Shingles gave me one of the worst Christmases ever!

shingles
webmd.com

Last year, on or about December 22nd, I was diagnosed with shingles, also called herpes zoster, within 48 hours of noticing a red, itchy rash and small fluid-filled blisters on my inner thigh.  I did not experience a lot of pain but my doctor prescribed acyclovir and triamcinolone acetonide cream for the blisters.  If that wasn’t bad enough, the doctor told me I could not attend Christmas services at my church because I may be seated near someone who was pregnant or was on a cancer drug.  Nor could I be around my grandchildren for about 10 days as the two youngest had not yet received their chicken pox vaccinations.  I was devastated and basically quarantined which caused me to have one of the worst Christmases ever.

I took down the Christmas tree and the most of the decorations which I had joyfully put up before the shingles.  It made me even more depressed to look at them. One of my neighbors graciously invited me to join her at her daughter’s house for Christmas, but I just wasn’t up to it.  It would be over two weeks before I celebrated Christmas at my home with my family.  They were fearful of contracting or passing on the zoster virus.

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Inflation protection

inflation protection
fidelity.com

Is inflation a risk to your retirement?

It is important to understand the risk that inflation may pose to your retirement income.

Fidelity Viewpoints, December 14, 2016

“For much of the last decade, inflation has been low by historical standards. But, recently, wage growth and higher prices have sent signs that inflation may be making a comeback, serving as a reminder of the risks that come when the buying power of a dollar falls. Such risks always exist, even when they don’t seem so obvious.

If you are a retiree or are planning your retirement, the effects of inflation can be pernicious. Inflation can eat away at spending power. That isn’t necessarily a problem. Some retirees actually see their spending decline as they get older. Still, retirees should at least be aware of the risks posed by inflation. When you are a retiree, you can no longer seek out higher wages to offset higher prices. You have to rely on the inflation protection of your pensions, Social Security, annuities, investments, or other income sources. Consider strategies to maximize these inflation-protection features; otherwise your ability to maintain your lifestyle may decline over time.

Some research suggests that people don’t understand the inflation protection provided by common retirement income sources. A survey from the Financial Literacy Center found that more than 40% of people did not understand how Social Security payments react to inflation—never mind pensions, annuities, or investments.”

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Interest rate hikes affect bonds and other markets

What the Fed’s move may mean

The Fed raised rates, and expects the pace of hikes to pick up in 2017. What could it mean for bonds?

Fidelity Viewpoints, December 14, 2016

“For the second time in roughly a decade and the first time in a year, the Federal Reserve has voted to raise interest rates. Treasury bonds, which had already seen sharp losses since the election in November, saw yields climb in trading after the announcement.

While the rate change at the December meeting was widely anticipated by the market, the future path of rates, and what it may mean for bonds and other markets is less certain. Viewpoints caught up with Fidelity Government Income Fund Manager Bill Irving, to get his take on the December meeting, the path forward for the Fed, and what it may mean for investors.”  Read more

I think it is premature to call the end of the three-decade bull market for bonds.

interest rate
fidelity.com

Enjoy life to the fullest

“After C.S. Lewis became a Christian, he wrote about his experience in a book fittingly entitled Surprised by Joy.  He once said, ‘Joy is the serious business of heaven.’  The Bible reminds us that Jesus ‘for the joy that was set before him endured the cross’ (Hebrews 12:2).

For the fullest possible happiness, give yourself completely to this Master of Joy.  Trust your whole life to Him.  Read His words, follow His ways, talk to Him, and He will irradiate your personality with “joy unspeakable and full of glory” (1 Peter 1:8).

enjoy life
liveaflourishinglife.com

To enjoy life to the fullest:

  1.  Live for a great purpose.
  2.  Read the passages of joy in the Bible.
  3.  Practice victorious tranquility.
  4.  Avoid the things that destroy happiness.
  5.  Bring happiness to others; it will rub off on you.
  6.  Accept God’s gift of joy and demonstrate it in your life.
  7.  Try the seven-day mental diet, refusing to say anything negative  for one week.
  8.  Walk with the Lord of joy and live in His Spirit.”

Peale, Norman Vincent and Donald T. Kauffman.  Bible Power for Successful Living: Helping You Solve Everyday Problems, Peale Center for Christian Living, 1993.

Retirement tax planning

retirement tax planning
money.usnews.com

Retirees’ Tax Puzzle:  Pay Now or Later?

by Kim Blanton

Squared Away Blog, Center for Retirement Research at Boston College

December 1, 2016

“The majority of retirees pay no federal taxes. But taxes should be a concern for retirees who have retirement savings. That’s because the money they take out of their retirement accounts for living expenses will be treated as federal taxable income. It’s difficult enough to figure out how much money to withdraw – and when. Taxes are a separate but related issue.  

In this blog, we interviewed Michael Kitces, a well-known financial adviser and partner with a Maryland financial firm, who writes the ‘Nerd’s Eye View blog. He discusses the basics of navigating the tax code. The challenge facing retirees is to make tax decisions today that will minimize taxes now and in the future.

Question: Do you find that new retirees are surprised by their retirement tax situation?  

Kitces: It’s usually not even on their radar screen. Pre-tax and post-tax income, different tax buckets – I don’t think most people even think about it once they’re in retirement. That’s why we’re still seeing people who are ‘surprised’ when they turn 70½ and the required minimum distributions (RMDs) begin, and their tax bill gets a whole lot higher. They say, ‘Why didn’t we plan for this?’ We say, ‘We’ve been recommending you plan for this for years!’

The reality is that while we’re working, we don’t think about taxes a lot – the first time you get your paycheck, you notice the difference between what your boss said you were going to get paid and what you take home. You get over that and then work for 40 years, and you just get used to your after-tax cash flow and lifestyle. But when you get into retirement, you have to think about whether accounts are pretax (traditional 401(k)s and IRAs) or after tax (regular bank accounts) or tax free (Roths), and how to draw them down. There’s nothing natural about it.”

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Retirement spending – you can’t take it with you

retirement spending
physicianfamily.com

Retirees:  It’s Okay to Spend

by Jane Bennett Clark for Kiplinger’s Personal Finance

November, 2016

“My mom enjoys a comfortable retirement, but she isn’t rich. A few years after my dad died, she sold her house. She used part of the profit to pay the big entry fee for the retirement community where she now lives, and she invested the rest. That amount, with her IRA, represents her retirement nest egg. Now, 12 years later, her stash is about the same as it was when she moved into her new home. But at age 91, she’s still cautious about spending down her retirement savings.

Her restraint isn’t unusual. A recent report by Chris Browning, Tao Guo and Yuanshan Cheng at Texas Tech University showed that most retirees of moderate means, as well as those who are affluent, don’t even spend all of their income from Social Security, pensions and investment earnings, much less draw down the principal in their nest egg. Their assets either stay about the same or grow over their lifetime. The wealthier the retiree, the bigger the gap between income and spending, and the more the savings pile up.

Even when retirees do tap their retirement savings­—as they’re required to do from tax-deferred accounts starting at age 70½—they don’t necessarily spend what they withdraw. A recent Vanguard study of retirees with at least $100,000 in household wealth showed that most of them took their required minimum distributions and reinvested one-third of their withdrawals.

Why do retirees resist spending their hard-earned (and hard-saved) money? Wanting to leave something to the kids is one reason (thanks, Mom!). But the bigger one is uncertainty. You can’t predict how long you’ll live, how your investments will perform over 20 or 30 years, or whether you’ll be hit by big medical or long-term-care costs, so you keep a cushion. In fact, that approach makes sense if you’re relying largely on savings to cover costs.

Failure to plan and lack of confidence also play roles in underspending.”  Read more

Don’t let holiday depression creep into this joyous season

During the Christmas holiday season last year I was afflicted with shingles and suffered depression due to the quarantine my doctor ordered.  It was the worst Christmas ever!  I was not able to attend church services on Christmas Eve nor see my family until January.  I was feeling hurt and alone.  I recovered but the depression due to the isolation was unbearable at the time.

Read further for helpful information if you, or someone you know, is suffering from holiday blues during this season and remember, “This too shall pass.”

holiday depression
homehelpers

Holiday Depression

by Michael Kerr

March 21, 2016

“Holidays are supposed to be a time of joy and celebration, but for some people they are anything but.

Depression may occur at any time of the year, but the stress and anxiety during the months of November and December may cause even those who are usually content to experience loneliness and a lack of fulfillment.

Why is depression so common during the holidays?

There are several reasons why you may develop depression during the holidays:

Social Isolation

Social isolation is one of the biggest predictors of depression, especially during the holidays.

Some people may have a small social circle or a lack opportunities for socialization. People who have feelings of disconnectedness often avoid social interactions at holiday time. Unfortunately, withdrawing often makes the feelings of loneliness and symptoms of depression worse.

These individuals may see other people spending time with friends and family, and ask themselves, ‘Why can’t that be me?’ or ‘Why is everyone else so much happier than I am?’

One of the best ways to deal with social isolation is to reach out to friends or family for support. You can also try talking to a therapist. They can help you figure out where your feelings come from and develop solutions to overcome them.

holiday depression
psychdigest.com

Grieving During the Holidays

Some people may be keenly aware of the loss of a loved one during the holiday season. Here are several ways to stave off the holiday blues that may descend at this time:

Begin a new tradition – Try planning a family outing or vacation, instead of spending the holidays at home.”

Read more ways to stave off the holiday blues and/or click here for Another good resource for helping an elderly neighbor or family member during the holidays.

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