Monthly Archives: August 2015

5 Great Places You Can Retire for Under $1,500 Per Month

The average Social Security check now stands at $1,335. The average couple pulls in a bit over $2,100 per month from Social Security (assuming both earn benefits).

With so many retirees who have no savings – maybe half of us – and no other pensions, the Social Security check may be the check. Sound grim? It may not be. The reality is that there are great places to call home and live on those kinds of deflated numbers.

The one kicker: get your passport ready, because you’re moving out of the country.

Note: some places may be cheap – much of Mongolia for instance, or Sudan – but this list only has places that meet three key criteria: there already is an established expat community, meaning some English is spoken and some services/amenities aimed at expats are available; safety is high; getting back to the U.S. is straightforward, fast, and easy. That last is crucial for retirees, because most will turn to Medicare for big medical issues and, in most cases, Medicare does not work out of the country.

Where to move?

Cuenca, Ecuador

A perennial all-star among affordable retirement locations, Cuenca is a city of 400,000 with a city center designated a UNESCO World Heritage Trust Site. It is pretty, the weather is temperate year-round and the city is filled with tens of thousands of English speaking expats, mainly from the U.S. and Canada.

Aaron Hazelton, 37 years old, who works with Ecuador Relocation Tours and himself lives in Cuenca, offered a monthly budget: “Rental costs run on average $250 to $550, depending on what you are looking for. Add to that a trip to a local market and you walk away with beautiful fresh fruits and vegetables, about all you can carry, for perhaps $10. A three-course lunch at a sit-down type restaurant downtown will cost you about $3.”

Susan Schenck, 60, said she has lived in Cuenca for six years (she authored Expats in Cuenca, Ecuador: The Magic & The Madness). She added: “I live on $1,400 — my pension — with the same lifestyle I lived in San Diego on, with $75,000.”

Best Dividend Stocks to Own for Safe Retirement Income

Hunting for the best dividend stocks for retirement is not easy, you can find 20 of them in this Conservative Retirees dividend portfolio. Record low interest rates, a mature bull market, unprecedented central bank stimulus measures, and a shaky global economy are just some of the factors complicating the search for safe retirement income.

However, the best dividend stocks for high income possess characteristics that insulate them from many of these risks. These high-quality dividend stocks have healthy payout ratios, maintain conservative balance sheets, generate reliable cash flows, sell recession-resistant products, and have track records of consistently rewarding shareholders with dividend increases.

Many of these companies are also members of the Dividend Aristocrats list, which contains stocks in the S&P 500 that have increased their dividends consecutively for at least 25 years. Dividend increases are a sign of financial health and management’s confidence in the underlying business. The list of dividend aristocrats has historically outperformed the S&P 500 Index over time with less volatility as well.

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Let’s take a look at some of these high-quality dividend stocks for safe retirement income.

Must Read: Credit Suisse’s 7 Favorite Industrial Stocks for the Next 6 Months

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Paychex (PAYX – Get Report)

Paychex has been in business for about 45 years and established a reputation for delivering safe dividend income growth. The company is a major provider of software and services that help over half a million small and medium-sized businesses process their payrolls, manage their retirement plans, and outsource their human resources functions.

The company’s services are all essential needs that businesses must pay every year, resulting in a large base of recurring revenue for Paychex. As a result, the company throws off consistent free cash flow and has raised its dividend at an annualized growth rate of 11.5% over the last decade. Despite the company’s payout ratio near 80%, dividend growth will likely continue at a mid-single digit rate as it keeps pace with earnings growth.

Rent Wars: Boomers and Millennials Face Off For Prime Rentals

It may be a first: two very different generations, Millennials and Baby Boomers, now are competing for the very same apartments, at least in some towns.

“Their preferences are starting to cross,” said John Darby, CEO of The Beach Company, a real estate development company headquartered in Charleston, S.C. “What Millennials desire are becoming the same as Boomers.”

Darby added that he has been in the industry 25 years and cannot recall a time when two different generations so often wanted the exact same apartments.

Exactly what do Millennials (born from 1980 to 2000) and Boomers (1946 to 1964) want in common? Darby said they both want “high end amenities, walkable communities, and they like the flexibility of renting,” as opposed to homeownership.

Bryan Fasulo, an executive with apartment developer Pinnacle Living in Phoenix, added that both liked “hotel type services,” and that may mean dog walkers available for hire, dry cleaning delivered to the door, concierges and attractive community spaces.

In both cases, too, the generations are converging on urban neighborhoods – often in city centers – because of the high level of services and amenities that are readily on offer. In Austin, Texas, 30-year-old Jesse Evans is at ground zero of this battle as a renter in downtown. He also is a regional vice president at property management company Renters Warehouse. “Retirees used to buy a small house,” he said. “Now they are jumping on board with renting. Boomers will continue to be a rental factor.”

In hip Austin, he stressed, a lot of Boomers suddenly are on the downtown scene, often in the very same buildings with Millennials, and he does not see that changing. “We are seeing more Boomers downtown and we will continue to see more,” he said. “They are attracted to the lifestyle.”

Who has more money to throw around in this war? Answers are unclear. Boomers, many of whom are newly attracted to rental communities, may be retired and on fixed incomes – so they may lack big money for rent. Millennials, on the other hand, often are saddled with student loans and many have a taste for finer things (good wines, good restaurants) and that may limit their wallet when it comes to rent. So mark the battle of the budgets as even.

In Austin, Evans said that often Boomers can in fact often out-spend Millennials, but as more of the latter hit 30, that arithmetic is changing. “The older Millennials can compete,” he said, probably because they have moved a few notches up the career ladder and thus command higher paychecks

Consumers Are Claiming an Exemption From the Health Insurance Penalty

Despite the increase in the penalty for not purchasing health insurance, nearly three in four uninsured consumers who used TurboTax filed an exemption in January.

The passage of the Affordable Care Act requires that all consumers purchase health insurance or face a penalty of either $325 or 2% of their household income, whichever was greater in 2015. The data from TurboTax, the San Diego-based tax preparation software company, revealed that 70% of uninsured or partially uninsured TurboTax users claimed an exemption from the tax penalty through January 31. This figure is “in line with last year’s overall tax season data,” said Debra Hammer, TurboTax’s ACA spokesperson. The two most common reasons were the lack of affordability through their employer or geographic region.

Consumers who faced financial difficulties qualify for the health care exemption and do not have to pay the tax penalty, including people with extremely low income where filing a federal tax return is not required, the lowest-priced coverage available either through a marketplace or job-based plan would cost more than 8.05% of their household income or hardships such as being evicted or facing foreclosure, filing for bankruptcy or receiving a shut-off notice from a utility company.

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The data from TurboTax are “consistent with what we see among health insurance shoppers who don’t qualify for Obamacare subsidies,” said Nate Purpura, vice president of consumer affairs at, a health insurance exchange based in Mountain View, Calif.

The cost of health insurance has risen across the board for consumers. Between 2013, the year before the ACA mandates came into effect and 2015, the average monthly health insurance premiums for an unsubsidized, single adult increased by 45% or from $197 to $286, he said.

Pride Shouldn’t Guide Financial Plans for Your Old Age

Pride isn’t going to take care of you in your old age.

No, it isn’t particularly pleasant to think about who’s going to care for you if you aren’t able to do so or who will handle end-of-life care when the time comes. It also isn’t particularly pleasant when you get to either of those points without a plan and simply hope it’s implied that someone among your friends and family will have to step up.

According to a survey from UBS Wealth Management, the greatest fear among wealthy investors as they age is being a burden to children (42%). That ranks higher than fears of surviving on life support (34%) or living in a nursing home (15%). Even though many of those investors would rather not have their children responsible for their care, just 39% of investors have talked with children about who will take care of them in old age. Worse, only 50% have factored healthcare costs into their overall financial plan, and only 23% have saved for their future care.

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Keep in mind, this is after the Census Bureau determined last year that the population of Americans aged 65 and older will grow to greater than 80 million by 2050, and that the number of people likely to require long-term care is expected to more than double from 12 million today to 27 million over that time span.

“Maintaining self reliance is important to the vast majority of investors,” said Paula Polito, client strategy officer at UBS Wealth Management Americas. “Having a plan in place for long-term care before they actually need it will help them avoid burdening their children.”

While you may not want to burden your children, placing yourself in their care likely will — which makes it all the more necessary to have conversations about it early on. The UBS survey found that 47% of respondents who currently provide care described it as a heavy burden, 41% described it as a moderate burden and 12% said it was a minimal burden. Yet, as site discovered in a survey of adults whose parents are still alive, only a little over half (56%) of American parents have a will or living trust document, according to a new survey of adult children. Nearly one-third of parents (27%) do not have estate documents in place and 16% of adult children are unsure if their parents do. Of those that do have a will, 40% have updated it in the last one to five years. What’s more, 24% of adult children don’t know if their parents’ will has ever been updated.

Even when such documents exist, adult children have no idea where they are or what they contain. Over half (52%) of adult children don’t know where their parents store their estate documents, while 58% don’t know the contents of the documents.

“Wills and estate documents can be a touchy subject, but they are necessary conversations to have,” says Andy Cohen, chief executive of “Too often the surviving family members are left not knowing where to find the documents, or worse, have to go through a lengthy and expensive legal process because no documents were ever created.”

It isn’t just 18- to 49-year-olds left in the dark, either. Roughly 29% of 50-to-64-year-olds don’t know where their parents’ documents are stored, and 38% don’t know the contents. For those 65 and older, 23% don’t know where the documents are stored and a startling 44% don’t know the contents.