Retirement decisions await Baby Boomers
July 1 is an unusually interesting date this year, and not just because it’s the beginning of a long weekend.
This July 1 is the date when the very oldest members of the baby-boom generation turn 59 1/2, the age at which they are allowed to begin making penalty-free withdrawals from their IRAs and other retirement savings accounts.
They don’t have to. Mandatory withdrawals don’t begin for another 11 years, when these folks reach 70 1/2. But they can, and that fact is being viewed with increasing apprehension by economists and investment houses alike.
And in 2 1/2 years, at age 62, they will be able to start drawing Social Security. Again, they don’t have to, but they can.
The baby boom, which added an estimated 76 million Americans to our population, began in 1946 and ran until 1964. Boomers have been yanking the nation around almost from the beginning, starting when they swamped elementary schools in the 1950s, and their impending retirement is viewed by many experts as a plunge into the unknown.
To a greater extent than their parents, boomers will be depending on their own resources to see them through their final years. The decline of traditional pensions, the problems of Social Security and Medicare, and the unprecedented levels of debt that many boomers have taken on — not to mention the wide disparity in income among members of the generation — make it far from clear what kinds of lives this giant population cohort will have in retirement.
Boomers have been a generation for whom things generally worked out despite what their critics see as an unprecedented level of self-indulgence, and maybe that scenario will repeat itself in retirement. But it would be unwise to count on it.
Rental-car rates climbing
The rental-car industry is going through a major change that in recent weeks has started contributing to some aggressive price increases.
Historically, rental companies have maintained close ties with auto makers — buying vehicles at a discount and always having a supply readily available. Now, however, car makers are starting to pull back from these relationships, in an effort to shed the “fleet-car” stigma that has tarnished some models and hurt showroom sales.
Partly as a result, rental-car rates are starting to climb as the companies face the prospect of a dwindling supply of vehicles at the same time that travel demand is rebounding. In recent weeks, Avis, Dollar, Hertz, National and others all have boosted prices 5 percent to 15 percent or more, and consumers are starting to see the effects at rental counters.
While rental prices always rise with the summer season, this time around the increases have been more pronounced. Charles Pulley of Vanguard Car Rental USA Inc.’s National Rental Car and Alamo Rent A Car brands, says its prices have increased year-over-year 10 percent in some places, and in some hotter travel markets such as New York, Florida, California and Hawaii by nearly twice that amount.
Moving a good time for estate planning
Summer is peak moving time for many families. While your priority might be unpacking boxes, don’t forget to review your estate plan.
A relocation often signals a change of wealth or life circumstance. Some people move because they’ve taken a new, lucrative job, or received a hefty inheritance. Couples typically move to a bigger house when their family expands. In some cases, a person will move following a divorce.
First off: examine the reasons why you moved. Then make sure your estate-planning documents reflect the new development. Modify beneficiaries if necessary. In general, “any change in your life really triggers some need to review all your information,” said Cathy Ward, senior vice president at Bryn Mawr Trust Wealth Management in Bryn Mawr, Pa.