well respected and known in the community.

Please don’t bring your politics and home problems with you

THIS. IS. HUGE.

Somehow for Americans and Canadians, this idea escapes them.

Moving to a foreign country, and then immediately setting about making your new location exactly like the one you just left is simply being tone deaf.

There is no advantage to arguing with other Expats – or the locals – about problems over which you left your own home country to begin with.

Seriously.

Adapt, adjust, get a mitt and get in the game… or go back home.

Your new location isn’t “just like home only cheaper.”

Further developing the idea above, one needs to realize that your new location will never be like where you grew up.

Buying a bigger, better house, utilizing all the services of a gardener and maid, and basically living large without any contribution to the community surrounding you upsets the societal balance. It causes the locals to become resentful of your presence. They don’t like that kind of snobbery where the Expats feel as if they are better, more entitled than the ones who were born there and grew up there.

Connect. This will be your saving grace.

Realize that your presence absolutely changes the local culture.

Unbeknownst to many Expats your presence increases the locals’ cost of living. Continue Reading…

Medical Tourism: a Retiree Health-Care Solution?

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Thailand’s Bumrungrad Hospital, courtesy of RetireEarlyLifestyle.com

 

By Billy and Akaisha Kaderli,

RetireEarlyLifestyle.com

Special to the Financial Independence Hub

From hip replacement, dental procedures to heart surgery, more people are discovering the advantages of traveling abroad for their medical needs.

In just the past few years, medical vacations have gone from a tiny niche market to an impressive growth story with substantial market-share gains.

Hospitals in countries such as Mexico, India, Guatemala, Costa Rica and Thailand are taking advantage of this global trend. And U.S. companies are taking note as well tailoring their corporate health insurance plans to give employees the opportunity to head to India or elsewhere for surgeries such as knee replacements and the more modern, less invasive approach to hip replacement, hip resurfacing.

In the Western Hemisphere, Costa Rica is currently one of the “in” destination for travelers, especially for dental and cosmetic surgery needs. You can schedule online and receive a custom-made package, appointment and prices in your email response.

For years, people in the American Southwest have capitalized on the high-quality dental work available south of the border for a fraction of U.S. prices. Now more people are traveling to Guadalajara in Mexico for body augmentation and other surgeries, too. Many of the doctors there are US-trained, and the equipment is top of the line. (We know, because we’ve used it.)

In Asia, one of the world’s most acclaimed hospitals is located in Bangkok, Thailand. Bumrungrad looks more like a five-star hotel than a medical facility — until you get to the third floor. World leaders from around the globe fly here for medical procedures. Their website is user-friendly, as is its professional, English-speaking staff. The hospital has more than 200 surgeons who are board-certified in the United States. We have quipped many times that the cheapest health care plan is an air ticket to Bangkok.

Also close by is the Bangkok Heart Hospital. Both of these facilities are located in the center of the city, with easy access to shopping and attractions. If necessary, they will arrange your hotel stay along with the medical procedure you’re having performed, all without waiting times or disqualifications. Your entire extensive physical will be done in one morning, with your blood results and consultation that afternoon. In and out in a single day. How’s that for service?

Is it safe?

Many people interested in medical tourism are concerned about the quality and safety of going abroad for technical and complex medical care, and how to get post-operative care once they return home. All of the hospitals mentioned here use the latest equipment and are either internationally accredited facilities or have US- trained physicians on staff. Some U.S. health plans also provide an in-state network of physicians who will treat a patient who’s gone abroad for medical care. The one thing that sets these hospitals apart from many of their U.S. counterparts is their attention to customer service — they are professional and courteous in a way you rarely see any more at home.

For instance, award-winning Fortis Escorts Heart Institute in Delhi and Faridabad, India, manage over 14,500 admissions and 7,200 emergency cases in a year.

India also has top-notch centers for hip and knee replacement, cosmetic surgery, dentistry, bone marrow transplants, and cancer therapy. Virtually all of these clinics are equipped with the latest electronic and medical diagnostic equipment.

Sounds good, but what’s the cost? Continue Reading…

Preparing your Portfolio for Retirement? Income Is so Yesterday

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By Billy and Akaisha Kaderli, RetireEarlyLifestyle.com

Special to the Financial Independence Hub 

When preparing for retirement, designing your portfolio for income is over-rated. Oh, it feels good bragging about how much money you make each year, but then you also quiver about the taxes you owe each April.

What’s the point?

To make it – then give it back – makes no sense.

In today’s interest rate environment people are being forced to adjust their thinking.

Our approach 3 decades ago

When we retired over 32 years ago, having annual income was not on our minds. Knowing we had decades of life-sans-job ahead of us, we wanted to grow our nest egg to outpace inflation and our spending habits as they changed too. Therefore, we invested fully in the S&P 500 Index.

500 solid, well-managed companies

The S&P Index are 500 of the best-managed companies in the United States.

Our financial plan was based on the idea that these solid companies would survive calamities of all sorts and their values would be expressed in higher future stock prices outpacing inflation. After all, these companies are not going to sell their products at losses. Instead they would raise their prices as needed to cover the expenses of both rising resources and wages, thereby producing profits for their shareholders.

How long has Coca-Cola been around? Well over 100 years and the company went public in 1919 when a bottle of Coke cost five cents.

Inflation cannot take credit for all of their stock price growth as they created markets globally and expanded their product line.

This is just one example of the creativity involved in building the American Dream. The people running Coke had a vision and have executed it through the years. Yes, “New Coke” was a flop as well as others, but the point is that they didn’t stop trying to grow because of a setback.

Coca-Cola is just one illustration of thousands of companies adapting to current trends and expanding with a forward vision.

Look at Elon Musk. He has dreams larger than most of us can imagine.

Sell as needed

Another benefit we have in designing our portfolio in this manner, is that when we sell shares for “income,” they are taxed at a more favorable rate as a long-term capital gain. Dividend output is low, our tax liability is minimal, yet our net worth has grown.

We are in control of our income stream.

Our suggestion is not to base your retirement income on income-producing investments but rather to go for growth. You can always sell a few shares to cover your living expenses.

Money Never Sleeps

Just because you retire, your money doesn’t have to.

In the words of Gordon Gecko from the 1987 movie Wall Street, “money never sleeps.” And your money definitely won’t once you leave your job.

Reading financial articles about what if retirees run out of money, we get the impression that the authors do not understand that once retired, your money can – and should – continue to work for you.

Working smart not hard

Once you walk out of the 9-5 for the last time, that doesn’t mean your investments are frozen at that point. The stock market is still functioning and now your “job” is to become your own personal financial manager. Actually, you should have been doing this all along, but if not, start now.

You need to get control of your expenses by tracking your spending daily, as well as annually. This is so easy – only taking minutes a day – and this will open your eyes as to where your money is going. Not only that, but it will give you great confidence to manage your financial future. Every business tracks expenses and you need to do the same. You are the Chief Financial Officer of your retirement.

The day we retired the S&P 500 index closed at 312.49. This equates to a better than 10% annual return including dividends. We know that we have stated this before, but it’s important.

Chart of S&P Market Returns January, 1991 to September 2022

That’s pretty good for sitting on the beach working on my tan.

Making 10% on our portfolio annually while spending less than 4% of our net worth has allowed our finances to grow, while we continue to run around the globe searching for unique and unusual places.

But what if you’re fifty?

You need to take stock of your assets and determine what your net worth is, with and without the equity in your home. Selling the house and downsizing may be a windfall for you, again utilizing the tax code to your benefit. Continue Reading…

10 Tips to help save Money on Healthcare Expenses

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From taking advantage of tax deductions to keeping a healthy sleep schedule, here are the 10 answers to the question, “What are some tips to help save money on personal healthcare expenses?”

  • Take Advantage of Tax Deductions
  • Keep a Healthy Diet
  • Opt For Services In Your Network 
  • Save With Pre-Tax Accounts
  • Ask Questions and Advocate for Yourself
  • Get Robust Health Insurance
  • Compare Quotes to Get the Best Deals
  • Buy Generic Drugs
  • Use Free Screenings
  • Just Sleep It Off

Take Advantage of Tax Deductions

Make sure you are taking advantage of the tax deductions you are eligible for when paying for your healthcare. These include deducting the costs of your health insurance premiums, medical expenses, and dependent care expenses. You can also deduct the costs of travel for medical care and the cost of child care for medical appointments. 

While the healthcare costs are high, you can save money by simply keeping track of the expenses you are already paying and ensuring you itemize your deductions to get the most out of them. –– Matthew Ramirez, CEO, Rephrasely

Keep a Healthy Diet 

Invest in quality nutrition now to save money on health care later. Many people give in to the convenience and comfort of fast food, but it really shouldn’t be a regular part of anyone’s life. Eating whole, colorful foods is the best way to keep your body healthy, and yes: it can be quite expensive to eat healthily.

While organic produce, free-range eggs and meats with no added hormones may bump up your grocery bill, it’s far less expensive than managing a chronic condition like diabetes or cardiovascular disease. My best advice is to take care of your body now so you can save money on health care expenses later. — Jae Pak, MD, Jae Pak MD Medical

Opt for Services in your Network 

Finding strategies to pay for medical expenses without going bankrupt is a daily effort for persons with chronic diseases and long-term treatment demands. Fortunately, the news is not all negative. 

The clever consumer may find big discounts in many typical healthcare circumstances if they know where to search. It is tempting to visit the first care facility with an open appointment when you’re feeling under the weather. However, the costs of various provider alternatives vary. 

Do you need to go to an emergency room? You may see physicians who are in-network or out-of-network depending on your health insurance. Because in-network providers have an agreement with your health plan, you pay less to see them. This translates into reduced prices. — Isaac Robertson, Fitness Trainer & Co-Founder, Total Shape

Save with Pre-Tax Accounts 

Using Health Savings Accounts (HSAs) or Flexible Savings Accounts (FSAs) is a great way to save money on healthcare expenses. You can put money into an HSA or FSA each year and use it to pay for qualified medical expenses, including doctor visits, prescription, and over-the-counter drugs, home medical supplies, and even mental health services. 

These accounts can cover a variety of personal daily products related to first aid, feminine care, family planning, skincare (such as acne treatment and sunscreen), respiratory health, and pain relief. 

The money you put into an HSA or FSA is not taxed, and any money you spend on qualified medical expenses is not taxed either. You can use the money in your HSA or FSA to pay for medical expenses, even if a health plan does not cover you. — Michaela Ramirez, MD, Founder, O My Gulay

Ask Questions and Advocate for Yourself

Sometimes being in a healthcare setting can be overwhelming, especially if you aren’t feeling your best. However, it’s important not to get railroaded into agreeing to things that don’t serve you in the long run. 

For example, a medical professional may suggest a test, treatment, or procedure which you’re uncertain you can afford. Don’t be afraid to ask questions. Why is this necessary? Is there a cheaper alternative? 

Make sure you’re informed about all your options before agreeing to anything. There can be pressure to make snap decisions, but this is your health, nobody else’s. 

“Can I just take a moment to consider this?” is a great phrase to use in order to gain some breathing space. If a medication is recommended, it’s always worth asking whether there is a generic equivalent. These are often cheaper than brand-name products and just as effective. A curious, considered, and calm approach should help you make the best choices. — Alex Mastin, CEO & Founder, Home Grounds

Get Robust Health Insurance

One of the best ways to save money on personal healthcare expenses is to have a robust health insurance plan. Many people think health insurance plans with low premiums are workable. But that’s not true. 

Health insurance plans with low premiums come with other liabilities. They have higher deductibles, and you may get a higher co-pay. Also, low-premium plans don’t cover many things. These plans don’t include particular procedures or tests. 

As a result, your medical expenses can get out of control. Sometimes health plans offer discounts and valuable services. They deliver services that give a boost to your health. You can get all the details from the health insurance company or your health insurance card. — Sean Harris, Managing Editor, FamilyDestinationsGuide

Compare Quotes to get the Best Deals

One great tip that has increased my savings on personal healthcare expenses is to compare the costs of service providers. 

When I was shopping around for a primary care physician, I called various medical offices and asked about their appointment fees. Even though each office listed different pricing, one stood out because it was lower than the other options. 

By taking the time to shop around, I could save money in the long run. Compare-and-save strategies can be used not only with doctors but also with many other areas of healthcare, such as medications and lab tests.  Continue Reading…