If you are unable to go to your bank personally, you may need to draft a bank authorization letter to authorize someone else to help. This letter will allow you to authorize a person to do banking, on your behalf, during times of illness or other issues.
Retirement from a working lifestyle to a leisure lifestyle usually comes once in a lifetime. It’s no wonder that many people make decisions after retiring that may not be in their own best interest for the long term.
With life expectancy steadily increasing, many people could spend more than 20 years in retirement. Here are some tips to help people avoid common mistakes during their first year as a retiree.
1. Budget for increased leisure
It’s normal to feel free at the beginning of retirement and spend for vacations, expensive restaurants, entertainment and other leisure activities. It's very important in the first years after they retire for people to spend frugally in order to make the money last the rest of their lifetime.
It may be in the later years when they need it most. It’s wise to budget for leisure activities and to stick to the budget. A four percent withdrawal rate is recommended for retirees, but for people in the first or second year, a withdrawal rate of less than three percent is recommended. This will ensure that their portfolio and savings lasts longer.
2. Consider working part time
Many retirees quit working and find they have nothing to do. They may feel left out and that they no longer contribute to society. Having a part time job, is a good way to stay connected, still have lots of time off and earn money that can be spent rather than using savings.
Some job possibilities are:
• Consulting companies need extra help on projects
• Research assistant for universities or businesses
• Part-time work for local, state or federal government
• Retailers need extra help during the holiday season
• Customer service agents who work from home
• Tutors for local students in English or math
• Job possibilities online
3. Avoid depression and dissatisfaction
After retiring, many people who don’t want to spend on leisure and who don’t want a part time job may find themselves with nothing to do. This is not healthy for the mind or body and can be avoided by planning ahead.
Volunteering to help less fortunate people in a hospital, school, through a religious organization or other way gives great satisfaction and keeps the mind alert. Relaxing on a beach all day may look fine in theory, but when it comes to daily life, it is much healthier to have some activity that the retiree enjoys or that makes them feel needed.
4. Learn about the tax consequences for IRAs, pensions and investments
The Internal Revenue Service (IRS) demands that retirees withdraw certain amounts from their IRA once they reach the age of 70 ½. If this isn’t done, there are huge penalties and interest to pay the government.
Retirees should learn about this before they retire, but this isn’t always the case. In some cases, the company’s human resources department gave the wrong information. This is why it is important not to take it for granted that they know what to do, but to be sure they have the facts from the IRS.
If a retiree saved $500 per month by legally reducing their taxes, this adds up to $6,000 per year. That’s a good amount that they didn’t have before.
There are a lot of tax advantages for retirees, and knowing about them is the only way they will be able to get the benefit. Also, the rules change every year. It’s worth talking to a qualified tax specialist.
5. Boomerang children
With the high cost of living and a sizeable amount of debt, many children are returning to the family home to live. Some stay just long enough to get back on their feet, and some plan to stay indefinitely.
Parents may or may not be happy to have them back, but most want to help their children if they can. If the parents are close to retiring or are new retirees, it is not a good idea to give too much financial help to their adult children.
If the children need to spend time at home, they should pay their way. They can pay rent, help pay for food and contribute to the utility bills, cable bill and internet connection.
It may not be necessary to charge them the full amount, after all they are family, but they should pay something because the parents are going to need every cent they can get as they grow older.
By Andre Bradley
Developing a strong, thoughtful financial plan is rarely simple and easy. This requires the individual to ascertain his or her current financial position, determine what realistic future financial goals and milestones are and create a plan to get from the current position to the desired future position.
If, for any reason, a consumer makes a purchase with a personal cheque that he or she regrets, and would like to return the item, or if a personal cheque is lost or stolen, they can stop payment on the cheque. When payment is stopped, the consumer can write another cheque without worrying that the lost or stolen cheque will be cashed if it is found.
If you are unable to go to your bank personally, you may need to draft an authorization letter for bank transaction to authorize someone else to help. This letter will allow you to authorize a person to do banking, on your behalf, during times of illness or other issues. This person can make deposits, withdraw funds and make other decisions regarding the account with your written authorization. It is not hard to write this kind of letter, as it doesn’t need to be long and drawn out.
If you need cash and are wondering how you will pay for specific expenses, you may be taking a closer look at your retirement funds and wondering if you should move forward with the option to borrow this money. This is often a preferred option over simply taking the funds out of the account altogether with no intention to repay them. With a closer look at the steps it takes to borrow the funds, you may be able to make a more informed decision about whether this is an option that you want to move forward with.
Below are sample credit inquiry removal letters. It needs to be sent by certified mail to each of the three main credit bureaus. Any enclosures should be copies. No original documents should be sent.