Life After Work - Will I Be "OK"?

  As a child, I always looked forward to Thanksgiving – almost as much as Christmas.   My fond memories of this holiday continues to make this a special holiday for me.   I grew up Urbana, IL, which was about a 20-minute drive from Chanute Air Force Base in Rantoul (although it sure seemed a lot further to the childhood version of me).   Each year, my family would host 1-2 airmen that could not go home for the holiday.   It didn’t get much cooler for a 10-year-old boy than playing pool and ping pong with an Air Force pilot.   And then I got to sit down at the dinner table with them.   I was in heaven.   Like most families, we had a set schedule for Thanksgiving.   My mom would start preparing the turkey around 10:00 AM.   She always cooked it in a paper bag coated on the inside and outside with butter.   Most people look at me with great confusion when I describe this turkey cooking method, but both my brother and I still ca...

  If you are turning 65 today, you have a 70% chance of needing some kind of long-term care service in your lifetime.   And I’m sure it will come to no surprise to you that the cost of that care is not only expensive but is growing at a rate well beyond the average cost of inflation.   Long-term care costs are a simple matter of supply and demand.   The number of senior citizens is growing every day while the number of people trained to care for them is not keeping pace.   In fact, the latest Genworth study on the cost of long-term care produced the sobering numbers below: Even if you are able to be cared for in your home – which is almost everyone’s preference – you could be paying $75,000 per year for the proper assistance.   Sure, your kids can provide some care and therefore save you a fair amount of money, but even if they are willing and able, do you really want to put that burden on them?   Despite this likely cost, most people elect to self...

    In last week’s blog post, I explained why I had decided to replace my variable annuity that was paying me $10,100 per year with a fixed indexed annuity (FIA) ( Why I'm Replacing My Variable Annuity with an FIA by Scott Stolz (week 19) .   The bottom line is that some of the FIAs available today pay considerably more income than my existing annuity.   I’ll use Fidelity & Guarantee’s SecureIncome 7 – the product I chose – as an example. I’ll be moving approximately $200,000 from my Voya variable annuity to the SecureIncome 7.   I’ll be adding their lifetime income living benefit to the policy.   This optional feature will cost me 1.15% per year, which will be deducted from my account value.   It will add an income base to my contract which is the value that will be used to calculate my lifetime income payment.   This income base will initially be set at the amount I deposit in the annuity and will grow by 7% simple interest per year. ...

  In 2009, at the age of 49, I bought a Voya (previously ING) Architect Variable Annuity just before Voya undertook a series of product changes to lower the amount of guaranteed income provided by the lifetime living benefit feature.   The policy was bought in my custodial IRA account.   My plan was simple.   Start the income at the age of 59 ½ (the earliest age I could begin the lifetime income payments) in order to liquidate the annuity as quickly as possible.   Once the account value reached $0, I would continue to get my lifetime monthly income out of Voya’s general account rather than my own money.   At this point, I need to provide a little educational content on annuity living benefits for those reading this that are not familiar with this concept.   Most annuities today come with an optional living benefit feature that can be tacked on to the policy for an additional charge – usually 1-1.5% per year.   This feature allows the policyhol...