09-26-2019 Columns


How can you make your money last during retirement?

It’s probably safe to say that many of us are concerned about having enough money to cover our retirement years. In fact, some surveys have shown that we are more frightened of running out of money than we are of dying. What can you do to help alleviate these fears? Your first move is to create a retirement income strategy, and you’ll want to develop it well before you need to use it. While there are many ways to develop such a strategy, you may want to consider these three key elements: Withdrawal rate – Your withdrawal rate is the percentage of your portfolio you use every year during your retirement. So, for example, if you retire with a portfolio worth $1 million and you choose a 4% withdrawal rate, you’ll be taking out $40,000 per year. Your withdrawal rate will depend on several factors – your age at retirement, the size of your portfolio, potential earned income, date at which you start taking Social Security, and so on. Clearly, when deciding on a withdrawal rate, you’ll want to reach the “Goldilocks” solution – not too much, not too little, but just the right amount. Reliance rate – Your reliance rate is essentially the percentage of your overall retirement income that comes from your investment portfolio – your IRA, 401(k) and other accounts. It’s called a reliance rate because you rely on this portfolio for your income. The higher your reliance rate, the more you will rely on your portfolio to provide income during your retirement, and the greater your sensitivity to market fluctuations. Income sources – The more sources of lifetime income you have – such as Social Security and a pension from your employer – the less you may be relying on your investment portfolio to cover your retirement goals. However, many private employers have moved away from pensions in favor of 401(k)-type plans, and Social Security will only provide about 40% of your preretirement income in retirement, assuming your earned income is average for U.S. workers, according to the Social Security Administration. Consequently, you may want to consider options such as annuities, which can provide lifetime income benefits. It will take careful planning to put these three factors together in a way that can help you build enough consistent income to last throughout your retirement – which could easily extend two or three decades. And there’s no single formula for everyone. For example, while an annuity could offer lifetime cash flow and help you reduce your reliance on your investment portfolio, it also involves fees and expenses, plus lower liquidity than other sources of income, so it may not be right for everyone. Fortunately, you don’t have to go it alone when taking all your retirement income factors into account. You may want to work with a financial professional – someone who can evaluate your individual situation and then recommend retirement income solutions based on your appropriate reliance rate, withdrawal rate and potential income sources. By getting the help you need and by following a suitable long-term strategy, you can ease some of the stress that comes from wondering if your life span might eventually exceed your financial resources. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.


Stay vigilant to avoid getting scammed

Scams are on the rise and those who are seeking to defraud people are particularly targeting the elderly and vulnerable people throughout Southwest Michigan and the rest of the state and country. As we become wise to the tactics of scam artists, their efforts are becoming even more clever as they constantly try new ways to disguise who they are and trick people into giving them money or valuable information. There are a number of active scam operations going on, including a common scam where a person makes unsolicited phone calls claiming to be an IRS official or from Medicare. State and federal tax officials will never initially contact you by phone to demand immediate payment, and they will never threaten to call the police to arrest you for not paying. Another scam involves a person pretending to be someone’s grandchild to coerce them for money over the phone. Readers should also be aware of a voice-recording scam going around – do not respond to questions that can be answered with “yes” from unknown callers. Despite what a scammer might say, you are in control of your information. Stay vigilant and never give your credit card, bank account or Social Security number over the phone. Nor should you ever click on unfamiliar email links or open suspicious emails from unknown senders. I encourage everyone to report suspected scams to the attorney general’s Consumer Protection Division by calling 1-877-765-8388. Victims of scams should contact their local law enforcement agency. If scammers were able to get credit card or bank account information, residents should contact their financial institution immediately. The attorney general’s office also offers “Consumer Alerts” at www.michigan.gov/ag under “Services,” including alerts on identity theft and popular scams. Add home and mobile phone numbers to the National Do Not Call Registry by calling 1-888-382-1222 from the phone number you want to register; for more information, or to register online, visit www.donotcall.gov.


K-12 budget

Last week, I voted in support of the Legislature’s bipartisan school aid budget, which includes the largest-ever investment for Michigan students in the state’s history. The budget provides a total of $15.2 billion for K-12 schools. Under the plan, per-pupil funding would increase for every student in Michigan by $120 to $240 – a total increase of more than $300 million in the foundation allowance while the governor’s recommendation capped the increase at just $180 per student. We’ve achieved this increase by budgeting responsibly and not raising taxes on hardworking Michiganders. As it relates to specific parts of the school aid budget, we’re increasing Career and Technical Education funding to $50 per student and are including $16 million in equipment grants for a total of nearly $74 million in CTE investments. Our budget triples the investment in literacy coaches; includes $510 million to help at-risk students; triples funding for English language learners; includes $60 million more than last year to reimburse school districts for special education costs, and provides $7 million for isolated school district funding and includes a tiered formula to allow a wider distribution of funds to rural districts. Our budget also includes additional investments in school safety grants and school-based health and mental health programs. Funding our schools is the last thing that should be politicized. I’m proud that this budget was bipartisan and earned the support of ninety of my colleagues on the floor. As we proceed with the rest of our State’s budget, I’m hopeful this same spirit of bipartisan cooperation will continue. As always, my office is available at 517-373-1403 or PaulineWendzel@house.mi.gov if you have any questions or comments about the budget process.


Mosquito bite prevention

With an increase in cases of Eastern Equine Encephalitis reported throughout the state of Michigan, officials at the Berrien County Health Department continue to emphasize that residents take personal precautions to prevent mosquito bites. Eastern Equine Encephalitis (EEE) is a rare virus that is transmitted to humans through the bite of an infected mosquito. There was one confirmed case of EEE in Berrien County as well as one suspected case that is pending confirmatory testing. Although there have been elevated numbers of EEE cases in Michigan this year, the illness remains extremely rare. Not all mosquitoes are capable of transmitting the virus, and not all cases of EEE result in severe symptoms. Mosquitoes that can carry the EEE virus tend to favor woodland and/or swampy habitats. Individual cases of EEE are more likely to occur in those over the age of 50, under the age of 15, or those who may have weakened immune systems from underlying medical conditions or treatments. At this time, the Berrien County Health Department is not recommending that community groups cancel outdoor evening events, such as sporting events. If practical, groups can consider relocating outdoor events to an indoor space. The Health Department is recommending the following actions be taken: When outdoors, apply insect repellents that contain the active ingredient DEET, or other U.S. Environmental Protection Agency-registered product to exposed skin or clothing, and always follow the manufacturer’s directions for use; wear long-sleeved shirts and long pants when outdoors. Apply insect repellent to clothing to help prevent bites; maintain window and door screening to help keep mosquitoes outside; empty water from mosquito breeding sites around the home such as buckets, unused kiddies pools, old tires, or similar sites where mosquitoes may lay eggs. More information regarding EEE can be found at www.bchdmi.org or www.michigan.gov/emergingdiseases.


Take necessary precautions against EEE

Michigan is one of the states currently affected by eastern equine encephalitis (EEE), a virus carried by mosquitoes that is highly dangerous to humans and animals.

Unfortunately, in Michigan, three people have already lost their lives to this virus and other folks around our state are severely ill.

I want to make sure the people of southwest Michigan are taking the necessary precautions to ensure they are keeping themselves and their loved ones safe.

The Michigan Department of Health and Human Services has recommended people wear long sleeves when they are outsides after dusk. Please make sure you are also wearing insect repellent when you are outdoors, especially around standing water. And if you or someone you love is exhibiting symptoms, please take them to the hospital immediately.

Officials at all levels of government are continuing to closely monitor the situation.

Fall is a beautiful season – especially in Michigan – and we all want to enjoy it. By taking these safety precautions, you minimize the risk that you or someone you love will be affected by EEE.

To learn more about other important legislative issues, follow me on Twitter at @RepFredUpton or visit my website: upton.house.gov. You can also call my offices in Kalamazoo (269-385-0039), St. Joseph/ Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).

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