The Top 8 Cities for Retirement in the U.S. in 2019
Once you reach retirement age, it’s important that you are able to manage your finances properly. Stretching the dollars you’ve saved may mean you’ll want an inexpensive place to live out your retirement. If you’re looking for U.S. cities with a low cost-of-living, check out our list below.
Where to retire in the United States in 2019?
8. Cleveland, OH
Cleveland’s annual living expenditures total around $36,000. This figure factors in important items such as your housing, healthcare and transportation costs. Frugal spenders who have managed to save a modest amount each year throughout their working lives will have no trouble managing their expenses in this city.
7. Augusta, GA
You can expect to spend $35,781 on an annual basis should you retire in Augusta. In addition to low costs for your basic needs such as food, housing, medical and transportation expenses, there are other reasons to choose this city in Georgia. Relatively warm summer temperatures are a major draw and many current residents report a high happiness index.
6. Brownsville, TX
There are several cities in the state of Texas that make excellent choices for retirement living. Brownsville is one such city, boasting a low cost of living of only $35,461 each year. Because it’s Texas, you’ll also enjoy warm or moderate temperatures all year round. If you want to experience other cultures, you’ll find a large Spanish-speaking community in Brownsville that is eager to welcome newcomers.
5. Toledo, OH
We’re back to Ohio, where you’ll only have to spend about $35,095 annually to enjoy a relaxing retirement lifestyle in Toledo. Groceries for an entire year will only cost you $3,375 and even the highest estimated expense – transportation – comes in at an annual total of $6,814. Current residents report high happiness across various age groups and enjoy access to many of the city’s amenities.
4. Memphis, TN
Memphis offers you warm temperatures and friendly greetings for just $33,859 in annual costs. The city combines a laid-back atmosphere that is perfect for easy-going retirees along with the amenities and upscale venues one might expect from a major metropolitan area. If you’re looking for a slower pace as you enter retirement, but don’t want to sacrifice the modern conveniences of a major urban area, you should definitely consider Memphis as your retirement destination.
3. Jackson, MS
A move to Jackson might be perfect for you if you enjoy distinctive culture coupled with a low cost of living. Annually, you’ll only need to spend $33,676 to enjoy a pleasant lifestyle in Jackson. This, combined with the area’s Southern charm and culture make it an appealing option. Jackson is also currently undergoing revitalization, so you’ll be able to see the old merge with the new during this transformation.
2. Detroit, MI
Detroit is another place where you’ll see history and culture come together with modern innovation. Retiring to this city will only cost you $33,356 each year, which includes everything from housing to transportation. The metro area borders Canada, so you can experience the unique influence of the early French settlers. While parts of the city are sparse, the city is still a modern metropolis with plenty to offer to keep you entertained during retirement.
1. Birmingham, AL
Birmingham tops our list because we’ve found that it’s one of the least expensive cities to live in across all categories. Housing costs are a little higher on average than some other cities we’ve cited here, but Birmingham makes up for that with much lower costs in most other areas. Average healthcare costs for this city are comparatively low, as are the transportation costs. Birmingham capitalizes on this by offering modern, urban areas and attractions at more affordable prices than some bigger cities. Even as you stretch your dollars, you’ll find plenty of opportunities for entertainment or new experiences here.
This list showcases our top eight picks for affordable retirement choices in the U.S. While we’ve given you the best overall annual average costs, keep in mind that these can vary somewhat depending on things like your specific transportation needs (public or private) and your grocery budget. Your personal finance plan may be able to reduce these costs even more.
How To Pay For A Senior Living Community With Your Life Insurance Policy
It’s a common refrain: seniors who have always thought they would want to stay in their home as long as possible have a change of heart when they realize how convenient and enjoyable a senior living community might be. Oftentimes, however, there is a high, one-time entrance fee that can range from tens of thousands of dollars to hundreds of thousands of dollars. These entrance fees are used for future long-term care costs. Additionally, monthly prices for such facilities can range from $1,500 to $6,000.
Seniors may be drawn to retirement communities for different reasons—the availability social connections and arts and enrichment activities, the convenience of meals and other services, or the understanding that the regular upkeep of a house has become too burdensome. But since studies show that only about 3 percent of Americans buy long-term care insurance, the desire to move into an all-inclusive community can also bring plenty of financial uncertainty. Even those who have engaged in careful retirement planning are often unprepared for the mounting expenses, and long-term care becomes more expensive every year.
Enter the life settlement, an option for seniors who are holding onto life insurance policies they no longer want or need. By selling an unwanted policy for a payout larger than the surrender value, people over 65 can use the funds to help pay for the entrance fee and/or monthly costs of a retirement community. Life settlements can be the answer for those who find that their monthly income is insufficient to pay for the living situation that best suits their needs in their golden years. A life settlement serves seniors financially two ways: 1. by providing a sum of money to help meet expenses and 2. by removing the burden of paying regular insurance premiums.
It’s easier than ever for seniors to research life settlements and, if they qualify for a favorable sale, to walk through that process with a life settlement company like Magna. The first step is to use Magna’s simple life settlement calculator tool to determine initial eligibility, and from there an individual can schedule a phone call with one of Magna’s settlement specialists to learn more about the settlement offer and the steps to convert life insurance into a windfall.
If your senior living situation is less than optimal and the lack of resources has become a barrier to moving into that retirement community you have been researching, find out today if a life settlement might be the answer. Every day more seniors are learning that their old life insurance policy has hidden value that can improve their lives now.
Skyrocketing Premiums Present Challenge For Universal Life Policy Holders
Older Americans today have many excellent reasons to pursue the sale of a life insurance policy in a life settlement, but one of the most prevalent reasons is the prohibitive cost of paying premiums. And for those maintaining a universal life policy, a recent Wall Street Journal article reports that some are paying double or even triple their original premiums because of an historic drop in interest rates.
According to the piece by Leslie Scism in the September 19, 2018 Wall Street Journal, many policyholders are finding that universal life hasn’t held up well over time, especially when a decade of low interest rates have depleted the tax-deferred savings account linked to the policies. The savings accounts are designed to offset the cost of renewing the insurance each year, but as interest rates have stayed down the accounts have been insufficient to stave off skyrocketing premiums.
The article cited one case study in which a 55-year-old had purchased a $1 million policy in 1988 with an annual premium of $12,000. By the time that individual turned 80 in 2013, the savings account was gone and the premium had jumped to $50,000 a year. In another case, an 85-year-old retired teacher was paying $30,000 a year for his three universal life policies—three times the premiums when the policies were issued.
One expert on the insurance industry, John Resnick, told the Wall Street Journal that many seniors “are sitting on a ticking time bomb, and they don’t even know it.” The article goes on to say, “Universal life is among the reasons Americans are approaching retirement in the worst shape in decades.”
Those who believe they are stuck paying exorbitant premiums while also trying to fund retirement costs like healthcare and housing must be educated about options like life settlements. Rather than surrender a policy, an individual faced with prohibitive premiums might be able to sell his policy for a much higher payout.
Seniors shouldn’t let prohibitively high premiums chain them to a policy that is doing them more harm than good. Depending on the health impairments of the insured and the cost structure of the original policy, a life settlement could yield a windfall considerably higher than the surrender value. When premiums become burdensome or the purpose for originally purchasing the life insurance policy no longer exists, a life settlement can turn a liability into an instant asset.
Providers like Magna stand ready to answer any questions seniors or their advocates may have about life settlements, and they can even access our simple life settlement calculator to determine their eligibility for a sale of their policy.
Life Settlements are like Reverse Mortgages
According to the National Institute for Retirement Security, the deficit of retirement savings in the United States is between $6.8 and $14 trillion. As the cost of retirement precipitously rises, it’s more important than ever that seniors stay informed about sources of extra income like reverse mortgages and life settlements.
The features and requirements of reverse mortgages and life settlements are different, but each is a vehicle to create a source of extra cash for retirement. Seniors shouldn’t hesitate to do their own research and ask their financial advocates for information about these two opportunities that create immediate resources from long-held assets.
What follows is a look at the primary differences, along with some similarities, between reverse mortgages and life settlements:
A life settlement turns the liability of an unwanted life insurance policy into an asset through the sale of that policy for a cash payout. A reverse mortgage allows homeowners to convert part of the equity in their house into cash. Both create opportunities for seniors to find value from investments they have already made.
In most cases, life settlements are available for individuals over 65, although in some cases younger policyholders can qualify if they have certain health impairments. Reverse mortgages are generally a possibility for homeowners who are age 62 or older. Unlike life settlements, which are more favorable for seniors with health impairments, reverse mortgage eligibility has nothing to do with medical status.
Whereas both tools can help meet financial needs in retirement years, they differ in the amount and delivery of the cash payout. Life settlements are distributed in one lump sum, whereas reverse mortgages often come as a regular payment from the lender to the mortgage holder (hence the term “reverse mortgage.”) Another difference is the determination of the transaction value; in a life settlement, the amount paid to the policyholder is determined by the settlement market, while the payout in a reverse mortgage is determined by the appraisal value of the home. Both products have factors that can reduce their payout amount—the price structure of the policy and health of the insured for life settlements, and the presence of liens on the property for reverse mortgages.
Both life settlements and reverse mortgages are gaining in popularity among retirees, and seniors can find peace of mind in the fact that both are regulated—reverse mortgages by the Federal Housing Authority and life settlements through growing state laws that now cover 90 percent of the U.S. population. For more information on the requirements and potential benefit of a life settlement, visit Magna Life Settlement’s FAQ today.
How A Life Settlement Can Help Resolve Key Man Insurance Issues
Key man insurance is often a common strategy to protect the interests of a business, particularly a small business that could be in peril if its founder, president or other key employee passes away suddenly. But what options do a company or retiring key employee have when that policy is no longer necessary? In some cases, a life settlement can provide a resolution that is much preferable to a policy surrender.
One key consideration for a company weighing its options regarding key person insurance is the reason for the employee’s departure. If a key employee leaves for another opportunity while he or she is still relatively young, the business will be better off surrendering the policy. But the situation is markedly different when a key man or woman retires because of advancing age or health issues. Particularly if that person is in poor health, a life settlement might be the best way for the company to recoup some of the costs it paid out in premiums over the years.
Often a company will offer to sign the insurance policy over to the departing employee as part of retirement package. That individual’s decision to accept or decline the policy will be contingent on the costs of the premiums and the level of life insurance that person already carries. The retiring employee might inherit the policy, then opt to investigate a life settlement, or if the company is left holding the policy it can also pursue a sale to a settlement provider.
Another circumstance that could spur the possibility of a life settlement for key man insurance is a significant change in a company, such as a sale or a merger, that shifts that person’s role and makes them less vital to the company’s success. In a cost-benefit analysis, the business leaders might decide that the expense of the premiums is no longer necessary compared to the potential effects of losing that employee.
Several variables dictate whether a settlement is a more profitable option for an unneeded life insurance policy, most notably the health of the insured and the original price structure of the policy. A company holding key person insurance on an employee who no longer works there needs a path of action to get some equity out of the policy, and a life settlement could have a considerably higher yield than a surrender. To determine whether your key man insurance policy is a good fit for a life settlement, consult Magna’s life settlement calculator today.
How A Life Settlement Can Enable A Housing Upgrade
Housing can present a good news-bad news scenario for seniors; many have been in their homes long enough to see them paid off, but limited retirement income makes it difficult for them to keep up with home repairs. A smaller budget, paired with rising costs of healthcare and other late-in-life expenses, make it tempting for seniors to defer maintenance on their house.
Retirees might cut costs by cancelling their lawn care or pest control contract or by putting off repairs that they know need to be tackled. Whether it’s a new roof, more energy efficient windows, wood replacement or plumbing issues, it is common for homeowners over 65 to postpone necessary repairs because of financial worries. The unfortunate result is a home that is deteriorating, losing value and, in some cases, creating a hazard for the seniors living in it.
Some non-profits and ministries have organized programs to provide free home maintenance for seniors, and those groups can be a godsend. But because upkeep of a house is an ongoing task, most seniors need more than occasional nonprofit help to keep an older home in good condition. In many cases, seniors are realizing that a smaller, less time-consuming house would suit their stage of life better, but they don’t have the funds to even think about a move.
A life settlement can be the answer to this housing dilemma. Like an old house, an old life insurance policy can outlive its necessity and actually become a burden. In many cases, that policy can be sold to create an extra source of income, and the cash obtained from the settlement can make a way for seniors to transition to a more favorable living situation.
The profits from a life settlement might be the boost a senior needs to move into a new home, possibly a townhome, a house in a gated neighborhood or an apartment in a retirement community. There are options for seniors that take away many of the standard maintenance concerns and allow individuals over 65 to enjoy their golden years with much less stress over house issues.
Some seniors might not want to move, but a life settlement could provide them with enough money to complete all of those repairs that they have been putting away for years. The end result could be a more efficient, pleasant and attractive version of the home they have loved for years—a place to continue making memories with family or friends. In either case, a life settlement may be the key to unlocking either a new or remodeled home. To find out if you might qualify for a settlement, use Magna’s handy life settlement calculator.
Life Settlements: When Do They Work?
Misunderstanding about the life settlement market causes many seniors to disregard what can be an excellent option for an unneeded life insurance policy. Fortunately, the guidelines of life settlements and the variables that affect an individual’s eligibility for a settlement are easy to grasp, and investigating the settlement option can be a difference maker for a senior seeking extra income. This paper explains in detail the two primary factors that determine eligibility for a life settlement.
Among the key subjects covered in this paper include:
- The two primary factors that influence a policy’s value and the advisability of a life
settlement are the insured’s level of impairment and the cost structure of the policy.
- Policyholders with serious health impairments won’t often be able to realize the true
value of their policy in a surrender.
- A life insurance policy issued at a higher rating is more likely to fetch a high life
settlement amount than one that was issued with a less favorable cost structure.
Eligibility for life settlements does vary depending on the structure of the policy and the health of the insured, and this paper details the specifics of those variables. Fill out the form to read the paper in its entirety.
How to Convert from Term to Universal Life for the Purpose of a Life Settlement
One misperception about life settlements is the idea that only those with universal policies can benefit from a settlement. In fact, individuals with term policies that they no longer want or need might be eligible for a cash windfall if they understand how to convert their term to universal.
It’s an all-too-common scenario: A policyholder allows a term life insurance policy to lapse because he doesn’t believe it will be worth anything on the settlement market. But a term policy can have considerable potential for profit for those who understand a few key guiding principles.
First, a term policy must include a conversion rider if it is to be converted to a permanent type of insurance. Many term policies are convertible, but the riders are usually purchased at the time the policy was purchased. Insurance agents can inform their clients about the conversion potential of their policy or it can be found in the policy contract.
Another important consideration is time, because term policies only cover a limited time period, and they can only be converted before the policy lapses or the conversion rider expires. If a conversion is possible, the policyholder will still want to make sure he or she qualifies for a life settlement before pursuing the conversion.
When a term policy meets these requirements, it can be transformed from an unwanted liability to an asset that can help offset health care costs or meet other retirement needs. Those who have consulted Magna’s easy Life Settlement calculator and determined that they might be eligible for a life settlement should then investigate the conversion potential of their term insurance.
Three key reasons why a senior might pursue a life settlement for a converted term policy
Premiums are too high
Often keeping up with premium payments becomes a burden for a policyholder, especially when a term policy is bought to fill a temporary need and that need passes. A life settlement can eliminate premium payments and provide a source of income with one transaction.
The policy is about to term out.
When an individual realizes that a term policy is nearing its end, it’s a prudent time to pursue a life settlement. Every day seniors lose potential funds because they let policies lapse when they could have turned them into cash.
It is no longer needed or wanted
It is at no cost to an individual to explore the option and see if a life settlement could be worth value to help pay for continued retirement needs, health care costs or even investments.
Magna’s life settlement representatives are ready to answer questions and further explain the process to anyone who thinks that a settlement might be the right solution for their term life insurance policy. Request an appointment with us to help you request a conversion illustration from the carrier.
See the original article on LinkedIn by Clay Gibson, Senior Vice President of Origination for Magna Life Settlements.
Bankruptcy Soars Among the Elderly
Financial concerns have always been a part of the retirement landscape, but two recent studies indicate a precipitous situation for many seniors, with bankruptcy rates for the over-65 population surpassing those at any other time in history.
Some of the most significant data came from a study compiled by four professors in partnership with the Consumer Bankruptcy Project, which collected bankruptcy data from 1991 to 2016. The study’s authors went beyond the unmistakable trends from the numbers to pinpoint the sociological causes for those patterns. Among the most compelling findings of the CBP report:
• The number of people between the ages of 65 and 74 who filed for bankruptcy increased more than 200 percent in that 25-year period. As a result of that jump, the number of seniors within the U.S. bankruptcy system has increased fivefold. One in seven bankruptcy filers in 2016 was over the age of 65.
• As a result of inadequate income during retirement coupled with skyrocketing health care costs, the median senior filing for bankruptcy enters bankruptcy with negative wealth of $17,390, as compared to more than $250,000 for seniors who have not filed.
• More than 62 percent of the respondents in the CBP study identified increasing medical expenses as a “catalyst” for their bankruptcy filings.
“With few exceptions, the road to bankruptcy is long,” the report said. “Combined, more than six out of ten older debtors struggled for at least two years to repay their debts before they turned to bankruptcy for help. Struggling for several years to repay one’s debts is an unfortunate way to spend one’s retirement years.”
Other considerations that the study respondents reported as key factors in their late-in-life financial struggles were shifting Social Security eligibility and the shaky status of many pension plans. The research detected a growing gap between the haves and have-nots among the over-65 population, mirroring a similar chasm between the higher and lower income groups in the population at large.
The second significant study examining the financial challenges of seniors was conducted by the Urban Institute, and it focused on the future distribution of retirement income, as well as the minimum wage and wage inequality. The section of the study related to retirees concluded that the top fifth of U.S. earners between the ages of 67 and 75 will see a steady increase in their income in the next seven decades, whereas the bottom fifth will see a drop twice as dramatic as the increase seen by the top fifth.
“People who experience high wage inequality during their working years are likely to experience high retirement income inequality, because Social Security benefits are tied to lifetime earnings, and people’s ability to save for retirement depends on how much they earn,” stated the report’s summary.
Using solid data, these studies prove statistically what many seniors understand anecdotally—that retirement years often present difficult financial challenges even for those who prepare. Many seniors are unaware of life settlements, which can provide a valuable source of income for those who need extra help with health care or other expenses. To find out if you might qualify for a life settlement, start with Magna’s life settlement qualifier.
How to Navigate Your Expenses in Retirement
It’s something every adult understands—saving for retirement is a necessity. But beyond the nebulous idea of “putting money away for later,” how much do we really know about the actual costs incurred by American seniors? Retirement expenses are rising, making it more imperative that people over 65 and their advocates understand the details of income options like life settlements. Following are some of the primary areas where expenses are rising for seniors:
This is the category that hits many senior adults the hardest, because of the obvious surge in medical needs as people age. An article from CNN Money estimates that the average 65-year-old man will spend $189,687 on healthcare in retirement, while an average 65-year-old woman will spend $214,565. Because medical situations and their attendant costs are unpredictable, those expenses are one of the key reasons seniors need to seek alternate sources of income.
Even if healthcare costs can mount fast, housing expenses are the most consistent hits on a senior’s budget. A 2015 study from the Social Security Administration indicates that households with people over 65 spend about 35 percent of their funds on housing, more than twice the amount spent monthly on out-of-pocket healthcare, which came to 13 percent. When all of the costs associated with housing are considered—mortgage or rent payments, utilities, maintenance and furnishings—seniors spend an average of $14,034 annually, according to a breakdown in U.S. News and World Report.
Transportation and Travel
Even though some seniors see a drop in gas costs when they stop working, transportation is still the second-largest expenditure, according to the Social Security Administration study, comprising 15 percent of the average senior’s budget. Transportation costs, as well as money spent on hotels, food and other entertainment, tend to rise in the retirement years because of the extra time for travel in retirement years. To mitigate this expense, seniors should seek travel discounts just for those 65 and older, and they should also take advantage of the freedom to travel during off-peak times when working people are unavailable.
Even though those three categories are typically the ones that cause the most headaches for seniors, other expenses can also be unexpectedly high during retirement—food, education costs for family members, insurance and entertainment, to name a few. Because retirement years can be expensive and seniors want to get the most they can out of that time in life, a life settlement can turn a burdensome unwanted life insurance policy into a valuable asset. To learn more, set up a call with a Magna representative today.