• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

National Debt Relief

National Debt Relief - A+ BBB Accredited Business - Get Relief From Credit Card Debt, Medical Bills And Unsecured Loans

Talk to a debt counselor toll free:

800-300-9550

Get Relief From Credit Card Debt

Medical Bills and Unsecured Loans

  • Apply Now
    • Qualifications
    • Is This Right For Me?
  • Proven Results
    • Debt Relief Benefits
    • Credit Card Debt Relief
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Login
HomeBlog Personal Finance5 Things You May Think About Retirement That Aren’t True
Video Transcript

Free Debt Consolidation Quote

By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
  • National Debt Relief, LLC BBB Business Review
  • McAfee SECURE sites help keep you safe from identity theft, credit card fraud, spyware, spam, viruses and online scams

5 Things You May Think About Retirement That Aren’t True

February 6, 2014 by National Debt Relief

man thinking on a rockAre you getting close to retirement and believe that you have everything figured out? Well, you may not. Some people spend years or even decades planning for retirement. For others, there is a date in the future on a calendar where they intend to punch out of work for the last time. People craft budgets, calculate portfolio returns and create dreams for how their time and their money will be spent. What this can easily lead to is misplaced confidence in the way things will work out. But for a number of retirees reality will turn out to be much different than their perceptions and expectations. Here are five things that you may think are true but aren’t.

It’s all in the timing

Probably the biggest disconnect is between the date that retirees expect to retire and when they actually leave their full-time jobs. Many financial plans now rely on a person working well past 65 to ensure they won’t run out of money after they retire. One fourth of all workers think they will retire at age 70 or later and another 5% think they will retire at age 65 through 69. But the reality is that some 70% of retirees will stop working before they turn 65. Why is this? It’s due to health problems. You may think that it’s a kind of magic bullet to work to age 70 and then retire. But that’s not the case for many people and you could end up being one of them

I know what I’ll do next

Do you know what you’ll be doing when you retire? Most experts suggest you think outside the box to make sure that you will stay engaged. Let’s suppose, for example, that you were a financial advisor. You believe that when you retire you’ll be spending all that free time in your basement workshop. A better idea might be to volunteer to help in a shop class at a nearby high school. Or if you’d like to earn a little extra money, get a job at a Home Depot or Ace Hardware. The national organization SCORE provides opportunities for people with varied experiences to share what they have learned. If you want to continue to stay engaged in the business community, especially with young people, SCORE could be a great opportunity.

All I need is incomegrandma looking shocked

Not long ago a retiree could look forward to earning a safe 4% or 5% return on his or her investments. Unfortunately, the Federal Reserve’s policy and a weak economy have combined to change that. It’s not true now and it’s not likely to be true for a number of years in the future. You may think all you need is income but what you really need is a certain amount of return, regardless of whether it comes from capital gains, dividends or income. In fact, there is a problem with the “income only” approach because as income yields on bonds rise, you might be getting more income but your net worth is actually going down.

My expenses will go down

Does your retirement plan count on your living expenses dropping by 20%? This could be a very bad assumption. Even if you don’t have a mortgage, you may end up spending as much if not more in retirement. The problem here is that your single largest asset in retirement is time. You could easily end up spending more money just because you aren’t sitting all day at your job and you find new things to do to fill up your day. Many retirees fail to budget for spending money on their “bucket list” of leisure activities or travel. People believe that, “By gosh I deserve this,” and their bucket list turns into a priority list. You need to budget for both your discretionary and nondiscretionary spending and be realistic with both.

I’m totally covered

Another thing that retirees incorrectly assume is that Medicare will protect them from all big medical bills. But it’s not just Corvettes and cruises that can break a retiree’s budget. For example, one expense that can take a big bite out of savings is dental work. You can run up a bill of several thousands of dollars very easily replacing teeth or broken bridgework and Medicare doesn’t cover it. Of course, the biggest bills usually come from a nursing home. Again many people think Medicare covers this but that’s not true. What typically happens is that the husband goes into a home and this chews up all of the couple’s savings. The wife is still alive but doesn’t have enough to live on.

What about the new myRA?

If you have a number of years left before retirement, you might think about opening a myRA retirement account. Of course, this assumes that you can sign up for one through your employer. President Obama announced this new program in his recent State of the Union address. While there are still details to be worked out, it’s clearly designed for people who haven’t yet saved much for retirement. The way this works is that you could start by investing just $25 and then save as little as five dollars per paycheck through an automatic withdrawal. The money will be deposited into the Thrift Saving Plan that’s open to government workers. It earned roughly 1.5% last year and has shown an average return of 3.6% between 2003 and 2012. You will be allowed to save a total of $15,000 in your myRA at which point you will be required to roll it over into a traditional or Roth IRA. You would also have to roll it over after 30 years regardless of how much money you had in your fund.

How much would this help?

The short answer is not a lot. As an example of how this would work, let’s assume you deposit $100 a month in your myRA for five years. You would then have $6300 including the $300 interest you would earn. In other words, a myRA alone isn’t going to be enough to guarantee those “golden years.” And regardless of what you might believe, the returns you would get from a myRA are not guaranteed either. You wouldn’t lose your principle but your account could end up earning less than the 1.5% the Plam earned last year.

Why not a traditional IRA?

What some financial experts have pointed out is that you could do just as good or better by putting your money in a traditional IRA. You could also arrange to have the money automatically withdrawn from your checking account and deposited in your IRA account – just as with a myRA. You are allowed to deposit up to $5500 a year in an IRA and you could continue to fund it for years. Plus, you would have control over how the funds are invested. While you would not have a guaranteed return it’s likely that you could do better by investing your money in a traditional IRA then a myRA. This is because with some good financial advice you should be able to do better than the 1.5% to 3% return you would earn with a myRA.

The money you save is tax exempt5 Money Principles from MyMoney.gov (Part 1)

The money you would deposit in a traditional IRA is tax exempt. In other words, you could subtract it from your income. However, you would pay taxes on the money when you began to withdraw it at age 55 1/2 or later. Alternately, you could choose a Roth IRA. This is where you fund your retirement account with after tax money but the money will be tax-free when you begin withdrawing it.

Do you qualify for debt consolidation?

National Debt Relief
National Debt Relief

National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

Follow National Debt Relief: Facebook Twitter Instagram Linkedin

Primary Sidebar

Consolidate Your Debt!
Find out how NDR could help.
  • Get one low monthly payment
  • Avoid bankruptcy
  • Get out of debt in 24-48 months
Get Your Free evaluation
Free Debt Consolidation Quote
By clicking "Get Free Quote", you agree that the phone number you are providing may be used to contact you by National Debt Relief (including autodialed and prerecorded calls, as well as text/SMS messages). Msg. and data rates apply, and your consent to such contact is not required for purchase.
 Trusted By Our Clients

"Enrolling with NDR was easy. I liked how the rep gave me the exp"

Moderate National Debt Relief Caller: Charlotte Transcribed WE 1/24/2021 Charlotte: Our call is recorded. How did you first hear about National Debt Relief? SABAD: Oh, I was just Googling, “How do you solve for debt collection?” And this is what comes up in the research. Charlotte: Was there any particular reason that you selected National Debt Relief as opposed to the others that came up as well? SABAD: Honestly, no. There's no reason. I just thought this was the best. Charlotte: Tell me about the service that they provided for you. SABAD: The service they provided was getting like, “You have 24 months to 42 months to get debt relief. This is how much you have to pay. You have to [reapply 0:01:19]. We can contact all the credit --” All the details they gave me, actually was knowledgeable. And I talked to one of my coworker, and she told me she did it like a year ago. I'm like, “Oh, I just signed in.” And she's like, “Yeah, they're the best.” Charlotte: What did you think about the enrollment process as far as how easy or difficult would you say it was? SABAD: I believe it was easy. I don't think it was hard. Anybody can do it. Charlotte: Do you remember the name of your negotiator? SABAD: Yeah, I think it was Oscar. I don't remember his last name. Charlotte: Is there anything about him that stood out and impressed you at all? SABAD: The way he explained to me, how he gave me the explanation. He didn’t put me in a pressure. He say, “Hey, take your time.” He gave me like three days to enroll. He say, “Hey, I’ll give you three days. You can go and research. Here’s my telephone number. Here’s my fax.” The way he provided all of it, that’s what made me say, “Hey, I think I can trust these people and do it.” Charlotte: How comfortable did you feel working with National Debt Relief through this whole process? SABAD: 100%. Charlotte: Is there anything about your negotiator that really stood out and impressed you? SABAD: Everything he did impressed me. Charlotte: Is there anything about this process that you would have liked to have seen handled differently? SABAD: Maybe quick -- but I believe it depends on your budget and the time, so I think they're trying their best. But everything’s take a long time. So, I don't wanna be [unclear 0:03:20]. Charlotte: If you had to rate this experience on a scale of one to five stars, five stars is that you would recommend to friends and one star is you're pretty dissatisfied, how would you rate? SABAD: You said 5 is the what? Charlotte: Five is the very highest you could rate them. SABAD: I will say actually 5. My opinion, I would say 5. Charlotte: Would it be okay if I posted your comments as a review on our public website for National Debt Relief? SABAD: Absolutely. Charlotte: I have you at sabadsamatar2014@gmail.com. SABAD: Yes. Charlotte: How would you say that working with National Debt Relief has impact your life? SABAD: It’s impact everything the last two years. I don't think I would survive without them. Whatever happen right now, to me, especially when COVID happened, I'm like, “Thanks, God.” It was the right time for me. I think God opened a door, say, “There we go. This is your right door that I opened.” Charlotte: We’re recorded.

Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating Trustpilot star rating

Sabad Samatar
ConsumerAffairs Reviews

Latest Personal Finance Posts

  • Find a Good Savings Plan for 2021
  • How To Set Realistic New Year Money Goals
  • What Types of Accounts Do Banks Offer?
  • 5 Easy Tips On How To Build Wealth With Low Income
  • What Are The Benefits Of A Virtual Bank Savings Account?
National Debt Relief, LLC BBB Business Review AFCC Top Ten Reviews Gold Top Consumer Reviews Consumers Advocate Trust Pilot
Company
  • About Us
  • Contact Us
  • Blog
  • Careers
  • Corporate
  • Privacy Policies
  • Terms Of Site
  • Disclaimer
  • Sitemap
Products
  • Debt Relief
  • Credit Card Debt Relief
  • Debt Consolidation
  • Debt Settlement
  • Calculators
  • FAQs
Debt Resources
  • Credit Card Debt
  • Medical Debt
  • Personal Loan Debt
  • Unemployment
  • Divorce Debt
  • Retiree Debt
  • Veteran Debt
  • Business Debt
  • Personal Finance
Follow Us
  • Facebook
  • Twitter
  • Linkedin
  • Instagram
  • Pinterest

© 2021, National Debt Relief, All Rights Reserved.

Disclaimer
Disclaimer
Disclaimer