Retirement Living News

November 2009

HEADLINES  (Click on headline to read story)

• Study Examines Aging Boomer Workforce; 
  Provides Steps to Help Older Job Seekers
• Tax Foundation Report Shows Sales Tax Rates 
  With State and Local Taxes Combined
• New Web Site Promotes Senior Volunteer Opportunities
• Ten Best Retirement Havens Overseas
• Abuses by Subprime Lenders Now Appearing in 
  Reverse Mortgage Market
• New Book: Working Longer -- The Solution to the 
  Retirement Income Challenge

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

Study Examines Aging Boomer Workforce; 
Provides Steps to Help Older Job Seekers 

A new study from the MetLife Mature Market Institute reports that many Americans over the age of 55 plan to work at least until age 69, but that most who look for a job face challenges in finding one. Yet, Department of Labor projections indicate that the 55+ population will account for almost 93 percent of the net increase in the U.S. Civilian Labor Force between 2006 and 2016. 

The research found in Buddy, Can You Spare a Job? The New Realities of the Job Market for Aging Baby Boomers paints a sobering picture, but also contains essential insights and advice for older job-seekers. It combines a survey of 1,200+ individuals ages 55 to 70 with in-depth interviews of both job-seekers and employment experts. 

Conducted in collaboration with David DeLong & Associates, a research and consulting firm with expertise in workforce issues, the data suggests that to be successful older job-hunters must adapt to the changing workplace by adopting new attitudes, specific skills and a fresh set of expectations. 

"The fact that so many job-seekers over 55 have difficulty finding work means such individuals need new solutions to compete," said Sandra Timmermann, Ed.D, director of the MetLife Mature Market Institute. "Largely due to the economy, many of those looking for work may not have the money to retire. For this group, finding work is a necessity and they would benefit by making major changes in what they present about themselves to potential employers." 

The study lists "The Significant Seven" -- the most common mistakes older Americans make when they are looking for a job, as exemplified by the following common faulty assumptions: " 

• 'I'll just do what I was doing before." 
• "My experience speaks for itself." 
• "I don't have time for this touchy-feely stuff about what work means to me."
•  "I know! I'll become a consultant...!" 
• "Of course I'm good with computers."
• "I'll just use a recruiter for some career coaching." 
• "I've always been successful, so why should things be different now?" 

Instead, older job-seekers and mid-career employees will need to recognize five critical success strategies, the report says: 

1. Acknowledge the New Realities of the Job Market - Anger about perceived age bias won't get you a job. The fact is there are still opportunities for older job-seekers; these will increase in many sectors as the recession recedes. In the meantime, older job-seekers can do three things to better understand the market. First, identify nearby industries and organizations in the region that are stable or growing. Second, look for organizations with a workforce culture that respects all workers. Finally, older job-seekers should look for opportunities in small- to medium-sized companies, which create the majority of new jobs. Self-employment is one other option. 

2. Reframe Your Experience to Demonstrate Future Value - Boomers must identify and articulate what specific value they can bring to an organization, while simultaneously recognizing that their underlying skill set must constantly evolve. For example, knowledge of Internet marketing was still new for most marketing managers eight years ago. Today it is a prerequisite for working in marketing. It's not just about networking and brand building. It's about clarifying what you have to offer and developing the contacts you need to be taken seriously to compete in this job market. 

3. Nurture Your Network - Every job seeker needs to use their existing network, but it's especially critical for older job-seekers. It's easiest to do so when you're clear about your passion and you can connect with people who have similar interests. Discovering your zeal for an area lets you naturally develop and demonstrate expertise, which connects you to people with related interests. These connections are more likely to be a source of new job opportunities than a network of individuals with unrelated interests. Not all networking is about meeting people who might help you find work. It should also be about learning. "Find a volunteer organization with younger people. It's an advantage to be able to say, 'I've been working with 20-year-olds." 

4. Update Computer Technology Skills - The most consistent finding from interviews was the need for older job-seekers to update their computer skills. Older job-seekers who aren't familiar with Facebook and LinkedIn need to learn about them -- fast. That doesn't mean aging Boomers have to reorganize their lives around the latest communication and networking technologies. But they should try them and be able to talk about them, so they aren't caught unprepared the next time a 40-year-old hiring manager asks, "Are you on Twitter?" Older job-seekers, in particular, must invest time to address this challenge directly, if they hope to stay competitive. 

5. Do the Math - Then Manage Your Ambivalence - It may be late for older Baby Boomers to start planning their retirement finances, but they should recognize the conflicting pressures they may have about work and retirement. Despite financial need, a significant segment of those interviewed were ambivalent about staying in the labor force. Job counselors shared stories of program participants consistently sabotaging themselves in job interviews because they were torn about success in their search. Older job-seekers should be clear about their actual financial needs, especially for consistent and stable sources of retirement income, as they struggle with making a decision about finding work. 

"Older job-seekers who don't recognize that they're viewed differently in the job market are in for a rude awakening," said Dr. David DeLong, author of the study. "Lots of aging Boomers will need late-career employment in the years ahead and this study shows what they have to do to make themselves relevant and successful in the changing employment market." His company, David DeLong & Associates, is a Concord, Mass.-based research and consulting firm with expertise in building future workforce capabilities, workforce planning, and knowledge transfer and retention solutions. 

To read the 39-page report, click here. 
                                                                                    Top

Advertisement

Keep Your Life Insurance: Stop Paying Premiums 
Do you have life insurance of $500,000 or more? See how you can sell your old policy profitably, pull cash out and get a new policy for half cost. Read Stuart Estate Planning's Special Report "7 Secrets To Slash Your Life Insurance Costs." Get Your Report 

Tax Foundation Report Shows Sales Tax Rates 
With State and Local Taxes Combined

Tennessee, California, Washington state, Oklahoma and Louisiana have the highest combined state and average local sales tax rates, according to updated information released by the nonpartisan Tax Foundation. On the other end of the scale, Delaware, Montana, New Hampshire and Oregon all have the lowest combined rates of 0 percent. 

"Sales taxes are at the same time transparent and opaque," said Tax Foundation Staff Economist Kail Padgitt, Ph.D., who authored Tax Foundation Fiscal Fact No. 196, "Updated State and Local Option Sales Tax." "Taxpayers can easily see sales tax rates by looking at the receipt for any purchase, but depending on the locality in a specific state, there may be a variety of local option sales taxes in addition to the state rate." 

The states with the highest combined state-local rates are Tennessee (9.41 percent), California (9.06 percent), Washington (8.78 percent), Oklahoma (8.44 percent) and Louisiana (8.43 percent). The states with the lowest non-zero combined rates are Alaska (1.61 percent), Hawaii (4.38 percent), Maine (5 percent), Virginia (5 percent), Wisconsin (5.42 percent) and Wyoming (5.42 percent). 

Four localities in central Alabama have the dubious distinction of having the highest combined sales tax: Brookwood, Coaling, Coker and Vance all have a total sales tax rate of 11 percent, with 4 percent going to the state, 5 percent going to Tuscaloosa County and 2 percent to the city. 

California has the highest statewide general sales tax rate of 8.25 percent (including a 1 percent mandatory "local" add-on rate), and six states tie for the second-highest rate of 7 percent: Indiana, North Carolina, Mississippi, New Jersey, Rhode Island and Tennessee. Colorado has the lowest non-zero statewide rate of 2.9 percent, followed by seven states with a 4 percent rate: Alabama, Georgia, Hawaii, Louisiana, New York, South Dakota and Wyoming. 

The states with the highest average local sales tax rates are Louisiana (4.43 percent), Colorado (4.34 percent), New York (4.3 percent), Oklahoma (3.94 percent) and Georgia (3.02 percent). The states with the lowest non-zero average local rates are Pennsylvania (0.22 percent), Hawaii (0.34 percent), Minnesota (0.34 percent), Wisconsin (0.42 percent) and Utah (0.66 percent). 

The Tax Foundation is a Washington D.C.-based nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937. You can read the Fiscal Fact report by clicking here. 
                                                                                         Top

New Web Site Promotes Senior Volunteer Opportunities

Seniors who want to remain active and engaged often turn to volunteering. A new government Web site sponsored by the Corporation for National and Community Service is promoting volunteerism for seniors. The site, www.getinvolved.gov, makes it easier for seniors to find volunteer opportunities around the country. 

Those age 55 and older can use the Web site's search engine to locate volunteer opportunities by interest and location. They can search in interest areas such as animals, homelessness, politics, and sports, among others. Most of the opportunities are flexible so seniors can volunteer when and where their schedule allows. 

In addition, through the Web site, seniors can sign up for one of the following Senior Corps' National Service Programs, which connect seniors to service opportunities in their communities: 

• RSVP offers volunteers age 55 and over a variety of service opportunities in their local communities. 
• The Foster Grandparent Program connects volunteers age 60 and over with children and young people with exceptional needs. 
• The Senior Companion Program brings together volunteers age 60 and over with adults who have difficulty with the simple tasks of day-to-day living. 

To learn more about Get Involved, click here. 
                                                                                        Top

Ten Best Retirement Havens Overseas

Some people believe that retiring overseas would be paradise. The cost of living may be less than it is in the United States. However, Forbes.com, in its October 15 posting, wrote that seniors will not find paradise anywhere. Each country is unique with its own assets and liabilities. The key to a successful retirement as an ex-pat is carefully matching your own personal priorities and finances to the country that has caught your eye. 

Forbes identified its own list of the 10 best retirement havens, based on a wide variety of criteria ranging from safety to retiree-friendly visa requirements to decent medial care. The countries on their list included Austria, Thailand, Italy, Panama, Ireland, Australia, France, Malaysia, Spain and Canada. 

While no place is perfect, some countries rank high in one area but lower in others. Australia is well-regarded by one rating service, the Country Brand Index, as the most livable place in the world. (For information on the Country Brand Index go to http://www.countrybrandindex.com/country-brand-rankings/. But if you plan to return to the U.S. frequently, it's a long flight. Canada is No. 2 in the Country Brand ratings and certainly convenient for Americans, but its harsh winters are well-known. Italy scores high on quality of life, medical care, and even cost of living and climate for retirees residing in the Southern parts of the country. But its complicated taxes and bureaucracy require patience. 

If you're a sun-worshiper determined to protect your assets from overreaching Western governments, consider countries like Panama or Malaysia. 

If you are solidly middle-class with a taste for high culture, then there are pleasant surprises to be found in Europe. Who would have known, for example, that France is so friendly to American retirees?  

Or consider Ireland. Its top personal income tax rate is 43%. That's not terribly appealing on the surface, but a couple over 65 is entirely exempt from Irish tax on any income below $59,000. 

If you are you eager to live abroad and not interested in learning foreign languages, that's a good argument for Australia, Ireland or Canada. The key to lowering costs and receiving first-rate medical and other services in foreign countries is the ability to "work the system," and to do that, you have to speak the local language passably well. 

On the other hand, going totally native can bring on unexpected and powerful bouts of homesickness. Kathleen de Carbuccia, president of the Association of Americans Resident Overseas, recommends that prospective retirees seek out cities, towns or villages where there is an existing American or English-speaking ex-pat community. Fellow ex-pats will be of great help during those inevitable moments when cultures clash, and they'll perhaps help you see the humor in the situation. 

Decent and affordable medical care is a key issue for retirees, of course. Most nations, when a retiree applies for a visa at their consulates, require proof of income, such as private or public pension payments and bank account statements, as well as proof of private medical insurance. They don't want seniors who haven't paid into their health care systems to become a burden on the locals who have been paying into the system all their lives. Nevertheless, it is possible to find health insurance.  

Keep an eye out for problems in your plans. Most American retirees abroad receive their income in U.S. dollars; their expenses are in a foreign currency. Managing this current risk is one of the most difficult elements of living abroad, and it is likely to be a growing issue, as we enter a period of prolonged dollar weakness. 

If you calculate you'll have to live month-to-month on your pension and Social Security payments while in a European city, then consider village life, or a lower-cost alternative like Thailand, where you'll have enough income to maintain a cash reserve and a fine quality of life. No one, after all, wants to be forced home when the dollar drops 25 percent, as it can sometimes do in a period of just a couple of years. 

But there is a way to eliminate even the currency risk, if that is your priority. Panama, the gateway between the Pacific and Atlantic oceans, has adopted the U.S. Dollar as its official currency. Move there and your assets and liabilities are matched. 

A good resource to help you sort out the best places to live overseas is International Living Publishing based in Ireland. Its Web site -- http://www.internationalliving.com/ -- provides access to a wide range of information and publications, and includes its own top retirement haven list.
                                                                                           Top

Abuses by Subprime Lenders Now 
Appearing in Reverse Mortgage Market

Abuses and abusers from the subprime mortgage market have begun showing up in the reverse mortgage market, putting at risk the equity and savings of millions of seniors. That's the main finding of Subprime Revisited: How the Rise of the Reverse Mortgage Lending Industry Puts Older Homeowners at Risk, according to a report issued by the National Consumer Law Center. 

"In the reverse mortgage market, seniors face some of the same aggressive lending practices that were common in the subprime lending boom," said Tara Twomey, an NCLC attorney and author of the report. Well-funded marketing campaigns and perverse incentives offered to brokers are targeting seniors' home equity and using reverse mortgages as their tools." 

The report states that many of the same players that fueled the subprime mortgage boom - ultimately with disastrous consequences - have turned their attention to the reverse mortgage market. Lenders, including some of the nation's largest banks, view that market as a source of profits that have dried up elsewhere. Mortgage brokers see it as a new source of rich fees. 

U.S. Senator Clair McCaskill, D-Mo., supports the findings and said early last month when the report was released that it "validates the need for regulatory improvements in this industry to protect America's seniors as well as our tax dollars." 

The National Consumer Law Center is a nonprofit organization that seeks marketplace justice on behalf of low-income and vulnerable Americans. To read the 28-page report, click here. 
                                                                                       Top

New Book: Working Longer -- The Solution to the 
Retirement Income Challenge

Daily headlines warn American workers that their retirement years may be far from golden. The average worker needs more retirement income than ever, due to increased life expectancy and soaring health care costs. But the main components of the retirement income system -- Social Security and employer-provided pensions -- are on the decline. What's more, fewer employers are providing retiree health insurance, forcing households to purchase their own coverage or do without. 

This bleak picture has inspired calls to fix Social Security, shore up employer pensions, and redesign 401(k) plans. But as Alicia Munnell and Steven Sass show in this thought-provoking book, the most effective response to the retirement income challenge lies elsewhere -- in remaining in the workforce longer. At first blush, it may seem almost Orwellian to suggest that saving retirement requires reducing its length. But working longer does not mean working forever. By staying on the job for another two to four years, retirees in 2030 can be as well off as those in the current generation. 

The authors both work for the Center for Retirement Research at Boston College. Munnell is the director and Sass is the associate director. 

Working Longer investigates the prospects for moving the average retirement age from 63, the current figure, to 66. The authors ask whether future generations of workers will be healthy enough to work beyond the current retirement age, as well as whether older men and women are willing to do so. They examine companies' incentives to employ older workers and ask what government can do to promote continued participation in the workforce. Finally, they consider the challenge of ensuring a secure retirement for low-wage workers and those who are unable to continue to work. 

Spending a few additional years in the labor force can make a big difference. By continuing to work until their mid-60s or beyond, most individuals should be able to secure a reasonably comfortable retirement. Implementing such a change on a large scale will not be simple, however. It requires thought and planning on the part of individuals, employers, and the government. In Working Longer, Munnell and Sass explain what each of these groups can and should do to keep the American dream of retirement alive. To order a copy of the 207-page book, priced at $29.95, click here.
                                                                                          Top