If you’re in your 50s, you need to plan for long-term care right now

My Comments: “Who me? Nah, I’m good. I’m not going to become goofy or worry about someone helping me take my meds every morning. Or help me prepare my meals. Or help me in the shower…”

(BTW, this image is of my mother who suffered from Alzheimers for 10 years after my father died.)

by Carmen Reinicke \ June 22, 2018

More money doesn’t always lead to more planning, especially when it comes to unpopular subjects like end-of-life care.

Less than a quarter of high net worth clients currently have plans for long-term care in place, according to a poll of financial advisors by Key Private Bank, the wealth management arm of KeyCorp.

The poll surveyed nearly 150 advisors about their experiences with high net worth clients, those with assets over $1 million.

Advisors said persuading clients to devise plans for long-term care is a challenge. They also said it is difficult to balance saving for long-term care with other financial goals such as saving for college or buying a house.

“Part of it has to be the typical head-in-the-sand approach,” said Chad Stevens, senior financial planner at Key Private Bank. “‘If I ignore it, it’ll go away.'”

Having tough conversations is part of the job of an advisor, and it’s important to talk about the financial risks of aging, said Stevens.

“Unless you plan now, you can’t be sure that your goals will be accomplished,” Stevens said.

Plan carefully
It is important to make sure that your financial goals align with your lifestyle goals for retirement and end-of-life care.

Most clients said their top choice for long-term care is to stay in their own home and be fully independent, according to the survey. But this wish may be unrealistic; more than half of people over age 65 today will need long-term care at some point, according to AARP, a nonprofit advocacy group for in older Americans.

The second most popular choice is to move into an assisted living facility, followed by staying at home with the help of family members and personal aids.

The projected costs of long-term care are increasing, according to a report by Genworth Financial, an insurance company. In 2017, the median annual cost of a home health aide was $49,192, and the median cost of a private room in a nursing home was $97,455. By 2027, the median annual cost of a home health aide is expected to be $66,110, while the median cost of a private room in a nursing home will be $130,971 per year.

“Many underestimate the costs or think that Medicare or health insurance will cover it,” said Jean Accius, vice president of long-term services and supports at the AARP Public Policy Institute, which does public policy research, analysis and development at AARP.

But, that is not always the case, Accius said.

Most people “think they’ve prepared but when something happens they don’t have nearly enough,” said Amy Fuchs, an aging life-care expert. She also said that when people sign up for long-term life insurance without thinking through what their needs will be later in life, they might think they are covered when they are not.

If clients don’t prepare for these costs, they may end up paying out of pocket. This can quickly eat into their savings and negatively affect other financial goals.

“If leaving a financial legacy for your family is important, you need to plan ahead for that,” said Debra Drelich, who runs a private practice called New York Elder Care Consultants LLC.

Start early

Advisors recommend that clients start planning for long-term care years before they think they will need it. The most robust planning sessions should occur between ages 40 and 50.

“Don’t avoid the conversation,” said Stevens from Key Private Bank. “Find a trusted advisor that will give you an idea of what plans are out there so you can make an educated decision.”

Starting early will give you more time to assess what the options are in your home city and state, because location can greatly limit what services are available.

“Where you live matters — it limits your choices and options,” said Accius. He said many resources are available for families who want to begin planning, including the AARP scorecard, which ranks states based on the long-term services they provide.

An early start will also help if you decide to buy long-term care insurance; the younger and healthier you are when you purchase, the lower the cost will be.

Having a plan is the best way to ensure that the late years of your life are as smooth as possible, according to financial advisors and aging life care experts.

“We plan for weddings and we plan for graduations, and we do it very thoughtfully,” said Anne Sansevero, a geriatric nurse practitioner and founder and CEO of HealthSense LLC, an aging life care management consulting company. “But this is our life, our years ahead.”

“Just like saving for retirement, you have to save for your health and well-being,” she said.

Communicate with family

Beyond having a plan, it is important to communicate your wishes for long-term care with your family, financial advisors and aging life care professionals say. Few advisors report that their clients are communicating with their families about their wishes for long-term care, according to the Key survey.

“Sometimes older adults don’t let their kids in and provide them with that information, so the kids have no idea,” said Debra Feldman, an aging life care professional and founder and president of her own firm, Debra D. Feldman and Associates.

She said that if older adults are not initiating the conversation, children should come to their parents. Waiting too long can lead to scrambling in a time of crisis, she said.

Having your family on the same page will alleviate stress and pressure and allow everyone to enjoy the golden years of your life more.

“Talking through long-term care desires early-on with family members will be crucial to setting expectations, delegating responsibilities and avoiding misunderstandings or surprises,” said Stevens.

Source: https://www.cnbc.com/2018/06/22/if-youre-in-your-50s-you-need-to-plan-for-long-term-care-right-now.html

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A Retirement Plan for Workaholics – 5 Tips

My Comments: If you’re still a working stiff, the idea of eventual retirement crosses your mind from time to time.

In years past, we thought of live as having two phases: childhood and adulthood. In childhood we are dependent on others and in adulthood we are dependent on ourselves. Adults worked until they died or found someone to look after them.

In the mid 19th Century, the idea of ‘retirement’ surfaced and became a third phase of life if you had not already died. Here in the 21st Century it’s the norm. Having enough money to live another 30 years without working is the game plan for most people.

What to do if you’re someone who loves to work, is happy working, and probably has enough money saved to make some kind of retirement possible. Here are five tips for you.

by Douglas Dubitsky \ July 5, 2017

Can a workaholic ever retire?

Many workaholics genuinely enjoy the rush of starting and completing projects and continuing the nonstop cycle. So it may also be difficult for them to contemplate what life may be like in retirement once they are officially out of the workforce.

If you’re a workaholic, smoothing your transition to retirement means uncovering the answer to the question: What part of the end of your job will you miss the most? It might be the people. Or the challenges. Or having purpose. Once you know which it is, you can focus on how to reap the same benefits — and feelings — while not holding down full-time employment.

Here are 5 tips to help workaholics ease into retirement:

1. Start slowly. If you jump into retirement all at once, the shock to your routine might be too much to handle. Instead, look for opportunities where you can work part-time, even with your current employer.

Cut back on your work hours gradually and your nonworking life could just slip into place. Look for a weekend job, or an after-hours job, to start while you’re employed full time. This could turn into part-time employment that you may want to pursue during retirement.

You might want to find out if your current employer would consider keeping you on as a consultant in retirement. This may help your employer retain your institutional knowledge while you enjoy a more flexible schedule.

If you plan to take Social Security retirement benefits before Full Retirement Age (between 66 and 67, depending on when you were born) and work at the same time, however, your benefit will be reduced if you make more than the yearly earnings limit. In 2017, the Social Security earnings limit is $16,920. Social Security deducts $1 from your benefit payments for every $2 you earn above the earnings limit.

2. Experiment and schedule.
As you wean yourself away from work, look for new ways to occupy your mind. This could be as simple as taking a cooking class, volunteering or exercising every morning before breakfast.

Also, at least in the beginning, either schedule your days down to the hour so you always have something to do or time-block the beginning or ending half of the day.

Has your spouse or any of your friends retired recently? Retirement may prove to be a great opportunity for you to spend more time with him or her. The same goes if you have children or grandchildren. You can reroute the attention you gave to your job to your family and friends.

3. Give yourself a break. A recent study by my company, The Guardian Life Insurance Company of America, found that one in six Americans is very dissatisfied with his or her life. Often, workaholics feel guilty about not having spent enough time with their families during their careers. Some didn’t pay attention to themselves either, or to the physical and mental benefits that come with rest.

So as you ease into retirement, don’t forget to take care of your own needs even as you strive to care more for those around you.

4. Talk it out. If you find that postwork life is more difficult than you anticipated — or even worse, that you’re feeling depressed or overwhelmed — don’t hesitate to get help. It’s important that you talk about your feelings with friends, family or other retirees going through similar transitions.

5. Look ahead. Most retirees find it doesn’t take long to adjust to life without a full-time job. Keep this in mind as you look toward your personal retirement plan. Focus on your retirement the way you’ve focused on your work and the years ahead can be your best ever.

https://www.marketwatch.com/story/a-retirement-plan-for-workaholics-2017-07-05

Life is going to turn very nasty if we can’t solve the growth puzzle

My Comments: I’ve written before about income inequality and the effect it will have on society if we do not find a solution.

The ever long crisis in the Middle East arises from vast segments of the population having very little compared to a small ruling class who have a lot. Using religion as a way to remedy their poverty is all they have left in a society where democracy is essentially a sham.

The US built it’s global leadership in the 20th Century on the backs of the middle class who had a realistic expectation of rising up the economic ladder toward prosperity. That is now disappearing. Think college students borrowing money to gain an education and being saddled by crippling debt until they reach middle age.

Prosperity permeated society. The upper class paid taxes to help the lower classes because it gave them more money with which to buy stuff. Our military was second to none across the planet. Today the middle class in the United States is shrinking. The number of working poor is rising. Birth rates are declining. The 1% are favored by our leaders with tax cuts. Add the effects of a con man in the White House and things are going to get nasty.

This is a long article, written for Britain specifically, but for any of you concerned about the world your children and grandchildren will inherit, you need to pay attention and vote accordingly. Assuming there are candidates who also understand this looming problem and are willing to fight to solve it.

by Andrew Rawnsley \ November 25, 2017

One of the earliest examples of the personal computer was the LGP-30. Created in 1956, it had a tiny fraction of the processing power contained in the slim phone that I carry in my pocket. This artefact from the Jurassic era of computing was also excruciatingly expensive. Its retail cost was $47,000. That’s more than $400,000 in today’s money.

This is one way of illustrating why productivity matters so much. It is by improving the efficiency of making things that more people can have better stuff at cheaper prices. Getting more from each hour worked allows wages to rise, lifts living standards and boosts the tax take to finance additional government spending on desirable services. It is this which ultimately underwrites political promises and makes us feel we are getting better off. Absent improvements in productivity, everything else goes to pieces. Including politics. Especially politics.

Which is why it wasn’t any of the big sounding numbers in the budget that counted. The figure that really mattered was a tiny one. That number was 1.2%, which is the revised amount by which the Office for Budget Responsibility thinks productivity will grow per year. From that alarmingly small number, it projects other frighteningly small numbers. The economy will grow by less than 2% in each of the next five years. That means protracted wage stagnation. This forecast, grim as it sounds, is based on one rosy assumption, which is that Brexit has a relatively benign effect on the economy. A bad Brexit would make things considerably worse.
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These small numbers have large consequences. The period since the Great Crash of 2008 is turning into the most stagnant era for living standards since records began. If Britain is now stuck in a low-growth rut, this will be massive. It will fundamentally reshape political argument and very likely blast apart existing parties. It already is. We will be taken in directions that will be highly challenging and to places that could be extremely unpleasant. For all of the life of every adult living in Britain, there have been economic ups and downs and governments have come and gone with the booms and busts. Yet the overall picture has seemed steady. It was the shared assumption of both politicians and voters that the economy would expand at a reasonable clip over time. It was the essential foundation of the expectation that most people would be better off than their parents. The parties argued about how to divide the cake, but they shared a belief that the size of the cake would carry on growing at a respectable rate. That made the dividing business a lot easier. If the cake ceases to grow – or increases at such a glacial pace that it feels like a stop to many folk – that is going to have vast implications.

Let’s start with the least important consequence, which is what this might mean for our current rulers. It has been a rough-and-ready rule that governments improve their chances of re-election if most people feel they are becoming better off. “You’ve never had it so good”, as Harold Macmillan didn’t quite say on his way to an election victory in 1959 as an incumbent presiding over a buoyant economy. Governments struggle to retain support if voters think living standards are stalling or falling.

This rule doesn’t explain everything about election results, but it is a significant component of most. Take our two most recent contests. In 2015, David Cameron was lucky that the timing of the election coincided with a brief period when real disposable incomes were rising. It helped him to justify the pain of austerity on the grounds that a pay-off was beginning to show up in people’s pockets. The Tories improved on their performance of five years earlier and won a narrow majority. Two years on, Theresa May chanced her arm with the electorate when real disposable incomes were once again being squeezed. She tried to change the subject by making the June election about other things, notably Brexit, but that didn’t really work. The stagnation of living standards gave traction to Jeremy Corbyn’s argument that the rules of the economy are rigged in favour of the rich. The Tories lost their narrow majority.

That was not the only difference between those two elections, but it was one of the important ones. If the Tories can stretch this parliament to its full length, they will next face the voters in 2022. You wouldn’t fancy their chances if most people are feeling no better off than they do now and some feel worse off than they were at the time of the Great Crash. Put another way, if Labour were not to win the next election in those circumstances, Labour would only have itself to blame. A low-growth future will be nightmarish for governments of any complexion. It will be much harder to fulfil their promises. Every budget will be difficult. To raise the funds to meet pressure for spending on public services, taxes will have to go up – and it won’t be just “the rich” and companies paying more. Or there will have to be a moderation in expectations of what the state can deliver.

The challenges of a low-growth era will be just as sharp for Labour as for the Tories. It may be more acute for Labour with its historical impulse to promise a New Jerusalem. John McDonnell can use the growth forecasts to attack the current management, but he’d best hope that they are not accurate if he ever ends up in the Treasury with responsibility for trying to find the money to make good on all of Labour’s spending promises. The solution won’t be found on an adviser’s iPad.

In a low-growth future, there might be more of an audience for the view that we over-emphasise economic goods. If there’s not much growth to be had anyway, the Greens and those of a similar inclination could win a wider hearing for the contention that there are more important things in life. My hunch is that it will take a long time to acclimatise most citizens to the idea that growth is no longer a given.

One likely effect on political argument is that it will become more ferociously polarised, an amplification of a trend that is already evident. Desperate times breed more extreme remedies. It is no coincidence, as the old Marxists liked to say, that Brexit, Trump and other populist eruptions have occurred during the long squeeze on living standards that has followed the financial crisis. Brave politicians may try to start an adult conversation with the electorate about the hard choices that follow from low growth. The cowardly, the desperadoes and the unscrupulous will take the national conversation in darker directions. If they can no longer plausibly promise to make people better off, some pursuers of power will seek to create dividing lines around identity and nationality. That ugly trend is already manifest at home and abroad.

A more beneficial use of political energy would be to find out why growth has become so anaemic and do something about it. Politicians have been slow to come to a subject that has been troubling economists for some time. All the advanced economies are struggling with “the productivity puzzle”. The syndrome does seem especially chronic in Britain, but it is not unique to us. This is unfortunate. If other countries had cracked the problem, economists would no longer call it a “puzzle” and we could copy the solutions.

The left contends that low wages, inequality and corporate hoarding are the principal villains. The right prefers to find the fault in regulation and tax. There is merit in various arguments, even if they always seem to suit the pre-existing prejudices of those advancing them. There are some obvious things that government can try to do, such as addressing skills shortages and deficient infrastructure. There are some obvious things that government ought not to do, such as disrupting the relationship with our most important trading partners. But the fact that the “puzzle” is afflicting a wide variety of countries with different political histories suggests that there is not one simple, catch-all cause or solution.

A politically neutral explanation for low productivity growth is that humanity is simply not coming up with enough breakthrough ideas. Ever since the first clever woman lit the first fire, human progress has been powered by discovery, from seasonal crop rotation, to the steam engine, to the computer chip. Ingenious members of our species are still coming up with smart innovations, but it is argued that none of them is significant enough to trigger a new wave of growth.

Are there any sources of optimism? Some. I’ve a hunch that “driverless cars” are not the miracle solution, and my scepticism is reinforced because so many politicians are trying to get into them, but humanity hasn’t lost its talent for invention. Another hope is that economists are wrong, which they often are. One reason they could be wrong about growth prospects is because it has got harder to accurately measure productivity. They may be too pessimistic about it.

If the future is low growth, our politics will change in ways which could be very nasty. Let’s hope that the economists are wrong. Or that someone out there has a very clever idea.

Source: https://www.theguardian.com/commentisfree/2017/nov/26/life-is-going-to-get-very-nasty-if-we-cannot-solve-the-growth-puzzle

3 Things That Affect When You Should Apply for Social Security

My Comments: As you approach your retirement and your 62nd birthday, this question becomes increasingly relevant.

Retirement is that point in your life when you essentially quit working for money and instead money starts working for you. The challenge is to make sure it’s working hard enough to keep you from running out of money before you run out of life.

Social Security benefits have become an absolute requirement for millions of Americans to maintain an existing standard of living as they age.

by Brian Stoffel \ April 17, 2017

You can choose to take Social Security as early as age 62 and as late as age 70. When to claim your benefits is a question many retirees take a long time to consider. To make the best decision, it’s important to look at how your monthly benefits change based on when you begin receiving them.

Currently, the average retirement benefit check from the program is $1,360, and the average retirement age is the earliest option, 62. But if recipients waited, these checks could get much bigger. Here’s what it would look like for those born in 1954 and earlier:

As you can see, those aren’t small differences. On the one hand, if you wait until age 70, your monthly benefit will be a whopping 76% higher than if you claim right away. On the other hand, if you do decide to delay your benefits that long, you’ll go almost a decade with no Social Security income coming in even though it was an option.

While there are tons of different variables that affect when you should apply for Social Security benefits, the following three questions often play an outsize role.

1. How do you feel when you get up and go to work in the morning?

This may seem like an odd place to start, but hear me out. Most people worry about having enough money to retire — that is an important concern, and we’ll get to it in a bit. But there’s one big blind spot to tackle first: hedonic adaptation.

You’ve likely heard hedonic adaptation being used in the context of getting used to lifestyle improvements, as in, “Even after buying the new car to keep up with the Joneses, Mark was still miserable — that’s hedonic adaptation for you.”

But in truth, it works both ways: We can have much less materially, and not be nearly as depressed about it as we’d expect.

If you want proof, I point you toward a Merrill Lynch/Age Wave survey that came out in 2015. When respondents of different ages were asked how often they felt happy, content, relaxed, and/or anxious, here’s how they responded:

https://infogram.com/percent-who-said-i-often-feel-1ge9m8ny434omy6

And lest you think that this was just a survey of wealthy respondents, it was “nationally representative of age, gender, ethnicity, income, and geography.”

The bottom line is that if you hate your work and you can make ends meet on Social Security plus other sources of income, you shouldn’t wait to apply for benefits.

2. Can you make ends meet?

Of course, we can’t forget entirely about money. In the survey mentioned above, 7% of retirees said retirement was less fun and more stressful than pre-retirement years. The main culprit: financial concerns.

Almost all retirees report spending less in retirement than while they were working, and these expenses continue to fall as people age. Of course, everyone has heard about rising healthcare costs — and it’s true that healthcare expenses do jump. But there’s a host of other realities that keep costs down: less money spent on transportation costs commuting to and from work, a drop in food costs as you can make your own food more often, and a house finally being paid off in full, to name a few.

In general, you’ll need to calculate how much income you’ll get from three streams:

  • Social Security and/or pensions
  • Withdrawals from your own retirement accounts, using the 4% rule
  • Other forms of income

The “other” forms of income could come from rental properties you own or even part-time work.

The bottom line is that you should try living for six months on this income to ensure that it’s suitable.

3. Have you coordinated with your spouse?

Finally, we have to deal with the sobering reality that one partner often lives longer than another. In that situation, Social Security has a simple rule: The surviving spouse gets to either keep his or her current benefit, or assume the benefit of the deceased — whichever is larger.

It’s important to remember that, statistically speaking, wives will live longer than their husbands. And if husbands were the higher earners, they may want to consider waiting as long as possible to claim their benefit, as it maximizes what their wives will receive after they pass away.

In this respect, there are a dizzying number of variables to consider, and I suggest doing further reading to figure out which will be best for you and your partner.

In the end, if you can answer these three questions accurately, you’ve got a good grasp on the factors affecting when to claim Social Security benefits.

Source: https://www.fool.com/retirement/2017/04/17/3-things-that-affect-when-you-should-apply-for-soc.aspx

Forget the 4% Retirement Rule…

My Comments: With much of my time these days building a new business around retirement planning, the question of how long your money will last has huge implications.

The 4% rule evolved in years past using the assumption that it would keep you from running out of money before you died. That assumption is not longer valid, given the age to which many of us live, the increasing cost of health care, and the likelihood of a major market crash on the horizon.

So what to do? Whatever you decide, it’s a crap shoot. However, these thoughts from Dan Caplinger might be helpful.

by Dan Caplinger \ June 11, 2017

Whenever you’re striving toward a financial goal, it’s helpful to have a number in mind. That’s why the 4% retirement rule is so popular among retirement savers: It gives you a way of figuring out exactly how much money you should aim to save toward retirement. Yet there are several ways in which the 4% retirement rule falls short of working perfectly, and some investors feel more comfortable merely using the rule as a starting point and then looking to improve on it.

The appeal of the 4% retirement rule

People like the 4% rule because of its simplicity. To figure out how much you can afford to withdraw from your retirement savings, just multiply it by 4%. You can use the rule to reverse-engineer how much you need to save. If you expect to need $40,000 per year in retirement, then save $1 million, because 4% of $1 million is $40,000.

The 4% rule does have analytic origins, going back to research in the early 1990s that looked at the historical returns of various types of investments. The conclusion of the research was that with a balanced portfolio between stocks and bonds, you could start by taking 4% of your savings the first year, and then increasingly that amount by the rate of inflation every year after that. So as an example, if you saved $250,000 in your retirement account, then the first year, you’d withdraw $10,000. If inflation was 3%, then in year 2, you’d withdraw $10,300. Subsequent payments would grow with inflation, keeping your theoretical purchasing power constant. If you did that, according to the research, you would be able to make your money last at least 30 years into retirement.

Some problems with the 4% rule

The seeming simplicity of the 4% rule hides some flaws. The first is that it’s based entirely on backward-looking performance data. Admittedly, the analysis included some very tough market environments, including the Great Depression. However, there’s no guarantee that future markets might not be worse, and that could lead to the rule no longer working as intended. In particular, bad performance early in retirement has an especially adverse impact on the 4% rule, because the reduction in principal value increases the percentage of your entire portfolio that you withdraw each year. For instance, if you withdraw 4% the first year and then your portfolio loses 50% of its value, then the next year’s withdrawal under the rule will be around 8%.

In addition, there are reasons to believe that current market conditions differ from what have usually prevailed in periods in which the rule worked well. Most notably, interest rates are extremely low, and that has reduced the amount of income that the bond side of the investment portfolio can produce. This will therefore require sales of assets to finance the withdrawal amounts in retirement. Moreover, the risk of capital losses on bond investments is higher than normal because of the low rate environment.

On the flip side, the 4% rule is too conservative in certain circumstances. Because the rule is designed to deal with a worst-case scenario, it is usually far more cautious than it needs to be. That means you’ll have money left over at your death, and while that might be useful for your heirs, you might have missed out on a more secure retirement by not spending as much as you could have.

Can you improve on the 4% rule?

Researchers have looked at the question of how to get better results from the 4% rule. Some of the proposed changes include the following:

  • If you’re willing to allow for the potential of reduced withdrawals if the market performs badly, then it can dramatically extend how long a portfolio can last. Even if you only cut your withdrawal by 5% or 10%, it can nevertheless be enough to allow you to increase your withdrawal slightly without jeopardizing long-term viability.
  • If the market does exceedingly well early in retirement, then it can be viable to boost your withdrawal rate slightly.
  • Making personal adjustments for life expectancy can be useful. For instance, some retirees are living well into their late 90s, making a 30-year period too short and requiring a smaller withdrawal percentage. Yet for others, 30 years is longer than they have a legitimate right to expect, and so a larger percentage might make more sense. Just keep in mind that once you make a decision, it’s hard to go back and change it if it turns out you were too pessimistic in your assessment.

As a starting point, the 4% rule is a useful way to estimate how much you’ll need when you retire. By understanding its limitations, you can look at making refinements that will more accurately reflect your own personal retirement savings needs. That way, you’ll have a retirement strategy that will work best for you.

Source: https://www.fool.com/retirement/2017/06/11/forget-the-4-retirement-rule-heres-a-smarter-way-t.aspx

Daylight Saving Time Is Even Weirder Than You Think

My Comments: I don’t really have a comment. It is what it is and I’m OK with it. It’s too far down on my list of things to worry about.

by Erin Blakemore \ October 27, 2017

People in the United States will feel a bit more rested on November 5, as daylight saving time 2017 comes to an end. The clocks fall back at 1 a.m. local time that Sunday, ensuring another precious hour of sleep and a corresponding extra hour of daylight during common working hours.

You’ve probably heard that Ben Franklin kind of proposed daylight saving time (also erroneously called daylight savings time) centuries before it was implemented, and that the twice-yearly switch was initially adopted to save us money on energy needs.

But if you dig deeper, you’ll find out that the daylight-hoarding tradition has an even more colorful history, affecting international relations, creating nested time zones, and potentially influencing your health.

Here are a few of the lesser-known facts about daylight saving time.

Thrift Wasn’t the Only Reason for Saving Daylight

In 1895, George Hudson, an entomologist from New Zealand, came up with the modern concept of daylight saving time. He proposed a two-hour time shift so he’d have more after-work hours of sunshine to go bug hunting in the summer.

Seven years later, British builder William Willett (the great-great grandfather of Coldplay frontman Chris Martin) independently hit on the idea while out horseback riding. He proposed it to England’s Parliament as a way to prevent the nation from wasting daylight. His idea was championed by Winston Churchill and Sir Arthur Conan Doyle—but was initially rejected by the British government. Willett kept arguing for the concept up until his death in 1915.

In 1916, two years into World War I, the German government started brainstorming ways to save energy. “They remembered Willett’s idea of moving the clock forward and thus having more daylight during working hours,” explains David Prerau, author of Seize the Daylight: The Curious and Contentious Story of Daylight Saving Time. “While the British were talking about it year after year, the Germans decided to do it more or less by fiat.”

Soon, England and almost every other country that fought in World War I—including the United States—followed suit. In those days, coal power was king, so people really did save energy (and thus contribute to the war effort) by changing their clocks.

Daylight Saving Time Is All Over the Map

Today, the idea of springing forward and falling back is a bit more controversial, in part because it no longer really saves energy. But when you hear from a time-change skeptic, consider the source and where they live. If they’re from a more northerly place, they may be inclined to like saving daylight more.

It’s a matter of geography. The further you travel from the Equator, the more drastic the seasons will be. That’s because Earth is tilted on its axis with respect to the sun, so the top and bottom portions of the globe receive more or less sunlight at different times of the year, making the loss of daylight hours more pronounced.

In the middle portions of the planet, the amount of sun is about the same all year ‘round. As a result, the seasons are milder and there’s less of a need to make adjustments to maximize daylight. Just look at a map of the countries that use daylight saving time today to see which regions really find the shift worthwhile.

Arizona’s Relationship to Daylight Saving Time Is … Complicated

Daylight saving time indifference causes one U.S. state—Hawaii—to brush off the time change entirely. Arizona, where scorching temperatures often make night the only bearable time to be outside, also said no to moving its clocks around, because its residents preferred to savor the cool nighttime hours.

“In the summer, everybody loves to have an extra hour of daylight in the evening so they can stay out another hour,” Prerau explains. In Arizona, it’s just the opposite, he says. “They don’t want more sunlight, they want less.”

However, the daylight saving situation within Arizona is even more confusing. While most of the state ignores daylight saving time, the Navajo Nation, which covers part of northeastern Arizona, observes it. Meanwhile, the Hopi Reservation, which is surrounded entirely by the Navajo Nation, does not. And within the Hopi Reservation sits a small slice of the Navajo Nation that, you guessed it, does observe daylight saving time.

Long story short: If you’re driving through northeastern Arizona, you might want to ask for the time instead of relying on your own watch.

Daylight Saving Time Can Have Deadly Consequences

Well, kind of. The transition to and from daylight saving time has been linked to higher heart attack risk, higher car accident fatalities, and other bad outcomes. But Prerau points out that those effects—thought to be due to sleep deprivation and circadian rhythm changes—are just temporary.

“It’s very important for people to understand the difference between short-term, transitional effects and long-term benefits,” he says. “You’re talking about an eight-month benefit versus a one- or two-day negative.”

There’s no way to enjoy those benefits if you do die of a heart attack or get hit by a car during the transition, but Prerau has a point. If you’re able to tough out the sometimes bumpy time shift, you’ll enjoy months with more light—and for many of us, that’s a good enough reason to overlook a few rough days.

Planning for Retirement: a Checklist Approach

My Comments: Some of us are organized and some of us are not and the rest of us are ‘sorta/kinda’ organized. I’m in the ‘sorta/kinda’ organized group.

I am, however, heavily invested these days in teaching others a process to follow when thinking about their future retirement. I’ve created an internet school called Successful Retirement Secrets™ where I’ve written and published two courses on the topic. (click on the image to the right to explore them…)

Meanwhile, for those of you who need help being an organized person, this checklist from Laurie Burkhardt with help from Kelly Henning is a great way to get started.

Laurie Burkhardt, CFP  \ June 26, 2017

As financial planners, we are often asked, “Will I be OK in retirement?” Before looking at a client’s assets and expenses in order to answer that question, we ask corresponding questions such as, “What do you want your retirement to look like?” Each individual’s perspective on retirement is unique. Some people want to remain in their current house and community. Others wish to downsize and stay in the area close to family and friends. There is yet another group that wants to leave the expensive Northeast states and move south or west. Thus, it’s crucial to expand on a client’s retirement goals earlier rather than later.

The checklist below illustrates different items to think about as retirement approaches, from ten years before until right after retirement begins. The earlier one starts planning for retirement, the more prepared one should be not only financially, but also emotionally.

A Strategic Pre-Retirement Checklist

Five to ten years before targeted retirement:

  • Brainstorm retirement goals and dreams of what retirement will look like.
  • Think about where you want to live and whether you want to downsize.
  • Revisit goals and time frame annually.
  • Obtain annual credit report.
  • Pay down mortgages and other debt to strive to become debt-free by retirement age.
  • Revisit progress toward achievement of retirement goal, and adjust retirement contributions and/or spending as appropriate.
  • Review estate planning needs and update documents, titling and beneficiaries as needed. Consider long-term care insurance.

One to five years before targeted retirement:

  • Attend pre-retirement workshop and/or consider personal life coach to help prepare for transition.
  • Get comprehensive medical, dental and vision exams while still covered by employer insurance plans.
  • Consider Social Security claiming strategies.
  • Request estimate of pension or retiree medical benefits.
  • Get educated about Medicare options.
  • Revisit estimated budget for income and expenses anticipated in retirement.

Six to 12 months before targeted retirement:

  • Income tax planning
    • Speak with accountant about expected new income bracket and how to plan for it.
    • Discuss possible Roth conversions or other tax planning strategies.
    • Are you eligible for any outside retirement plan contributions?
  • 401(k) Plan
    • Plan to max out contributions for current year.
    • Confirm that all funds in 401(k) accounts are vested.
    • Confirm whether funds are pre-tax only, or pre-tax and after-tax.
    • Coordinate with wealth manager to keep 401(k) funds in plan or roll to an outside IRA.
    • If rolling to an outside IRA, open new account and obtain account number and custodian address/wire instructions for future deposit.
    • If retiring between 55 and 59 ½, consider waiting to rollover due to options to take penalty-free withdrawals from 401(k) in year of retirement, or take 72t distributions for at least 5 years.
  • Pension Benefits
    • Obtain all pension benefits available through current employer.
    • Determine whether or not a lump sum pension option is available and whether it is preferable for you.
  • Other Qualified and Non-Qualified Retirement Benefits
    • Obtain information on all additional plans offered by the company and information on vesting, tax, and transfer of these accounts.
  • Social Security Benefits
    • Login to http://www.ssa.gov, create account and obtain a current benefits statements.
      • Be sure to complete this step for spouse.
      • If divorced, contact Social Security directly at (800) 772-1213 and obtain information on taking benefits as ex-spouse.
    • Coordinate Social Security Analyzer tool with benefits statements to determine claiming strategy.

Two to three months before retirement:

  • Review Paid Time Off
    • If you have any accumulated sick days, vacation time or other PTO days, determine if/how you will be paid for these days.
  • Advise Supervisor and HR Representative in writing of desired retirement date.
    • A specific date may be agreed upon(e.g., first week in January depending on payroll and other items).
    • Consider date which you will be eligible for year-end bonus or other benefits, including 401(k) matches, profit sharing, or stock options.
  • Request Retirement package of paperwork from HR.
    • Depending on the size of the company, HR will generally provide its own packet of paperwork and forms that need to be completed.
  • Determine date for exit interview with HR/supervisor.
  • Make final decision on all insurance, including medical, dental, vision and life insurance (timing will depend on company policies).

One month before retirement:

  • Obtain the paperwork to roll your 401(k) (or other retirement accounts) out of the plan into an outside account, if that’s the choice you’ve made.
    • Complete paperwork and contact HR to see if plan administrator signature is required.
    • Paperwork will be sent in following retirement date.

One week before retirement:

  • Confirm that HR retirement package has been completed and all relevant documents are signed.
  • Clean-up desk/emails, etc.
  • Remove any personal/private information from work email and computer.

Post Retirement

  • Submit 401(k) rollover paperwork following retirement date.

The Bottom Line

There are many decisions to consider as one prepares for retirement, from healthcare considerations to account logistics. Understanding the timeframe of essential tasks well in advance of your retirement date can be key to reducing stress in the months before you stop working. Employers will have deadlines on paperwork submission, some of which will be your last day of work or thirty days after.

Knowing these deadlines and seeking information in advance is essential. Use all available resources, such as your company’s human resources department and your various professional advisors, to help make the transition as smooth as possible.

Source article: https://www.investopedia.com/advisor-network/articles/090916/planning-retirement-checklist-approach/#ixzz5VuZQfiW8