Only one more day left this month. Remember it tomorrow.
There are four significant days/events in May. I’ve mentioned Mother’s Day in a previous column, so I would like to say a few words about the other three. A Month and two Days.
In 1963, President Kennedy established May as Older Americans Month. At that time there were 17 million Americans over the age of 65. They could consider 65 to be old back then because the average life expectancy for a male was 69 and for a woman, 73.
Even after the pandemic is factored in, the averages today are about ten years greater for both men and women. With 10,000 baby boomers reaching 65 every day, we’re closing in on 50 million people that can be called Older Americans, at least by the late president’s definition.
As more and more people reach this milestone, our landscape is changing, with new housing developments geared toward the needs of our aging population.
Social Security and Medicare are the two government programs designed specifically for them. And both are under financial stress because such a large segment of our population is now over 65.
In1963, the average Social Security payment was $93 per month. That’s the equivalent of $805 in today’s dollars. The current average benefit is about $1,500.
In the financial services industry, there are many new regulations to help protect vulnerable seniors from unscrupulous people trying to take advantage of them by stealing money from their pocketbooks and nest eggs. Granted, many in this age group are living vibrant lifestyles in retirement communities, but others are dependent on caregivers to help them through their daily lives.
You’re probably aware of 529 College Savings Plans, but did you know that May 29 was College Savings Day? There are a multitude of college savings programs, but the two most popular are prepaid tuition programs and investment programs.
The obvious advantage of prepaid programs is locking in tuition prices before they increase. Yes, they’re going to. With the 529 investment programs you can choose funds you from a broad menu. The money grows tax-free and can be withdrawn tax free if used properly for education. As with any investment, due diligence is necessary before committing your money.
The cost of higher education has been increasing at an alarming rate. Far too many students are drowning in loan debt. In fact, there are also many retirees who cosigned for their children’s loans and are now paying for student loan debt in retirement.
And then there’s the one date that’s on everyone’s calendar and nearly impossible to overlook. Memorial Day. There are no words that can articulate how thankful we all should be for those that gave their lives to defend our great nation.
Our wonderful lifestyle didn’t just evolve over time. It was bought and paid for by those that served in the military. After watching the evening news, I often think we may be overlooking the big picture. Individually and as a nation I fear we may be getting bogged down on petty issues.
It costs a pretty penny to pay for a retirement that could last one-third of your life. Even with 529 Programs, college tuition is increasingly costly. But the most expensive thing of all is the cost of our freedom. Let’s all reflect on that tomorrow.
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Do you know someone who would like to meet with a financial advisor?
Ken Morris 248.952.1744
E-mail your questions to kenmorris@lifetimeplanning.com
Ken is a registered representative of LPL Financial. Securities and financial planning offered through LPL, a Registered Investment Advisor, member FINRA/SIPC. Ken is Vice-President of the Society for Lifetime Planning in Troy. All opinions expressed are those of Ken Morris. LPL and Society for Lifetime Planning are independent companies. Investing involves risk including loss of principal. No strategy assures success or protects against loss.
