Some people actually have reached financial stability before they retire. Some retire because they are forced into it due to health reasons. Whatever the reason may be, most have not been able to save enough for their retirement. Since there is no work, retirement checks may be too small to cover monthly expenses and bills. This forces the couple to move from their lovely home to a smaller home in order to cope with the expenses.

Lenders have come up with a plan that can help the retired or elderly. Equity release mortgages are solutions for the couple to stay in their home. This also gives you a regular income based on the equity against your property. This is how you qualify for an equity release mortgage. You must be at least 55 – 60 years old and have full ownership of your property. Your property must have an assessed value of £70,000 or more and be in a reasonable condition. Some companies have more criteria for qualifications. If you pass these 2 basic criteria, then you initially qualify for an Equity Release Mortgage. If you think you do not pass the qualifications, there are other options such as investment mortgages like buy to let mortgage. But you can talk to an adviser of what will best suit your needs.

Equity release allows you to use your property equity for the loan. So once you qualify for an equity release mortgage, you may be able to enjoy your retirement better with the extra cash for you to spend. You have given society enough of your time and hard work. Now it is time to enjoy your life to the fullest with your love one.

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Death is a certainty in life and it cannot be stopped from happening. Most of the times, it arrives without any prior intimation and for this reason it is necessary to be prepared for such a scenario.

A Solution For The Elderly

One way elderly people can be prepare for these scenarios is by having a life insurance policy to protect their love ones in the event that they do pass away.  The great part about life insurance is it takes the burden of financial issues off the table and lets them tend to more important issues such as the loss of a loved one.

However one of the issues that many seniors contend with is that they don’t want to have to deal with things like physicals, blood test, EKG’s, and prostate exams.  These things can be overwhelming for seniors.

The solution to this problem is to go with a no medical exam life insurance policy for seniors.  These policies offer the elderly to get a policy without having to go through all the medical issues.  However, they will still have to answer several medical questions in order to approved the process can be much easier to go through in the end.

The Disadvantages

However their are some disadvantages to buying life insurance for the elderly this way.  First off, with a no medical policy you will only be able to get up to $100,000 in coverage in most cases.   In fact the older you are the harder it will be to get more coverage.

The other disadvantage is that you have to consider is the cost of the monthly premium.  With no exam policies you will have to deal with the fact that the cost of the policy will typically be much higher.  In fact, I’ve seen the cost on these polices be as much as a $150 higher than a traditional term life policies.

Final Thoughts…

As a final thought take your time to look at the different types of life insurance out there, medical and no medical exam policies.  Then contact your local insurance agent to see which will be right for your situation.

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The Roth IRA income limits for this year are as follows:

1. Single filers, those who are heads of the families, and those who are married but filing separately provided that the spouses are not living together may be eligible to make a full Roth contributions if their modified adjusted gross income is $107,000. Contributions are phased out starting at $107,000, and they may not be allowed to make contributions if they earn more than $122,000.
2. Joint filers, or married couples, can make full contributions to a Roth IRA if their adjusted gross income is $169,000. Likewise, contributions are phased out starting $169,000, and they could no longer contribute to Roth IRA if their income exceeds $179,000.
3. Married but filing separately, and the spouses are still living together, are not allowed to make contributions to a Roth IRA if their adjusted gross income exceeds $10,000.

As soon as one finds out that his income is within the limitations which are allowed to make contributions to a Roth IRA, it would be best if he opens a Roth IRA right away, because this is the type of IRA plan which is believed to be more advantageous especially when it comes to paying the taxes. Since the contributions to a Roth IRA are taxed right at the time these are made, the Roth account holders have big chances of enjoying tax-free distributions later on. They just need to follow the guidelines that are in accordance with the Roth IRA rules in order to enjoy such benefit.

The account holder must be 59 and 1/2 years of age or older, and the Roth IRA must have been opened for at least 5 years, before a tax-free withdrawal will be allowed. Else, aside from the regular income taxes, an additional 10% penalty will be charged.

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I will add the 2011 numbers as I get them. Also note that in 2010 the income limits to contribute to a ROTH IRA are removed when doing a conversion to a ROTH IRA.

It is obvious that the government hasn’t done much to increase those limits. I am still hearing rumors that they are wanting to get rid of the ROTH IRA loophole, so my advice to you is to max that out if possible, since it is a great tax savings vehicle. Don’t forget that you can contribute to a 2010 ROTH IRA in 2011 prior to April 15th. So even if you haven’t started setting aside your 2010 contributions, you still have about 6 months to get that $5000 in there.

For those of you new to planning for retirement, here is what I recommend:

• Pay into your 401k the required amount to receive your full company match (if your company doesn’t have a 401k match, skip this)
• If you have credit card debt, pay it off!!! (if no credit card debt, skip this)
• Max out a ROTH IRA. Put $5000 after tax dollars into a 2010 ROTH IRA
• Max out your 401k. The current max is $16,500 for 2010
• Save Save Save – Start saving the rest of your extra cash. It is always recommended to have a buffer of 4-6 months of your living expenses saved up in case of unforeseen circumstances, such as job loss, illness, etc.

If you follow those simple steps, you should be on your way to a healthy retirement. Now only if we could get the market and economy to cooperate!!

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This year you can contribute $5000 to your ROTH IRA if your modified adjusted gross income (MAGI) is below $166,000. If you income exceeds $176,000, they you not eligible to contribute to a Roth IRA for 2009.

If your MAGI is between $166,000 and $176,000, then you can contribute some amount less than their full limit. My advice here is to prepare your taxes first using the $5000 contribution, your return will tell you how much overpayment there was. Then subtract that from the $5000, and make that your ROTH contribution. Deposit those funds into your IRA, then file your taxes with that same number.


The jury is still out as to if ROTH IRA’s will be around forever so it makes sense to get in now while it is still good. If you are looking for a good ROTH IRA provider you make check out an ETRADE ROTH IRA. They have a current promotion where you can get $100 free trades when opening a new ROTH IRA by December 31, 2010.

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Note that in 2010 the income limits to contribute to a ROTH IRA are removed when doing a conversion to a ROTH IRA.

Make sure you use the rest of 2008 to max out a ROTH and 401k or 403b if possible. Remeber that investing sooner than later will allow your retirement to grow in the long term. Also consider the fact that since the market is currently down, what better time to buy low and watch it rise!

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They are paying 4.5% APY on their High Yield Savings. You only need a minimum balance of $1. This account also comes with a free debit card for easier access to your funds. If you have more than $50,000 to put away, then move up to their Jumbo Secure Money Market account which is currently paying 4.75% APY.

These rates a very competitive considering the current market. The only requirement is that you are over age 50 and a member of the AARP which will cost you $12.50.

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• 401k – If your company offers a 401k match. Start the saving here. Contribute up to max that will get you the full company match. People, this is free money so take it. So if your company matches you up to a 6% contribution then try as hard as you can to have that 6% contribution rate to get all the free money from the match as possible. This year you can contribute up to $15,500 of your salary to a 401k, but stop at the max that will get you the full company match.
• Roth IRA – If you are eligible to contribute to a Roth IRA then max this out next. This year you can contribute $5,000 to a Roth IRA. The reason that a Roth IRA is attractive is that you put in after tax money, but then when to withdraw from it at retirement time you do not pay taxes on the gains, unlike a 401k that works opposite to this.
• Emergency Fund – This is important. An Emergency Fundis that cushion of money that you are going to have available for unexpected expenses, job loss, etc. Be sure to set enough money aside based on your current financial situation to allow you to live comfortably during a hardship. See my post for thoughts on how much you should save.
• Debt – Ok, so you’ve gotten your all the company match in your 401k as well a decent amount of your own money going into the 401k weekly. You also are going to have $5000 in that Roth IRA this year as well as an emergency fund. Now my advice is to tackle your debt. When I say debt, I mean credit card bills. Pay those off, there is no reason to be paying interest to the credit card companies when you could be saving that money and earning interest on it in a High Yield Savings Account or putting more toward retirement.
• 401k – If you have no credit card debt, now take that extra money and try to max out your 401k. Like I said you can contribute up to $15,500 this year, and over time this is only gonna grow with the market
• Savings – And the last thing would be to start building up the savings that you can use for big purchases. At this point, you can’t feel guilty about spending money since you have really set a side a lot of money in savings and requirement as well as built up that emergency fund.

Again, this really depends on your financial situation. If you are in sever credit card debt, then I would say that you forego the ROTH IRA and start tacking the credit card debt there until it is manageable and then add the ROTH back in. And if you have kids you may think about squeezing in a 529 college savings plan in there as well.

 So I just wanted to lay out the options and ideas that are available and now it is up to you to determine the best way to start saving. I know it isn’t easy to save a lot of money with all your current expenses, but you’d be surprised at over time how much a little savings here and can turn into.

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Here are the contribution limits for 2008 for each retirement plan (401k, ROTH, 403b, and Simple IRA). I also included the 2007 limits as a comparison:

Note that for a ROTH IRA there are certain income limits that start to phase out how much you can contribute. If you are within the phase out range you can only make a partial contribution. If you are above that range then you are not eligible to make a contribution to a ROTH for that year. When you file your taxes it will tell you how much you can contribute based on your adjusted gross income (AGI). Personally, I usually wait to contribute to my ROTH the day before I file my taxes to make sure I haven’t over contributed based on my AGI.

Also don’t forget that you can still contribute to your ROTH IRA for 2007. Just make sure you do so prior to filing your 2007 taxes.

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The interesting piece is how you pay back the loan. Rather than a payroll deduction, you would receive a statement in the mail that you would have to pay just like a regular credit card. Hmm, I always thought the reason they did payroll deductions was to force you to pay it back.

Ok, lets talk about this. There are people in severe credit card debt as we speak and they were using the bank’s money. Can you imagine what this would be like knowing that it is their own money? I think they apprehension would be much less. Also, let’s not forget that once you leave your current position, most 401k plans require that you pay back the loan immediately. Not to mention the fact that you are reducing your overall investment potential by reducing your balance.

This idea has government bail out written all over it. So I guess it works like this… You charge your retirement on items you don’t really need. You can’t pay the bill. Now your retirement is gone. What to do? Get Congress to bail you out of course at the expense of taxpayers. I think they should kill this thought now before people start using this to buy houses that they can’t afford!!!!

Why not create an account like Bank Of America’s keep the change where after every purchase with your debit card they round up and put that change in a retirement account. People let’s focus on saving for retirement not finding easier ways to reduce it!

See the Full Article @ Street.com

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