Baby Boomers Embrace Technology

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Unlike previous generations, Baby Boomers have embraced technology during retirement. We love our smartphones, tablets, laptops and video chats with family. More of us have also embraced smart watches and other “wearables.”

Afraid you might be missing something? I suggest these quick reads to understand the possibilities:

Technology offers a multitude of benefits for retired Baby Boomers, including more freedom and peace of mind. We urge all Boomers to remain abreast of developments. Often, new technologies save time and make life more enjoyable. And tapping into these benefits is usually inexpensive.

 

The ABC’s of Low-Cost Car Leasing for Retired Baby Boomers

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My wife’s old clunker is biting the dust, and we decided to lease a car for her to run around town. We could just become a one-car family, but that would interfere with our independent lifestyles. Our goal is to find a new car with a low-cost lease. So, we have begun looking for a low-cost car lease for someone who only drives 100-200 miles monthly. It has been a journey of learning, my friends.

What Goes into a Lease?

To set expectations, it’s helpful to understand how car leases work. As U.S. News explains:

When you purchase a car, it’s all yours once any auto loan is paid off. Leasing, however, is different. You never have an ownership interest in the vehicle. You just pay for the depreciation that occurs while you have the car, plus interest (called the “money factor” in leasing) and fees. The lease will be broken down into an amount due at signing and a number of equal monthly payments.

You can think of leasing as renting the vehicle for however long the lease contract is. When the contract is up, you simply take the leased car back to the dealership and pay any lease-end, excess mileage, and excessive wear charges. There’s no need to haggle over the value of a trade-in, as you would if you were trading in a car that you own.

As U.S. News further notes, car leasing has an entirely different vocabulary than car buying, and you’ll want to understand some key terms so you can get the best lease terms.

  • The vehicle price that a lease is based on is called its capitalized cost, or cap cost. It’s a negotiated price, and not necessarily the vehicle’s MSRP (sticker price). Any reduction in that amount, such as a down payment, discount, or trade-in, is called a cap cost reduction.
  • A vehicle’s value at the end of a lease is called its residual value. It is set in the lease terms and is non-negotiable. Experts such as ALG determine the residual value by estimating how much a vehicle will depreciate and its worth at the end of the lease period. If you’re not considering purchasing the car at lease end, you want the residual to be as high as possible. A vehicle that has a high rate of depreciation will have a low residual value and will cost more to lease.
  • The amount you are responsible for is the difference between the cap cost and the residual value, plus fees and taxes. In general, you want the lowest capitalized cost that you can negotiate and a vehicle with the highest residual value possible.
  • The interest rate that figures into each month’s payment is called the money factor in leasing. In some cases it can be negotiated, and it may reflect your creditworthiness. If you are comparing different leases, you’ll want to figure the money factor into your decision.
  • Most leases will have a disposition fee that you have to pay at lease end. It covers administrative costs and the cost of refurbishing the vehicle and putting it up for resale. Many leases will require you to make a security deposit at lease signing. If you return the car without excess wear-and-tear or mileage, you can get some or all of the security deposit back.
  • If you decide to end your car lease before the contract is up, you will have to pay an early termination fee. They can be very expensive, and lessees should try to avoid incurring them at all costs.

And there’s a tricky issue called “gap insurance.” This covers the gap between what a car is worth and what you owe at the time of a loss in case the car gets stolen or totaled in an accident. Do you need it? Depends. Check out this article on the subject. Generally speaking, gap insurance is a good thing to buy for peace of mind.

Don’t lease a car for too long. Generally, new cars become with a three-year warranty. If you lease it for five years, consider getting an extended warranty to cover unexpected repairs.

Also, many dealerships will try to sell you a “maintenance package” that offers lower-priced car servicing at their facilities. The cost is factored into the monthly payments. Be advised that you are not required to purchase this.

Plus, let’s not forget the charge per mile over your annual allotment, another way dealers reap more money. Annual allotments used to be 15,000 miles or more. Now, most dealers have reduced that to 10,000-12,000 miles per year. Thereafter, they add $.15-$.30 per mile, due at the end of the lease. If the car is used for just errands around town, this probably won’t hurt. But if you plan on taking road trips, watch out!

Calculate the True Monthly Payment for a Lease

With a down payment or trade-in, you may arrange a lease with low monthly payments. However, the true monthly rate is much higher. For example, if a two-year lease requires $2400 down and has a monthly payment of $140, your true monthly lease cost is $240.

Excluding luxury cars, most leases appear to fall into the $150-$300 monthly range after a down payment or trade-in.

Where to Look for a Low-Cost Lease

There are lots of lease packages out there, but how does one find a low-cost lease? Most articles on this subject agree that watching for dealer specials rather than manufacturer deals is the best strategy. Dealers have inventory they have to move, often quickly. They periodically offer attractive terms that might fit your needs. Just scrutinize the terms!

Can You Get a Car Lease with $0 Down?

With excellent credit, yes. A general rule of thumb is that lease like this will have a monthly payment of one percent of the MSRP. So, if a new car has a list price of $24,000, the best monthly lease cost you could probably expect is $240. A trade-in or down payment could reduce that monthly figure by a $100 or so.

Suggested Reading

How to Find a Car Lease with a Low Monthly Payment

A Google search reveals that the cheapest car leases in November, 2018 are (obviously) for compact vehicles:

  • 2018 Chevrolet Cruze: $159 per month for 24 months.
  • 2018 Toyota RAV4: $179 per month for 36 months.
  • 2018 Kia Forte: $139 per month for 24 months.
  • 2018 Honda Civic: $169 per month for 36 months.
  • 2018 Volkswagen Tiguan: $199 per month for 36 months.
  • 2018 Nissan Rogue Sport: $149 per month for 36 months.

Most require a down payment of $2,000-$3,000, so be sure to compute the true monthly cost if this is important to you. Here are some websites to assist in finding a car lease with low monthly payments:

Be advised that all these sites require you to provide contact information and expect to receive calls and emails from local car dealers.

The Bottom Line for Baby Boomers

It is very hard, if not impossible in the U.S., to find a car lease with monthly payments under $100 UNLESS you are also prepared to submit a large upfront down payment. However, there are good deals in the $100-$200 monthly range with down payments (or trade-ins) of $2,000 to $3,000.

If you are okay with driving a used car, more attractive lease bargains are available. Also, look at buying a depreciated used car rather than leasing a new one – the math might be better!

Our advice: Understand how car leases work before you go shopping!  Set your expectations and stay abreast of local dealers who periodically advertise some good deals. Attempt to keep your true monthly lease cost as low a possible. Don’t lease a car for longer than three years. Try one of the above websites to get dealers competing for your business. And be careful of those extra mileage charges!

A final consideration is to realize that just having a car is expensive. On top of down payments and lease payments, expect monthly insurance costs to run at least $100. And then there’s maintenance, gas, annual fees, etc. It adds up. Ask yourself, “Do I really need a car?” If you can get by with Dial-a-Ride, the bus, a taxi or Uber, maybe leasing a car is not the best decision.

Baby Boomers Biggest Worry? Alzheimer’s!

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Why did I come into this room. Where did I leave my keys? What is my locker combination? I bet if you ask any person over 65 what their secret concern is, they would said “Alzheimer’s!”  Losing our memories is the the most terrible thing most of us can envision, more so than going blind, getting cancer, suffering from ED, or even having a heart attack. When we get older, our memories, our families, and our friends are so important to us.

No One is Safe from Alzheimer’s

According to the Alheimer’s Association: “Alzheimer’s is the most common cause of dementia, a general term for memory loss and other cognitive abilities serious enough to interfere with daily life. Alzheimer’s disease accounts for 60 percent to 80 percent of dementia cases. It is a progressive disease, where dementia symptoms gradually worsen over a number of years. In its early stages, memory loss is mild, but with late-stage Alzheimer’s, individuals lose the ability to carry on a conversation and respond to their environment. Alzheimer’s is the sixth leading cause of death in the United States. [It] has no current cure, but treatments for symptoms are available and research continues.”

In a recent article, Newsmax states: “Some warning signs you should never ignore: If you notice that memory problems are affecting your daily life, or that of a loved one, or perhaps finding ordinary conversation an increasingly difficult struggle you may be experiencing some of the signs and symptoms of Alzheimer’s disease. More than 5 million Americans have this dreaded disease and according to Harvard Health Report, estimates suggest this number will affect 13.8 million Americans by the year 2050.

If you are diagnosed with Alzheimer’s, realize that it is a progressive disease and you could live for twenty years or longer with the disease. There are drugs to slow it’s progression.  Most people, however, are concerned how Alzheimer’s would affect their daily lives. WebMD provides some suggestions: “As it gets harder to remember things, you can use a few strategies to help your memory. You may have to try a few different ones before you find what works for you. To start:

  • Keep a notebook or smartphone with you to keep track of important information, phone numbers, names, ideas you have, appointments, your address, and directions to your home.
  • Put sticky notes around the house with reminders for yourself.
  • Label cupboards and drawers with words or pictures that describe their contents.
  • Ask a friend or family member to call and remind you of important things you need to do during the day, like taking medication and going to appointments.
  • Keep photos of people you see often, and label the photos with their names.

What’s the Best Way to Plan the Day?

  • Focus on things you enjoy and are able to do safely on your own.
  • Take advantage of the times of the day when you feel best. It will be easier to get things done.
  • Allow yourself the time to do what you need to do. Don’t feel like you have to hurry or let other people rush you.
  • If something gets too hard, take a break.
  • Ask for help if you need it.

Protect your Family – Develop a Financial Strategy!

Alzheimer’s can financially devastate Boomers. Assisted living homes for Alzheimer’s victims typically run $4,00-to-$7,000 monthly! But there is some help available through Medicare (up to 100 days in an assisted living facility). To overcome the limitations of Federal programs, each state typically offers help to Alzheimer’s sufferers and their families. This may include low-cost home care, adult day centers or even nursing home assistance.

The Alzheimer’s Association® can connect you with low-cost or free community support services. Call their 24/7 helpline at 800.272.3900 (TTY: 866.403.3073). Their “Benefits Check-Up” helps you find programs that can help to pay for medications, health care, food, utilities and more:

The Bottom Line for Baby Boomers

The main thing for Baby Boomers to remember (no pun intended) is that some memory loss as we age is natural. So, don’t panic when you can’ remember where you put the car keys. But if you or your spouse has concerns, talk to your doctor to find out what’s going on. And realize that you have time to gather information to make informed decisions. Alzheimer’s take years to become crippling. Moreover, there are a lot of financial aids and free services out there to assist Boomer families, so get help!

Considerable research is being invested in finding a cure or slowing the progression of Alzheimer’s, but it is proving to be a tough nut to crack. Nonetheless, since about 50 million people worldwide suffer from Alzheimer’s, it will continue to receive strong attention. There is hope, my friends.

Boomers – What will You do if the Economy Goes Belly Up?

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If you are a Baby Boomer, you have to be worried about the economy. With trade wars, rising national debt and interest rate increases, it could take a nose dive within the next twelve months. Are you prepared for this? Have you taken steps to survive what could be a dramatic economic downturn?

I am not an economic advisor, but as someone who (like many of you) suffered devastating losses in the 2008 Great Recession, here are some commonsense steps to think about:

  • Protect your Savings. Make sure your 401K, stocks, mutual funds, etc., are diversified. Move funds to less risky alternatives, like T-Blls and municipal bonds. Consider getting out of the stock market.
  • Real Estate Equity will Evaporate! Those of us who suddenly found ourselves upside down on home equity in 2008 know all too well how quickly real estate values can fall when interest rates climb, stocks crash and people lose jobs. So, if you are thinking about selling your home, vacation home or investment property, or getting a reverse mortgage,  DO IT NOW!
  • Prepare a Fall-Back Budget. Most Boomers don’t have a large reserve fund. We suggest having a fall-back plan to trim monthly expenses. Ask yourself, “How can we survive if inflation soars or our monthly income decreases by 30 percent?” What can you do without? What can be trimmed and how quickly?

Some of you may feel this warning is unwarranted or premature. Frankly, I hope you are right. But those of us who have been there before, along with more and more leading economists, sense a coming reckoning.

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