Long Term Care, Ready?

I posted an article about this a couple of years back, but it still looms as a major concern for many of us. I read this interesting article in Motley Fool as well.

Originally posted August 28th, 2014

Long term care is an issue that faces nearly every American. Advances in medical science have resulted in an extension of our quality of life and health. This has also resulted in many more people living into their 80s and 90s. There comes a point where help with daily activities becomes a necessity.

Retirees should be prepared financially for this outcome. Long term care is very expensive and is not typically covered by traditional health care plans. Having a long term care need without adequately planning is usually financially devastating. The government will require that you be destitute before they pay for it. Who wants to rely on government care and be poverty stricken?

Insurance companies of course offer long term care products and these can be very expensive if then insured waits too long to purchase. Once a chronic condition exists getting private insurance may proving to be a daunting task. Having large amounts of cash in retirement accounts can be a great security blanket but long term care costs can easily run into the 6-7 thousand a month range. Funds become depleted quickly at that rate of consumption. Planning is critical. Consultations with professional financial planners is a wise idea.

Furthermore young retirees in their early 60s should consider proximity to long term care facilities and or services when relocating. I have spent a fair amount of time writing about neighborhoods and great places to retire to, but what about long term care?

Vancouver, WA is a big enough city that it has a virtual cornucopia of offerings in the long term care arena. Relocating to Vancouver provides retirees with the peace of mind that they will not have move far or even at all should they need assisted living or convalescent care.

Planning ahead makes for a much easier transition when the time comes for assistance. Often times couples find themselves with one in care and the other still at home. A short drive is always better than a long drive for visits. Above and beyond all the great reasons to relocate to Washington State, taxes, moderate weather, etc. proximity to these types of facilities should also be taken into consideration.

Vancouver proves again to be a very wise choice for retirees.

Best Place To Retire

In recent years, Washington cities and towns have become conspicuous by their absence among the various 'Best Places to Retire' lists in magazines and news articles. Washington used to routinely appear on these 'Top Ten' type lists. I decided to sniff around and find out why Washington State has fallen from favor among these so-called elite retirement locales.

I am finding a running theme lately among the likes of Forbes, US News and World Report, Bankrate.com and others. Housing costs, housing costs, and some housing costs. This is the Achilles heel for the Pacific Coast states. California has long since been largely absent from top retirement lists due largely to the phenomenon of high housing costs. Oregon and Washington are now in that same 'boat'.

Fargo North Dakota has found its way into favor as well as Lincoln Nebraska. Weather clearly has lost its luster among the editors of these various best places to retire articles. Read about Washington weather, here. The economy has played a role but I find that a strong economy is less important for retirees than it is for those working. In fact a strong economy tends to make the cost of living higher. Don't get me wrong, a good economy my is always a good thing, but for retirees it is less of a factor since retirees generally are not concerned with jobs. Retirees tend to benefit more from the national economics than local economics. Washington state however, has a very strong economy and yet it remains estranged lately from the lists of retiree havens.

California, Washington and Oregon all find themselves in the top ten among the 50 US states for median home price. California is #1 among states with Washington at #6 and Oregon at #8. This my friends, is what has created a drain on the Pacific Coast's ability to find its way onto the various "best to" lists for retirees.

This at least partially explains why so many of the new residents of Washington and Oregon are from California. Californians are among the very few that don't view the Northwest as "expensive" for housing. Even Oregon with its oppressive state income tax is far more tax friendly than the tyrannical fiends in Sacramento.

The cost of living is higher in the west than most of the rest of the USA, But living in the west is just better in nearly every measurable way. Among the western states Washington is by far the best place to retire. There are many areas in Washington that offer highly affordable housing near the national average and even below. King County, (Seattle) has over 2 million people and its over-puffed housing market skews the state average to make Washington as a whole seem more expensive than it is. Spokane for example has a median home price very near the national average. Just north of us here in Clark County, both Cowlitz and Lewis counties have median home prices well below the national average.

Even with the West Coast housing penalty, Washington State remains a top choice for retirees. Especially those retiring from another state with relatively high housing costs, such as California. The income tax cannot be overlooked when retiring. Anyone that expects to have pension style income, will be bludgeoned in a state with an income tax.

Vancouver, Washington could easily find itself on just about any 'top ten best to retire' list if housing costs were not included in the formula. Even with its relatively high housing costs, the 'Couv' offers in close access to the Portland Metro area, Oregon's sales tax free shopping and Washington's lack of an income tax. Plus you get the slightly damp but very mild year round weather and some of nature's most spectacular scenery. Washington is still one of the best places to retire.

 

Tax season is here; are you doing two returns?

I have written extensively on this site about the lack of state income tax in Washington State. Many readers may live in another state such as Oregon or California. Unless you live in Washington or one of six other states you will likely be filling out second income tax return this year. Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming have no income tax. New Hampshire and Tennessee have no wage income tax but they do tax dividends and interest which can adversely effect the retired.

Most of the states without an income tax do have a sales tax. A notable exception is the State of Alaska which has neither tax. New Hampshire which has a partial income tax as noted above, also has no sales tax.

Washington State has a sales tax. For retirees and frankly most other people earning legitimate income, a sales tax is better than an income tax. An income tax punishes those that save. A sales tax only effects consumption.

Higher earners get seriously clobbered by an income tax. According to an editorial Oregonian article, Oregon taxes annual income from zero to $3250 at 5% and then 7% to $8150, 9% to $125k, and then 9.9% for the "wealthy". Oregon taxes the poor. That's a special kind of nice; isn't it? According to the Oregonian article 70% of Oregonians fall into the 9% bracket. How is if "fair" that Oregon, one of the nation's "poorer" states ranked 29th in income, has 70% of the people falling into the 9% bracket?

Most importantly, if a retired person diligently saves for retirement and or has a generous pension, states like Oregon will come after you like a hungry lion. Seriously taxing 9% on income over $8150? The compassionate government of Oregon will tax the guy that lives in a tent under a bridge at 5%? Really? That just sucks.

Meanwhile in Washington State the sales taxes do not tax food and medicine and other core essentials so they do not "punish" the poor like Oregon does.

Oregon treats you like you are in the dreaded top 1%, when you are "rich" and make more than a lousy $8151 A YEAR. Oh yes, the state lowers the boom on your decadent lifestyle with a 9% tax on that burger flipping income of $12,000 a year. Please, soak up the full effect of my heavy sludge of sarcasm on this. Seriously Oregon? $8151? 9%, really? According the the Federal government an individual is considered below poverty with an income of less than $11,770 per year. People earning less than $11,770 should pay NO TAXES at all on that income. The Oregon government would have you believe that they are some sort of Robin Hood, but in reality they are just robbers in hoods.

Retirees are well advised to steer clear of states with a heavy handed income tax. Our southern neighbor, Oregon has a tax that brutally offends the poorest among us; and if you are in a more comfortable income bracket, they will plunder you like a 18th century pirate. All the while those vile politicians smile and tell you how well they take care of the poor with your taxes. Oregon's government is a sickening wretch that should be ashamed of that horrendous affront to humanity they call an income tax. That is but one man's opinion; one should do their own diligent research before deciding upon where they shall retire. As always when making any decision that involves taxation consult with your trusted tax professional.

Worried about Winter? Washington has something for everyone...Almost

This was originally posted here, by Rod Sager, June 4th, 2014

Real estate tends to perk up this time of year. The sun is shining, the sky is blue, and the temperature is warm. It is easy to get sucked into the greatest summer weather on this planet. But what about winter? Many retirees would love to have a little winter but hate the idea of shoveling snow. Here in Washington State we have options for your winter wonderland. There are places in the Evergreen State like Mount Baker, that have snow so heavy it rivals anywhere in the world. Fortunately those are places people visit rather than live. East of the Cascade Mountains delivers sunnier weather that is warmer in the summer and colder in the winter than this side here in the west. There are many areas that offer an in-between winter experience.

Here in America's Vancouver we have a very mild winter. It gets chilly but rarely gets truly cold. Heavy snow is a twice a decade event and light snow is sporadic every year throughout the winter from late November to early March. Not much shoveling here. As you move up in elevation so your shovel moves up in usage. Those gorgeous view homes up above 1000 feet will see on average double the snowfall down in the city. Move up another 1000 and it's triple.

West of the Cascades you will find the legendary Pacific Northwest clouds and showers. East of the Cascades is California Dry.

East of those mighty Cascade mountains the mercury will plunge down below zero at times and they tend to stay cold from December through February. The good news over there is that those same mountains that block the warm moist air of the Pacific Ocean also block allot of the clouds. Precipitaion on the eastside is dry, dry, dry. So it does snow often but in small doses. Again places like Ellensburg and the Tri-Cities don't have a heavy snow shovel workout.

Spokane will give you a healthy dose of snow with nearly 4 feet falling annually and that rivals Minneapolis. Spokane is not quite as bitter cold as Minnesota and has a shorter winter. If you hate the shovel stay out of the far eastern part of the state.

In case you are looking around in Washington State I have all these little charts for you to consider regarding snowfall and temps. Data was collected from the Western Climate Data Center.

Planning and Strategies: Retirement House

Fairway Village

Many people as they begin the decade of their fifties start thinking about the inevitable downsize of their home. Sure some people stay in the big house till the bitter end, but most tend to seek smaller accommodations to retire in.

I am among those fifty-somethings making such considerations. I have one child off in the Army and another in his Junior year at college. My wife and I are getting a real taste of the empty nest. A large five bedroom home can feel vacant with just two people in it. Of course once we feel like the boys are established and relatively secure, we can feel comfortable making that down size move. But we could just as well utilize two of those bedrooms for other purposes and just stay put, right?

I read a report that people that live in homes with stairs live on average eight years longer. Just sayin'.

At 55 years old, the retirement adult communities open up. Buying in these developments at 55 has the perk of getting you settled for retirement while you are still employed and working. You can hammer at the mortgage or maybe even pay cash with the equity in the big house. The downside is that the average age in an over 55 community is deep into the geriatric range and that means a generation gap that could be difficult for all but the most socially gregarious of souls.

I am thinking about that moment where the resale value of my home hits a point where I can pull enough cash out of the sale to put half down on the smaller replacement home, borrow on a 15 year note, and still have a lower payment than I do right now. The idea of retiring with a free and clear property is one that my wife and I would like to pursue.

Listed on  local MLS

But we could stay put as well. Continuing to pound away at the mortgage and have the note retired by age 65 could work. These are tough decisions that many people find themselves pondering once the AARP solicitations start rolling in. One current market factor that has a strong influence on such decisions is the persistent low interest rates. Although I am sitting on a comfortably low rate, the current rates have been dancing around the mid to upper 3's on 30 year notes and that means buying the "retirement" house now can yield very low payments for the remainder. 15 year mortgages are in the 2s at times. There is no guarantee these low rates will continue and frankly,

it is unlikely. This low rate scenario puts a bit of pressure on as the uncertainty means waiting could be costly. In some cases waiting could make the decision for you. If rates climb high enough, it could be cheaper to stay put.

Those nearing or just recently in retirement that are convinced a smaller abode is the way to go, ought to seriously consider selling the big home right now and make that move while rates are low and modest home appreciation continues.  

Happy Holidays!

I'm here to wish you the warmest greetings for a great holiday season. You could be enjoying it in fabulous Washington State.

Please peruse through the last couple of years worth of posts to find information about retiring to Washington State.

How Do Good Schools Effect Retirement?

Henrietta Lacks Health and Bio Science High School,
Vancouver, WA

Washington State is very proud of its public education system. Although it does suffer from many government related issues, they are well funded and heavily protected by the state constitution's iron clad wording. There is no down side to a strong education system aside from it taking a larger chunk of the budget. Many seniors that no longer have children in the school system take a less enthusiastic approach. It is often the older crowd voting against school bond measures. So what does all of this edu-speak mean to retirees?

Retirees gain many benefits to a strong local school system. First of all a well educated population leads to high paying jobs that help the local economy. A strong local economy is good for everyone, including retirees. Secondly and often overlooked by those on the sunset trail, is the fact that a strong education system attracts families. Many retirees find themselves a great distance from their families and grandchildren. Washington State offers many wonderful benefits to retirees as it is often rated as one of the best states to retire in. It also offers some of America's best public schools and a strong economy. That means the family can come here to!

How good are Washington State's Schools? Right here in America's Vancouver we have nine traditional high schools,the award winning Clark County Skills Center, the Washington State School for the Blind, the Washington State School for the Deaf, Arts and Academics High School, a Health and Bio Sciences High School, two alternative high schools, and an alternative programs center. These fantastic public schools are not just limited to the 'Couv'. It is a statewide affair. Here in Clark County according to US News and World Report, we have eight nationally recognized high schools and two nationally top ranked high schools.

Education is not something retirees traditional concern themselves with, but it can make a significant difference in their lives whether by drawing their extended family to them or by enhancing economic conditions around them it is yet another reason to retire to Washington.