The Dos and Don’ts of Cashing in Your Retirement Funds

The age of 65 is significant for many of us; it can signal it’s finally time for retirement or time to sign up for Medicare vs traditional health care insurance. But what are the rules about withdrawing money from your retirement funds when the time comes?

With the elation that comes with retirement, and the opportunity to start a new chapter in life, it can be easy to forget that retirement funds are finite. Yes, you’ve been dutifully paying into your accounts for years, but it’s important not to stay mindful of your spending habits.

Resist These Temptations in Retirement

Did you know that if you withdraw money from your retirement account before you reach age 60, the funds will be subjected to a 10% penalty in addition to income tax? However, there are some ways you can navigate early withdrawal without the 10% fee tacked on.

Ways to Avoid Early Withdrawal Penalty

• Wait until age 59 ½ to withdraw money from your IRA
• Use the money for medical expenses that exceed 7.5% of your adjusted gross income
• If you’re unemployed, early withdrawals can be made to pay for insurance premiums
• After 12 weeks of unemployment, penalty-free withdrawals can be approved
• Early withdrawals can avoid the penalty if used for education (room and board, textbooks)
• An individual can avoid the 10% fee when up to $10,000 is withdrawn early to build/purchase a first home
• Up to $5,000 can be withdrawn after the birth or adoption of a child
• Military service exemptions
• Inherited IRAs are only subject to income tax, not a penalty fee, for early withdrawal

Obviously, it’s ideal if you can avoid dipping into your retirement early, but life sometimes throws unexpected surprises at us!

Treating Retirement Like a Windfall

If you’ve resisted the temptation to withdraw money from your retirement funds early, the next tip is to avoid treating your retirement money like an unexpected financial windfall. Yes, you’ve planned for this season of life, but you should still budget responsibility so the money lasts. 

It can be tempting to indulge in splurges such as gambling or new cars when you retire. Better use of your retirement might be to invest in yourself, your relationships, or ventures with the potential for future earnings.

There’s nothing wrong with treating yourself in your retirement, but remember that a car loses value as soon as you drive it off the lot, so if you need or want to upgrade after you retire, do so wisely. 

If you want to travel and spend money on your hobbies, do so responsibly. If you want to help out family members financially, consider setting up repayment plans and treat the financial support as a personal loan vs a gift.

Waiting Until 65 to Enroll in Medicare

Did you know that you need to enroll in Medicare before your 65th birthday? This is an oversight many people make due to myriad reasons. Often, if an individual is still working at age 65, they have insurance through their employer. 

In this case, they are eligible to enroll in Medicare after turning 65. It’s when a person is not currently employed that they run the risk of paying a penalty for enrolling in Medicare late.




To avoid paying a higher monthly premium for Medicare, be sure you know the window of time during which you need to apply. Even if you have supplemental coverage between the time of retirement and your 65th birthday, start the transition to Medicare. 

If you’re already claiming your Social Security benefits prior to turning 65, you should automatically receive notice from Medicare about coverage when you turn 65.

How to Enroll in Medicare

If you’re not already receiving Social Security benefits before your benchmark, 65th birthday, you will need to take the reigns of enrolling in Medicare. 

Since many people are not accessing SS benefits until age 67, it’s important to contact Social Security regarding Medicare during the enrollment window, which is typically the span of three months before the month you turn 65, and three months after you turn 65. 

This seven-month period has different deadlines for different types of coverage, so it’s best to contact Social Security in the three months leading up to your birthday to avoid any lapses.

If you’re not sure how or when to enroll in Medicare, and what coverage you need, there are services such as MedicareCU, which partners with credit unions to offer education about Medicare.

The Dos of Retirement Spending

We’ve talked about what to avoid, now let’s focus on what you should do with your retirement money.

Invest in Yourself

We mentioned before that you deserve to spend your retirement money on yourself and your loved ones. After all, you’ve spent decades working toward your Golden Years, and now it’s time to enjoy them!

Education

No matter what formal learning you already have under your belt, it’s important to continue learning after retirement. You now have the time to dive deeper into your hobbies and interests, so take classes for your favorite language, to learn more about technology, or how to grow the garden you’ve always dreamed of.

Exercise

Investing in your health is always money well-spent. In retirement, be sure you’re staying active not just for your physical health, but your mental health as well. 

Participating in group fitness classes, taking solo walks, or lifting weights at the gym is not only good for you but good for your wallet. Regular exercise can help prevent costly health expenses in the future.

Experiences

If you’re not used to having the freedom to do what you want once you retire, you may find yourself feeling aimless or depressed. Use your time and savings to experience the things you didn’t have time for when you were working full-time. 

Travel to visit family and friends, purchase a membership to a museum, or get season tickets for your local sports team. Having trips, exhibits, and games on your calendar can help you find a new schedule to live by that offers a sense of purpose and fulfillment.

No matter how you decide to spend your retirement, or when you access it, seek financial advice from a trusted advisor to avoid fees and overspending. 

If you’d rather keep track of your budgeting yourself, there are retirement calculators and apps readily available, or you can simply call your credit union or bank for updates on your account balances.

How to Prepare to Pass On Your Legacy and Assets

It is a sad fact of life that we all must one day pass on. Planning for your legacy and assets is important to ensure you have the right people in place to carry out your wishes. 

If you're not sure where to start, this article offers some advice about preparing for passing on what matters most.

Consider Leaving a Will

A will is a legal document stating not just how your assets should be distributed after you pass on, but also discusses animal care and even child guardianship. 

It is an important document that will allow your friends and family to adequately mourn your death without having to worry about all the loose ends because you would have already dealt with that for them.

Create an Estate Plan and Gather Important Files

An estate plan outlines what happens to your assets and property when you die, including appointing the executor of your will and naming beneficiaries for insurance policies, bank accounts, and retirement plans. 

This allows for the smooth transfer of your assets and often prevents unnecessary taxes upon your loved ones. Make copies of all vital records such as birth certificates, marriage licenses, and passports so they can easily be retrieved by family members in case there's a need for them later.

Provide Information About Next of Kin

If possible, provide contact details for close family members who may not be aware they are listed as emergency contacts with financial institutions or other service providers where personal information must be provided to them upon request.

Consider Leaving a Letter of Instruction

A letter of instruction is typically left for family members to let them know what they can expect after you pass on, including how your assets are managed and any information that may help ease the transition into their new lives without you. 

Discussing with beneficiaries about who will inherit which accounts is important, so as to remove any confusion about where each account belongs once it comes time to transfer funds or close accounts.

Discuss With Your Legal Advisor the Best Options for You

Discussing your options with an estate planning attorney is important to ensure you have the right plan in place that suits your needs. Also, creating an accurate list of all physical and financial assets can help family members access accounts, transfer money, or claim property without issue after you pass on. 

Another option is to set up a trust where certain assets are transferred to the trustee, and it dictates who administers the afore-mentioned assets for the beneficiary.

It is important to prepare for the passing on of your unique legacy and assets. Whether you have dependents or not, it is important to be prepared for when tragedy strikes. You may be and feel young, but we never know when it is our time to move on.

Can You Plan Your Own Funeral Service?

Funeral plans are rarely discussed until the time comes when they are necessary. Most often, this is not during the best of circumstances. 

However, to alleviate some of the stress on their loved ones, some people make their wishes clear in a will and testament or by expressing their wishes before that time comes. 

It is possibly one of the kindest things you can do to plan your own funeral service in advance so that your loved ones are not adding that detail to the required affairs at a time when there is already enough distress.

Why Should You Plan Your Own Funeral Service?

Since funeral arrangements are so rarely discussed ahead of time, the people attending are typically left wondering if the deceased would have wanted it this way. 

There are times when someone has voiced their desires, and the effort is put toward making sure those desires are met. This is a time of the utmost respect. 

Planning your own services not only assures you will have the service you prefer, but it takes the burden off others who are grieving your loss. You can relieve their stress by planning in advance.

Planning Your Funeral Is a Relief

Planning your own funeral is not as tough as you might think. In fact, it is an opportunity to look toward the time you will be gone, which very often allows you the chance to reflect on where you are right now. 

It is not necessarily a perspective people take very often, but a welcome moment to consider your life in a broader view. You can make your choices alleviating your loved ones of the tough choices they would otherwise have to figure out in your absence.

Burial, Cremation or Donation?

For many, the idea of an elaborate burial is repugnant. The whole package has advanced in price to the point of being equivalent to the down payment on a new home. You can certainly plan for such an expense by including the choice of casket and the burial plot.

Cremation is a popular choice in part because it is a mere percentage of the cost of burial. You can select one or more urns if your family wants to hold onto your ashes. 

Lately, people have found having the ashes allows them to be used in jewelry so that a loved one can have you with them all the time.

Finally, you can choose to have your body donated to science. This is yet another need we rarely consider at the time.

You Have Much to Consider

Given all the options for a funeral, it is useful to consider all that is available. Burial varies from typical in-ground to either in-ground or above-ground lawn crypts. 

There are also private mausoleums for either a burial or cremation. Private mausoleums are generally intended for a single-family and are quite costly, however, they do provide exclusivity. 

There are also natural burials that make use of a biodegradable casket or shroud that allows for everything to naturally decompose.

All of these ideas can be discussed ahead of time with loved ones so that you can assure them they will have the chance to pay their respects, whether it is to allow people to visit your burial site or a memorial that you can establish in advance. 

You can finalize your arrangements to include all the details such as location, flowers, music, and the like. You can even specify who will be attending. 

You can establish a pre-need contract to ensure that everything is paid for in advance, taking yet another burden off your loved ones.

5 Tips on How to Choose a Good Accident Lawyer in Manhattan

The first step taken when seeking justice after being involved in an auto accident is getting an accident lawyer. Selecting a suitable attorney is a crucial determinant of the success of your case.

Every accident victim in Manhattan needs a skilled and experienced accident attorney who's familiar with the latest changes in laws and regulations in New York City. 

Suppose you are a resident of the city and have faced a serious car accident, you may need a Manhattan auto accident lawyer to help you get reimbursement for damages suffered due to that incident.

A skilled auto accident attorney is equipped to support you during such an arduous experience; they'd ensure the negligent party is held accountable for the pain and suffering you endured from the accident.

To ensure this is successfully achieved, you need to know how to select a suitable auto accident attorney.

What Factors Should You Consider When Choosing a Suitable Accident Attorney?

1. Adequate Experience

You can get the best quality insight from an attorney that is experienced in handling cases similar to yours. When choosing between personal injury attorneys, it's advisable to look for one who specializes in auto accidents, since you'll be able to compare the past cases they've handled with your own.

Seeking the past case results of a lawyer will help you analyze their experience with such cases. Inquire about how the attorney would handle your case both in and outside of the courtroom.

2. Check Their Success Records

You want to choose an accident lawyer who ensures their clients win their cases and receive fair settlements for their damages. Find out about their winning and losing experience with cases similar to yours; your attorney should have a history of winning similar cases so you can be sure that your claim, too, will be successful.

3. Resources

Cases involving injuries from auto accidents often require extensively thorough investigations. The attorney you chose should be able to have the right expert contacts that will make the investigation of your case less arduous.

They should have enough time to dedicate themselves to the case and have access to the best expert services. Such an attorney can build you a case strong enough to acquire the highest possible settlement.

4. Records of Any Disciplinary Issues

Do some research about your lawyer of choice; check out their disciplinary records to ensure that they do not have any negative complaints from past or present clients. You can access such details through an online search.

Make sure you look at other clients' feedback about the lawyer you choose to ensure you're making the right choice by hiring them.

5. Flexibility

You need an attorney who will be easy to work with in terms of flexibility. Your lawyer should be able to reach you even when you're at the hospital and bring you documents at your home or workplace to sign. 

Because you will be going through a tough time with your injuries, having a flexible attorney will be very convenient to your needs.

Your Attorney's Devotion to Your Case Will Significantly Impact the Success of Your Case

A skilled attorney will have ample experience in dealing with cases similar to yours and will be familiar with auto accident claim formations. 

In choosing the right one, you are assured of quality services and top-notch effort in winning your case and getting you the justice you deserve after great suffering. Choosing a lawyer from your locality also allows for flexibility and speedy case practice.

Logistics of Buying and Owning a Second Home

There is nothing like the beautiful and scenic views that owning a second home comes with. However, there are some logistics involved in buying and owning a second home. 

These factors make it necessary to know what lies ahead of you before purchasing your new vacation getaway. It would be best to look at real estate for sale before buying or thinking about buying a second home.

Financing Your Second Home

The first step in the logistics of owning a second home is looking at your financing options. You need to know what you can afford and see if you qualify for multiple mortgages on the same property. 

One thing to remember when buying a second home is that it needs to be a place to vacation and not a primary residence. If you are buying your second home as an investment, then it is likely that you will need to purchase more than one mortgage.

Location

One of the first factors you must consider when finding logistic information on owning a second home is the location. You should never buy a vacation home without knowing where the location is. 

Know what you will be able to do in the near future and long term when it comes to transportation. Is there a hotel nearby that you can stay in when visiting? If not, then look into real estate agents that can find your second home for you.

What Will Your Vacation Home Be Used For?

Another factor to consider is what you will be using the vacation home for. Will you need more than one bedroom or room for your guests? You also want to think about any guest cottages that are on the property. 

Another thing to keep in mind is if you plan on renting out your second home while not there, then you will have to consider having a guest home for your visitors.

Home's Layout

You should look at square footage and how many rooms are in the house. It also helps if there are floor plans available. You should also be aware of the age of the home and if there are any renovations that you would like to do yourself.

Maintenance and Upkeep Is Important

The fourth factor that you need to consider before purchasing your second home is maintenance and upkeep. This will affect how much you spend on your vacation property each year. 

If you are looking into buying a second home to rent out for profit, you must hire maintenance. If the property is big enough, then you should consider hiring help around the house as well.

In conclusion, there are many factors to consider when looking to purchase a 2nd home. What will you use it for? Does the location fit your needs? How often will you be staying there? Etc. 

Take all of your options into consideration, and do your research, so you can find the perfect 2nd home.

What to Consider When Making a Retirement Plan

Planning for your retirement can be a stressful process, and many people feel overwhelmed when they begin to look at their long-term financial options. 

While this process is going to be time-consuming, there are a few key variables that you should consider if you want to ensure that you are going to be comfortable and cared for in your senior years.

Age

It should come as no surprise to anyone that planning for retirement as early as possible can be incredibly beneficial. In addition to making the planning much less stressful, it is also going to have a big impact on your finances throughout the rest of your life. 

As a bonus, younger people can also engage in slightly more aggressive investments because they don’t have to worry about an immediate return.

Family

When it comes to retirement planning, your family is going to be a major factor. If you have a spouse or long-term partner, then you will need to sit down with them while you are making a plan so that everyone is on the same page. 

Your retirement plan will also need to include any income or debts that they are going to be bringing to the table.

Major Assets

Even if you are planning decades in advance, you still need to consider what types of assets you are going to potentially have when you retire. For the average individual, a home is going to be one of their biggest assets, and that property can have a major impact on your finances. 

You should consider whether you will be living in the home for the rest of your life or you plan on selling it to help fund your retirement years.

Working With a Professional

All of this information can be very confusing, and that is why so many people work with wealth management companies when they are planning their retirements. 

A wealth manager will be able to help you come up with a financial plan that works for your own lifestyle and situation. You can also meet with them once a year to update that plan if any major life events have taken place.

As long as you start early and come up with a comprehensive plan, you can rest assured that your savings are going to keep you comfortable throughout your retirement. 

You will also be able to plan for any financial roadblocks, medical problems, or other issues that you might run into as you grow older.