The New Retirement versus The Old Fashioned Retirement - How Is It Changing?

It looks like the old fashioned retirement is just a pipe dream for many. Dreams of retiring to a care free life after many years of working are going up in smoke. The bad economy and decreases in your retirement investment balances are just some of the reasons. The rising costs of daily life with the additional rising costs of health care are causing many to postpone or even cancel retirement.

My father's generation looked at retirement as working as long as you physically could and then sitting on the porch waiting for the inevitable. Well, things have changed. Today's retirement will be different for many reasons, and as the leading edge of the baby boomers trade in their work shoes for golf shoes, let's take a look at why their retirement plans will be different.

Even 30 years ago, the norm was to work until 65, retire and die less than 10 years later. Retirement was a short period that was relatively easier to fund and was often with the assistance of a company pension plan. New retirees are now living longer, are more active and will be busier. The goal will be to experience all of those things they did not have the time or money to do while working.

Advances in medical science are allowing us to live longer and in better general health. But, all this can add up to a more expensive retirement. Many people find themselves busier in retirement than they were before at work. "Retirement" could now last 20 to 30 years and it is entirely possible that you could spend more time in retirement than you did in the workforce, and we need to finance that extra time.

For those struggling to make ends meet with their current retirement income, part-time work may be essential. It is amazing how earning even a modest income in retirement will stretch your nest egg by reducing draws from your savings.

My grandparent's generation did not plan very many Caribbean vacations or Disney cruises with the kids while they were working. People are re-evaluating their work-life balance and opting to enjoy life to the fullest while their health is good and they are physically able to do what they want. Phased retirement may not only be good for retirees, but good for the economy. The sheer numbers of baby boomers moving into retirement will create strains on the workforce as fewer workers will be available to replace those moving on. Employers will need to find creative ways to keep older workers engaged and around to pass on valuable skills. I expect to see a rise in part-time employment, flexible work times and job sharing to accommodate these workers in transition.

The idea a working retirement is starting to become the norm because many have failed to plan and many plans have failed to bare fruit. Finding ways to save on living expenses and implementing new part time sources of income are the only way to save retirement for many.

Living longer and healthier has become a blessing and a curse. Mom and Dad didn't worry as much about money as we do now. Because today all the things like cell phones, computers, and other things we spend money on, they didn't have.

Retirement means different things to different people and a healthier much more balanced lifestyle is the goal for many. You will need to determine what is important to you, decide what "your retirement" will look like and plan to make it happen.

Will Hurricane Irene Have Any Effect On Insurance Rates

Image via WikipediaWhile many people in the North East are cleaning up the mess that hurricane Irene left, many of them are wondering what this will do to the rates they pay on the homeowners insurance. In Florida we managed to avoid serious damage from the recent storm. By law, insurers can not hike rates because of financial issues caused by losses in other states.

Florida isn't the only state having trouble with hurricane insurance. Also North Carolina, New Jersey, and Connecticut are having troubles with their insurers leaving the state. Many of these states have formed state sponsored homeowners insurance companies to fill in the gaps of insurance companies failing to provide coverage to the states homeowners.

Many states with long coastlines like New Jersey and Connecticut are in the same shape as Florida. Connecticut has in common with Florida a large percentage of its population living in coastal areas. Florida has 79 percent of its population living on the coast while Connecticut has 65 percent of its people living on the coast.

Don Brown, former Florida State Representative and Senior Fellow at The Heartland Institute and former state legislator who was chairman of the House Insurance Committee and is a noted national insurance expert, said since Irene missed Florida and aimed its fury to the north, any impact on higher rates would be because of reinsurance.

“You might see some upward pressure on reinsurance,” Brown said. “It’s unlikely there would be any immediate impact. It would down the road.” 

Reinsurance: is insurance that is purchased by one insurance company from another for risk management, transferring risk from the insurer to the reinsurer. 

So National insurance companies will have to pay more to other insurance companies who help in sharing the risk. If there wasn't reinsurance, we would all have to pay a much larger insurance premium.

The bottom line is insurers are not going to eat the costs of higher reinsurance costs. Sooner or later they will pass the costs down to the consumer. The days of cheap homeowners insurance died the day hurricane Andrew hit Homestead and wiped it out.


Having proper homeowners coverage means you need check your policy to see if your under or over insured. Check your policy for coverage due to storm wind damage. Also check to see if you need flood insurance.

How To File A Flood Insurance Claim

Irene's path up the Eastern coast of the U.S. has done major damage and left many people with flooded homes. Even in communities that never experienced flooding this bad before, have damage. The New England states have reported flooding in places where there has never been any. If your home is flooded, what should you do next? According to the National Flood Insurance Program's website Floodsmart.gov you can file your flood insurance claim by following these three steps:

STEP ONE:

After experiencing a flood, contact your agent or insurance company to file a claim. An adjuster should contact you within a few days of filing your claim. If you do not hear from an adjuster, you can contact your insurance agent or company again. Make sure you have the following information handy:

• The name of your insurance company
• Your policy number
• A telephone and/or email address where you can be reached at all times

STEP TWO:

Separate damaged from undamaged property. Your adjuster will need evidence of the damage to your home and possessions to prepare your repair estimate.

• Take photographs of all of the damaged property, including discarded objects, structural damage, and standing floodwater levels.
• Make a list of damaged or lost items and include their date of purchase, value, and receipts, if possible.
• Officials may require disposal of damaged items so, if possible, place flooded items outside of the home.

STEP THREE:

Your adjuster will provide you a Proof of Loss form for your official claim for damages. You'll need to file this claim with your insurance company within 60 days of the flood. This document substantiates the insurance claim and is required before the National Flood Insurance Program (NFIP) or insurance company can make payment.

You'll receive your claim payment after you and the insurer agree on the amount of damages and the insurer has your complete, accurate, and signed Proof of Loss form. If major catastrophic flooding occurs, it may take longer to process claims and make payments because of the sheer number of claims submitted.


Flood insurance has become as important as standard homeowners insurance. As the residents of New Orleans found out the hard way.

Are You Covered For Flood Damage?

Image via WikipediaHurricane Irene has finished it's work and is out to sea. In it's path of destruction we see not only damage caused by high wind but by flooding. Is it me or over the last decade has weather events resulted in more flooding than ever. Where I live we are in the middle of the hurricane season. Not since Katrina have we seen any visits by hurricanes. But hurricane season comes every year and more than four out of every five natural disasters nationwide involve flooding. Yet according to the Insurance Information Institute, less than a fifth of U.S. homeowners have a flood insurance policy that protects their property and belongings.

People tend to underestimate the risk of flooding but 90% of all natural disasters in the country involve flooding. During the first 6 months of 2011, the federal government declared 28 major flood disasters, putting it ahead of the pace of 2010, when there were only 50 for the entire year.

Most people think they are covered for flood damage by their homeowners insurance policy. This is not true in the past 10 years there has been $2.7 billion dollars in flood damage to American homes, according to the National Flood Insurance Program.

How Much does a Flood Insurance policy cost?

The average flood insurance policy in 2010 was $594 a year for $220,577 worth of coverage. The average flood insurance claim was $26,067 in 2010. To see if your home is at risk of being affected by a flood go to www.floodsmart.gov.

Do I need a Flood Insurance policy if I am not in a designated flood zone?

There are designated flood zones and there are Special Flood Hazard Areas. If you are in a low risk area, you still are at some risk. Flood insurance covers direct physical losses resulting from heavy or prolonged rain, melting snow, blocked storm drainage systems and levee dam failures. You just don't have to live in a flood plain to be affected by flood damage.

My home is in a designated flood area and I carry flood insurance, which is requires by my mortgage lender. I am glad I have it, even though where I live has never experienced a flood. I am also prepared for wind damage with hurricane shutters even though we went through Hurricane Andrew and suffered no damage. It just makes sense to be prepared with the proper flood insurance

New Credit Card Rules Effective August 22

Image via WikipediaLast week, new rules kicked in concerning the Credit Card Accountability, Responsibility, and Disclosure Act of 2009. These new rules, that the credit card companies are balking at, are finally here and you should be seeing them take affect on your next credit card bill.

New rules from the Federal Reserve mean more new credit card protections for you. Here are some key changes you should expect from your credit card company beginning on August 22, 2010:

Reasonable penalty fees

Let's say you are late making your minimum payment.

• Today: Your late payment fee may be as high as $39, and you likely pay the same fee whether you are late with a $20 minimum payment or a $100 minimum payment.
• Under the new rules: Your credit card company cannot charge you a fee of more than $25 unless:
• One of your last six payments was late, in which case your fee may be up to $35; or
• Your credit card company can show that the costs it incurs as a result of late payments justify a higher fee.

In addition, your credit card company cannot charge a late payment fee that is greater than your minimum payment. So, if your minimum payment is $20, your late payment fee can't be more than $20. Similarly, if you exceed your credit limit by $5, you can't be charged an over-the-limit fee of more than $5.


Additional fee protections

• No inactivity fees. Your credit card company can't charge you inactivity fees, such as fees for not using your card.
• One-fee limit. Your credit card company can't charge you more than one fee for a single event or transaction that violates your cardholder agreement. For example, you cannot be charged more than one fee for a single late payment.

Explanation of rate increase

• If your credit card company increases your card's Annual Percentage Rate (APR), it must tell you why.

Re-evaluation of recent rate increases

• Today: Your credit card company can increase your card's APR with no obligation to re-evaluate your rate increase.
• Under the new rules: If your credit card company increases your APR, it must re-evaluate that rate increase every six months. If appropriate, it must reduce your rate within 45 days after completing the evaluation.

These are simple changes that will streamline the rules across all credit card companies. There won't be different rules across different companies anymore. 

Debt and Marriage: When Do I Owe My Ex-Spouse's Debts?

Image via WikipediaWhile researching this article, I Googled the words "debt" and "divorce", I got over 14 million results. In our society, debt and divorce go hand in hand. With money problems the leading cause of divorce in our country I can see why. Even with many intact marriages money is a big point of contention. The bills are continually rising, it costs a lot to raise children and many other factors contribute to the problem. Sadly the strain, of money problems, can be devastating and many marriages end up in divorce.

In a divorce, the marriage you entered into with such high hopes, can be ended with the signature of a judge. The only problem is that debts are not eliminated so easily. If your in the pre-stages of divorce you may want to learn how the debts of the marriage are going to be looked at by the creditors. You may agree with your spouse or the judge may decide for you who is to pay the debts but your debtors don't look at it the same way you are.

With all forms of debt entered into you will find two ways the responsible parties are listed:

Individual Account:
Your income, assets, and credit history are considered by the creditor. Whether you are married or single, you alone are responsible for paying off the debt. The account will appear on your credit report, and may appear on the credit report of any "authorized" user. However, if you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), you and your spouse may be responsible for debts incurred during the marriage, and the individual debts of one spouse may appear on the credit report of the other.

Pro's and Con's:
If you're not employed outside the home, work part-time, or have a low-paying job, it may be difficult to demonstrate a strong financial picture without your spouse's income. But if you open an account in your name and are responsible, no one can negatively affect your credit record.

Joint Account:
Your income, financial assets, and credit history - and your spouse's - are considerations for a joint account. No matter who handles the household bills, you and your spouse are responsible for seeing that debts are paid. A creditor who reports the credit history of a joint account to credit bureaus must report it in both names (if the account was opened after June 1, 1977).

Pro's and Con's:
An application combining the financial resources of two people may present a stronger case to a creditor who is granting a loan or credit card. But because two people applied together for the credit, each is responsible for the debt. This is true even if a divorce decree assigns separate debt obligations to each spouse. Former spouses who run up bills and don't pay them can hurt their ex-partner's credit histories on jointly-held accounts.

Authorized Users:
If you open an individual account, you may authorize another person to use it. If you name your spouse as the authorized user, a creditor who reports the credit history to a credit bureau must report it in your spouse's name as well as in your's (if the account was opened after June 1, 1977). A creditor also may report the credit history in the name of any other authorized user.

Pro's and Con's:
User accounts often are opened for convenience. They benefit people who might not qualify for credit on their own, such as students or homemakers. While these people may use the account, you - not they - are contractually liable for paying the debt.

Action Plan:

• If you're considering divorce or separation, it's important to make regular payments so your credit record won't suffer. As long as there's an outstanding balance on a joint account, you and your spouse are responsible for it.
• If you divorce, you may want to close joint accounts or accounts in which your former spouse was an authorized user. Or ask the creditor to convert these accounts to individual accounts.

Failure to do this usually leads to one spouse paying for a while but later defaulting because of lack of income or out of spite. This results in the other spouse having a ding on their personal credit report or eventually being sued by the creditor for not paying.

In a joint mortgage, the only way to get your name off the document is to have the home refinanced. Just having a judges decree for one spouse to pay the debt is not recognized by the creditor. Divorce does a good job of separating you legally from your spouse but does a bad job divorcing you from your spouses debts. It's going to be your job to divorce yourself financially from your spouse.