Could you live off Social Security alone?

By Michelle Singletary | Washington Post

When it comes to retirement, there’s one question that is sure to get a lot of people to save: Could you survive if you only received Social Security?

But the fact is millions live off their monthly Social Security benefit check. How do they do it?

Barbara Woodruff, 65, of St. Louis told Grandparents.com how she manages.

Her check: $633 a month. This is much less than the national average.

As of June, the average Social Security benefit was $1,254.78 per month.

Woodruff is collecting less than many folks because health problems reduced her working years, she told Grandparents.com’s Daisy Chan. As Chan points out, Social Security benefits are based on your earnings during your working years.

Part of the reason Woodruff can survive on just Social Security is that she gets subsidized housing. She pays $189 for a one-bedroom apartment. She also receives $33 a month in food stamps.

Woodruff has a lot of company in trying to survive on Social Security. As Rebecca Lake reported for Investopedia.com, 21 percent of married couples and 43 percent of single seniors count on Social Security for 90 percent or more of their income.

“Social Security isn’t a substitute for building a solid retirement base, and if you’ve still got time before you retire, consider looking for ways to shore up your savings,” Lake wrote. “Start by chipping in as much as you reasonably can to your employer’s retirement plan, especially if it comes with a matching contribution. If you don’t have a 401(k) or similar plan at work, an individual retirement account (IRA) is another way to grow your savings. The more you set aside now, the less pressure you’ll feel to make your Social Security benefits stretch.”

If you think you’ll be relying just on Social Security, here are some articles with tips on how to make the money stretch.

Retirement rants and raves

I’m interested in your experiences or concerns about retirement. Did you retire early and if so, how did you do it?

Is retirement everything you hoped for? Are you scared you’ll run out of money?

What you share might help others. So send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put “Retirement Rants and Raves.”

One recent rant came from a friend.

“So, you worked hard, saved your money, cut off your adult children, and retired,” Maribel Soto of Burke, Va. “Are you prepared for retirement’s close companion: aging? The consequences of aging will have a monumental effect on your financial position. It will not be enough to have perfect adult children who did not deflate your retirement wealth. Do your adult children/loved ones have the competence and capability to navigate the health care, legal, and social services systems to ensure your well-being and quality of life?”

Soto asks some good questions considering her own experience.

“Try telling the Social Security Administration that the court has declared you as your mother’s legal guardian,” she wrote. “Show up with all your court records, and they will say, ‘We do not recognize the court’s assessment, we have to conduct our own, meanwhile we can’t tell you why her benefits have been stopped.’ Yet, the assisted living facility has to be paid. That is just the tip of the iceberg.”

Here’s Soto’s poetic take on aging:

Loving father,

Loving mother,

Loving son,

Loving daughter,

Only one faces Medicaid, Social Security, the court system, the banks, and the creditors.

. . . and she is not enough.

Retirement blog

I believe that wealth happens intentionally and for me this means reading as much as I can about all things financial, especially retirement.

Retirement assignment

There’s so much to know and keep watch on when it comes to retirement planning. So every week I’ll have a home assignment for you.

This week, if you haven’t done it already, set up your online Social Security account, which allows you to check your information, including how much you’ll get once you start collecting benefits. Knowing this information is key to retirement planning.

 http://wapo.st/2wOAZjx

Your Own Home in Mexico’s Up-and-Coming Beach Town For $90,000

By Jason Holland | International living

Dozens of white-sand beaches…the clear azure Caribbean stretching to the horizon…and warm weather (and water) year-round…

Mexico‘s Riviera Maya is certainly a haven for beach lovers. And this stretch of coast on the Yucatán Peninsula welcomes millions of vacationers seeking to soak up the sun every year. But there is still a place, away from the main tourist trail, where you can get all the benefits of that Caribbean lifestyle and enjoy life in a fun, funky, but convenient small town.

Tulum is about two hours from better-known Cancún and 45 minutes from chic and bustling Playa del Carmen. Although it is growing and developing quite rapidly, it’s still worlds away from the crowds. Tourist do find their way to Tulúm but they tend to be laidback and stay in hostels and boutique hotels—this is not a rowdy party crowd. And it has a distinctly Mexican atmosphere, mixed in with a small but significant expat population of retirees, business owners, and others.

That’s what makes daily life in Tulum so appealing. You can enjoy real fish tacos ($3 for three) and ceviche ($8 for huge bowl) at a local’s place like El Camello. (I like to eat at street stands a lot too, with tacos at 70 cents each.) You can also enjoy international cuisine, gourmet fare, and a cappuccino at any number of cafés. But this isn’t a made-for-tourists town, so there are also well-stocked grocery stores, banks, car washes, medical clinics, mechanics…anything you need for daily living.

If you’re ready for a day out on the water, you can rent a beach chair and umbrella at the beach-side “hotel zone,” which is about a mile away from the main town. There are plenty of restaurants right on the water where you can stop in for lunch with a view. Every day the Caribbean is impossibly blue—I never get tired of looking at it.

Opportunities to live right on the shore in Tulúm are limited. On the beach in town much of the land is taken up with boutique hotels and beach clubs. So, if you’re buying a home or land you’ll have to go inland a bit—but you’re still just a 10-minute drive from the water.

A new one-bedroom apartment in town is listed for $90,000. There is also a pool in the tropically landscaped common area. Nearby is a two-bedroom condo for $148,000. This one also has a terrace, access to a pool and a Jacuzzi. Condos like these are popular in Tulúm, with many new developments on the horizon.

But there are also good-value homes on offer. In a gated community, just a short walk to the beach, is a two-bedroom, one-bathroom home for $128,000. Close to the town center is a three-bedroom home for $269,900. This one comes furnished and has its own swimming pool.

All these places put you in town, where you can walk or bike everywhere for shopping, going out for a bite to eat, or to visit friends. And you’re still close to the beach. Ideal.

There’s a distinctly bohemian flare to Tulúm—a legacy of its time, decades ago, as a stop on the hippie backpacker trail. There are plenty of yoga studios and natural healing centers…art galleries…and chilled out beach clubs.

But mostly the funky side of Tulúm expresses itself in the relaxed attitude locals and expats alike share. This is a town where flip flops, shorts, and t-shirts are the uniform…and there’s always time to stop and chat with a friend you see on the street.

http://bit.ly/2veHlZJ

What Makes Mexico So Special?

By Jason Holland |  International Living

It’s easy to think of the countries of Latin America as being pretty much the same.

Thanks to a shared history as part of Spain’s empire until the 19th century, many of the countries of Latin America (excluding Brazil, Guyana, Suriname, and French Guiana), share a common language (Spanish with regional accents), religion (Catholicism, although other denominations have flourished), and many cultural hallmarks.

But you will find many differences among the different Latin countries. Mexico for example has many unique features that set it apart.

After moving to Mexico a year ago from my previous home in Costa Rica, and having traveled extensively through Panama, Nicaragua, and Peru, I’ve thoroughly enjoyed discovering all the ways Mexico is special.

First, consider just how big Mexico is. At 758,400 square miles, it’s a bit less than three time the size of Texas. In that vast territory, stretching from the Caribbean and Gulf of Mexico to the Pacific, you have a wide variety of climates, cuisines, cultures, landscapes, and lifestyles.

Head to the white-sand beaches and warm aquamarine Caribbean waters of the Riviera Maya and you’re likely to dine in beach restaurants on ceviche (seafood marinated in citrus) and fish tacos in the shade of a palapa (open-sided structure thatched with palm leaves). That’s world’s away from the narrow cobblestoned streets and restored colonial homes, grand cathedrals and churches, and immaculately manicured plazas of San Miguel de Allende’s UNESCO World Heritage centro, where you can enjoy a café con leche (coffee with cream) in a courtyard built 300 years ago.

In Pacific coast resort towns like Puerto Vallarta and Mazatlan you’ll find plenty of dining and entertainment options…and seaside fun. Sayulita just to the north is a bohemian surfer paradise. And in Mexico City you have, of course, one of the world’s major metropolises, sprawling across 573 square miles with a population of 21.2 million in the greater metro area.

So too is the weather different. You have it all in Mexico. From warm and humid on the coasts (cooling down to pleasant temperatures in the winter), to the eternal spring-like climate of the Colonial Highlands and Lake Chapala, to the dry heat of the desert climate of Baja California, which only receives 15 or so days of rain per year. There’s a climate for everybody.

Mexico is also the Latin American country most familiar to Americans and Canadians. They come here for affordable dental work. They vacation at the resorts of Cancún, Cabo San Lucas, and Puerto Vallarta, and elsewhere. They drive RVs down to snowbird communities all over the Pacific coast and Baja Peninsula. And they settle all over the country in retirement or to start businesses. There are said to be 1 million Americans living in Mexico, either full- or part-time.

So Mexico feels familiar, which helps the transition if you decide to move down. On top of that, as a modern country Mexico has plenty of products and services that you know from home. High-speed internet is widely available. Cellphone service, including 4G and LTE, is widespread. Medical care is top notch and affordable. You can find large shopping malls with Cineplex’s showing movies in English. And there are stores like Walmart and Home Depot that have brands you know on the shelves.

It definitely has made my family’s life here easier having all that. But that’s not to say that Mexico is like the U.S. but cheaper. Far from it.

Along with all these modern conveniences, you have the rich Mexican culture. When you live in Mexico it seems like there is always some sort of fiesta or parade, whether it’s a religious festival, civic celebration, neighborhood gathering, or just friends getting together. Fireworks, music, and dancing…costumes, masks, and traditional dress…sometimes the party goes well into the night. I’ve certainly enjoyed getting in on the action.

There are countrywide celebrations and holidays but also events specific to certain regions or towns, often for a patron saint’s birthday, or based on centuries old traditions of the local indigenous groups.

For example, in Mérida, locals feel strongly Yucateco (from the Yucatán peninsula) and take pride in the local dances, music, and tradition of poetry. Along with those aspects of local culture, you’ll also find unique cuisines around Mexico.

Back to Mérida, as well as elsewhere on the Yucatán Peninsula, you have dishes not found elsewhere in the country like cochinita pibil, which is roast pork marinated in citrus juice and achiote, a recipe that has its origins in the ancient Maya culture. That’s one of my favorites. Oaxaca, inland from the southern Pacific coast, is where mole, the rich chocolate based sauce, is from—it’s just one of the culinary traditions fostered by the intense mix of indigenous populations there. I must say trying new dishes is one of my favorite parts of being in Mexico.

No matter where you go in Mexico, you’ll find friendly and welcoming people. As an expat you’re spoiled for choice about where to settle down—there’s climate, lifestyle, and landscape for everybody. But no matter where you go, you’ll enjoy modern conveniences and the rich Mexican culture.

http://bit.ly/2vdA8cq

Canada’s Retirement Poverty Crisis Is Avoidable If We Act Now

By Jerry Dias | huffingtonpost

Decades of attack on the stability of pensions in Canada is nothing short of a crisis looming over the future of our economy, and it must be addressed now before too much damage is done.

We are already beginning to see the effect of past pension cuts.

The stark fact is that fewer and fewer Canadians can look forward to a decent pension. As well, with all the pressures of daily life and raising families, few of us find it possible to save for retirement.

Consider that just over 20 years ago, only 3.9 per cent of seniors lived in poverty. By 2015, the rate was 14.3 per cent — something to be ashamed of, and the situation is unlikely to get better as pensions continue to be attacked.

Seniors spend their pension benefits on the day-to-day things they need: food, clothing, shelter, maybe some travel and gifts for the grandkids. It’s the kind of basic, everyday spending that keep shops open and companies profitable. When pensions are cut, or in some cases eliminated, that spending drops, and the economy suffers.

What is truly costly is setting up a system in which seniors in the future will not have the money to cover basic living costs, let alone help to drive a consumer economy.

It’s pretty basic, really. A consumer economy needs consumers, including senior consumers. And that requires decent pensions.

As well, those with good pensions tend to rely less on public services. This benefits us all, and must be a priority for policymakers and employers.

Employers and many politicians will tell us that decent pensions are too costly. Labour leaders hear that at the bargaining table all too often. But what is truly costly is setting up a system in which seniors in the future will not have the money to cover basic living costs, let alone help to drive a consumer economy.

All too often, employers take the shortcut of cutting pensions to address immediate issues, cutting the future incomes and spending ability of the next generation of retirees in the name of cost savings today. It’s a short-term gain, but it results in long-term pain for many.

This is an issue not just for workers and their employers, but governments as well.

Our federal government has done some good things, including returning the age of eligibility for the Old Age Security to 65 and boosting the Canada Pension Plan, but other measures have not been as positive.

Bill C-27, now stalled at second reading in the House of Commons, would allow defined benefit pension plans (which guarantee a decent pension for life) to be converted to target benefit plans in federally regulated sectors and Crown corporations. This means that workers who spent their working lives building a secure pension, and planning their retirement accordingly, could suddenly see it pulled out from under them.

While the future of C-27 remains unclear, we’ve seen what can happen with target plans.

Just last week, Unifor was forced to take drastic action after Northstar Aerospace refused to top up pensions for its workers and retirees after a deficit in its pension that will result in a 24 per cent cut to benefits because the company is closing. The union occupied the plant, and before being ordered out by the labour board, we were able to make the issue a national story.

The occupation managed to put pensions on the radar of many Canadians, who learned about a big, profitable company that could easily afford to top up its promised pensions but was simply choosing not to do so. Legally the company can get away from it, but that’s not that point. Corporations should morally and ethically have a role and a responsibility to give seniors their fair share. It’s only right, especially when you consider the hefty profits that companies such as Northstar or Sears make on the backs of workers after years of service.

This is just one incident, but it illustrates two vital issues: the threat posed to pensions, and the need to make the public aware. Both must be addressed.

It is vital to get the message out about the importance of good defined benefit pension plans to workers, employers, policy makers and the general public — many of whom do not yet have a decent pension themselves.

The labour movement will continue to take up this fight. Not just Unifor, but all unions and labour bodies will need to push for decent pensions to ensure a stable future for our economy.

Organized labour can also help by setting a good example. At Unifor, we encourage all staff to retire by age 65, even though the law no longer requires it. This is because we believe that workers have a responsibility to make way for another generation.

As well, when workers know that they will retire by age 65, and will need to ensure a strong income for, hopefully, decades to follow, they fight harder for decent pensions during their working lives — and that can only be a good thing.

It’s a fight we cannot back away from, or afford to lose.

http://bit.ly/2wYgDC5

Portugal, Mexico and Malaysia top overseas retirement list

By Jim Weiker | The Columbus Dispatch

Retirees weary of Florida, Arizona and California can instead look to Portugal, Mexico and Malaysia.

Those three countries took up six of the top 10 “Best Places to Retire Overseas” list prepared annually by the international real-estate service Live and Invest Overseas.

Topping for the fourth year in a row is the Algarve region, on the southern tip of Portugal, where retirees can live comfortably for about $1,700 a month, according to Live and Invest Overseas.

Following Algarve are Valletta, Malta; Mazatlan, Mexico; Abruzzo, Italy; SaintChinian, France; Kuala Lumpur, Malaysia; Lisbon, Portugal; Budapest, Hungary; San Miguel de Allende, Mexico; and George Town, Malaysia.

Southern Europe, Central America and Southeast Asia dominate the full list of 30 destinations, which is based on 13 factors including cost of living, climate, crime, infrastructure, health care, taxes, language, recreation and entertainment.

http://bit.ly/2vKPbc8

4 Reasons Why Americans Retire in Mexico

By Justin Walton | Investopedia

Retirees living in Mexico enjoy a low cost of living, warm climate, natural beauty, modern infrastructure and one of the world’s most intriguing cultures. Many airports throughout Mexico offer short, direct flights to the United States, making it easy to return home or to have visitors. And, of course, it’s just over the border from the U.S.

The low cost and high quality of Mexico’s healthcare system also attract many retiring Americans. With more than one million Americans living in Mexico, it is clearly not a fad.

Retiree Real Estate Developments

Many real estate developments have been built throughout Mexico specifically for American retirees. Oceanfront developments in Baja California, 30 minutes from the California border, offer luxurious amenities at a fraction of the cost of the same in the U.S. As of 2016, a three-bedroom oceanfront condo in the San Diego area cost around $3.5 million with $35,000 in annual property taxes. A comparable property just south of the border in a specially designed retirement community could be had for as little as $350,000 with only $1,000 in annual property taxes.

Thriving Expat Communities

Many traditional tourist destinations in Mexico not only welcome travelers but also cater to American retirees. Puerto Vallarta, Lake Chapala, San Miguel de Allende, Baja California and Cancun are among the most popular with Americans. These areas provide a wide range of real estate options, from modest housing in good neighborhoods to high-end gated communities with 24-hour security.

The economies in these areas are driven by North American tourists and retirees. Most businesses have English-speaking employees, and restaurants usually have menus printed in English. Adding more familiarity, most Mexican cities have stores found in the U.S. such as Walmart and Costco.

Affordable Quality Healthcare

Certainly one of the largest factors for retirees to consider when moving abroad is the availability of quality healthcare. Many are surprised to find the healthcare system in Mexico is not only very good, it is actually world class and very affordable. Costs for common surgeries and procedures can be 25% to 50% of what is paid in the U.S. Doctors and dentists are commonly educated and trained in America and Europe, and their facilities are usually supplied with the latest equipment and technologies. Many foreigners travel to Mexico from all over the world for medical treatments or procedures. Medical tourism has boomed in Mexico because many procedures and treatments, which have proven to be successful, are either extremely expensive or not yet approved in other countries.

As of 2017, an office visit with a doctor or specialist cost approximately $35 to $50, according to International Living. House calls were around the same price. Lab tests clocked in at about a third of the price paid in the United States, and a CT scan cost 25% of what is paid for the procedure north of the border. An overnight stay in a private hospital room is under $100 on average, and a visit to a dentist for teeth cleaning costs around $30. Prices have risen in Mexico, but also in the U.S., so the general difference seems to be about the same.

Infrastructure and Communications

While not as advanced as in the U.S., Mexican infrastructure and communications systems are improving. Most populated areas of the country have good cellular coverage and widely available high-speed Internet. These factors help make Mexico a popular choice for those looking to semi-retire by managing their business while sitting on a beach with a laptop.

In 2013, Mexico announced plans to invest $320 billion through 2018 to improve its infrastructure and communications in an effort to establish the country as a true emerging economic leader in the 21st century. Improvements to highways, rail lines, airports and shipping ports will only improve the nation’s economy and quality of life.

http://bit.ly/2v8VSBg

What if the retirement advice you’re getting isn’t quite right?

By Michelle Singletary | The Washington Post

There’s no shortage of retirement advice from financial professionals to regular folk who’ve retired and are now sharing their perspective on retired life.

But here’s the thing to keep in mind as you consider retirement recommendations. What seems perfectly logical on paper doesn’t necessarily play out in person.

That’s the point Paul B. Brown of the New York Times makes in a recent post: Three Things I Should Have Said About Retirement Planning

“I had co-authored a couple of books on the subject — one when I was in my 30s and another in my 40s — but now that I am north of 60 and retirement is a far less abstract concept, I look back on what I wrote in a different light,” Brown wrote.

He’s got more perspective, he says. He’s more empathetic.

— Typical advice: You can work longer to save more. Brown’s take now: “I wrote it was just a no-brainer to work until age 70, if you can. While my math was right, what I now realize is just how hard it is to keep working as you age.”

— Typical advice: Once you eliminate the expenses for raising your children, you can save more for retirement. Brown’s take now: “I used to believe that people edging closer to retirement usually had the ability to save more, since child-rearing expenses were no longer a factor. So, I blithely wrote, you could take all that money you had been putting toward college, for example, and invest it for retirement. Well, our ‘baby’ graduated five years ago, and now all that tuition money is going to home repair.”

— Typical advice: Spend on the big things now before you retire and transition to a fixed income. Brown’s take now: “Our oldest got married 3,000 miles away in Sonoma Valley, Calif., a couple of years ago, and not only did we fly in various family members who would have otherwise been unable to attend, but we rented a huge house for a week and hosted anyone and everyone who wanted to come by. I wouldn’t have had it any other way.”

I loved that Brown revisited his advice acknowledging that life can get in the way of the best of plans. So as you prepare for retirement, factor in a lot of “what ifs.”

What if you can’t or don’t want to work until you’re 70? I don’t want to be tied down to a job until my 70s. I’d like to spend my 60s, traveling and doing financial ministry work at my church and in prisons.

My husband and I are in our preretirement planning phase and have realized that our children are still going to need some financial assistance beyond the undergraduate college expenses we’ve saved. Starting this fall, we are covering graduate school for our oldest. Yes, that’s money we could put toward our retirement, but we want to make sure she and her siblings – should they also decide to go to graduate school – don’t start their young adult life off with debt.

When it comes to advice, I tend to put more weight on the wisdom from people who’ve “been there and done that” and have come out okay. So with that perspective, read this from NerdWallet’s Liz Weston: Retirement Advice From Retired Financial Experts

Retirement rants and raves

I’m interested in your experiences or concerns about retirement. Did you retire early and if so, how did you do it?

Is retirement everything you hoped for? Are you scared you’ll run out of money?

Sharing your story might help others. So send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line put “Retirement Rants and Raves.”

I heard from a lot of you who were forced to retire.

Catherine C. from Gaithersburg, Md., wrote, “I retired early at age 58 due to my mother’s failing health — stroke and Parkinson’s disease. I was the only one of her four children who lived near her and could help. She had been widowed at age 50 and went back to work as a legal secretary after having been a homemaker for 20-plus years. I had planned to go back to work once my mother was stabilized in a continuing care facility. However, her health was precarious and it fell to me to take her to medical appointments, fill her pill dispensers (morning, afternoon and evening), keep her apartment stocked with the foods she liked and wash and iron her clothes. I did this for 16 years. She died 1 week shy of her 97th birthday. I do not regret one moment of this. She was a spectacular mother who put four kids through college and encouraged each of us to follow our dreams.”

Catherine and her husband saved well enough that retiring early didn’t impact their retirement.

“We consider ourselves fortunate,” she wrote. “We learned a lot from our parents. My mother was Michelle Singletary before there was a Michelle Singletary! She believed in living below your means. We have followed in her steps — in our home for 30 years, older cars on the driveway, no bling, no designer clothes. We do splurge on trips to see friends around the country and the occasional dinner out. We are in pretty good health, but we know that could change in a second. My husband retired four years ago at 63. His company was going through a reorganization and he took a buyout. We are enjoying retirement, but we keep a close watch on our pennies. It’s wonderful to get up in the morning and have the day unfurling before us. We both do volunteer work, which keeps us busy and connected to our community. We have a dog and walk her several times a day. Have found some amazing parks that way. We are reconnecting with old friends from college and other volunteer work we have done in the past. At some point, we will downsize to a smaller place in a lower cost area ,but we’re not there yet.”

Chuck Butler of Fenton, Mo., was forced to retire. He’s 62.

“The company that I helped start in 1999 was bought out and the deal closed this year,” Butler wrote. “I was told I was to retire the day the deal closed. I was no more ready to retire than the man on the moon, but I had prepared, savings and investments wise for this day for years, and I do not have a fear of running out of money before I’m 95. I doubt I live that long, as I was diagnosed with Stage 4 metastatic renal cell cancer 10 years ago. I have battled cancer for 10 years, all the while working. I was given a fair severance that included some payment for continued insurance through COBRA. But that runs out in a year. The main problem I have is that at 62, my COBRA insurance will run out before I hit 65, and be eligible for Medicare. I have about a year of private insurance that I’ll have to pay for my wife, and me and youngest son that is in college. And THAT is something I did not plan for. So, I would warn all people that are getting ready to retire early, to check out the cost of insurance before they make that move. It’s an eye opener.”

http://wapo.st/2vnU3UA