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Challenges in the Health Care System

The older we get, the more likely we are to need medical care, which is why health insurance premiums are higher for mature adults.1 Unfortunately, most doctors are given the least medical training in caring for older adults.2

Medical schools focus a fraction of their curriculum on older adults, though older adults represent a higher percentage of patients in hospitals and outpatient clinics. Many health care professionals lack specific training in the anatomy, physiology, pharmacology and special conditions specific to older adults, says Dr. Louise Aronson, a geriatrician and author of the book “Elderhood.” This is a critical area of medicine because older bodies can be more susceptible to harm caused by certain medications or hospitalization, for example.3

 

Dr. Aronson notes that this level of attention is starting to change. Many surgeons now consider the most effective ways to prepare older adults for pre- and post-surgical care, and anesthesiologists are looking more closely at the effects of anesthesia on older adults, for example.4

 

Unfortunately, the cost of medical services remains a challenge for all demographics. While Medicare pays for a large portion of medical care, retirees can be burdened with significant medical bills that can impact their long-term standard of living. A recent survey by the Kaiser Family Foundation and The New York Times found that more than half of people who struggle to pay medical bills must change their lifestyle in some way, such as cutting household spending, depleting savings or seeking an additional income source.5 Another consequence is that, according to the Consumer Financial Protection Bureau, about 43 million Americans have overdue medical bills on their credit reports.6

 

Fortunately, there are some insurance products that offer the flexibility to use assets for a variety of needs. For example, there are life insurance and annuity products that offer benefits to assist with the costs of long-term care — should you ever need it — with benefits you won’t lose even if you don’t. Please call us to learn more.

 

One way to reduce medical bills is to curb unnecessary medical services. For example, one recent analysis of claims from 2 million Medicaid and commercially insured patients by the Washington Health Alliance found that, in the state of Washington, $341 million was spent on 48 measures of unnecessary health care over one year. While the vast majority (92 percent) of these services were low-cost, it goes to show that the cost of minor services adds up fast over a large population. The top three examples of wasteful, or low value, services found in this study were prescription opioid medications for lower back pain in the first four weeks, antibiotics for upper respiratory and ear infections, and annual EKGs or cardiac screenings for low-risk patients.7

 

Content prepared by Kara Stefan Communications.

1 Healthcare.gov. “How insurance companies set health premiums.” https://www.healthcare.gov/how-plans-set-your-premiums/. Accessed June 3, 2019.

2 Judith Graham. Kaiser Health News. May 30, 2019. “A Doctor Speaks Out About Ageism In Medicine.” https://khn.org/news/navigating-aging-a-doctor-speaks-out-about-ageism-in-medicine/. Accessed June 3, 2019.

3 Ibid.

4 Ibid.

5 Roxie Hammill. Kaiser Health News. June 3, 2019. “Churches Wipe Out Millions In Medical Debt For Others.” https://khn.org/news/churches-wipe-out-millions-in-medical-debt-for-others/. Accessed June 3, 2019.

6 Michelle Andrews. Kaiser Health News. May 31, 2019. “Mired In Medical Debt? Federal Plan Would Update Overdue-Bill Collection Methods.” https://khn.org/news/mired-in-medical-debt-federal-plan-would-update-overdue-bill-collection-methods/. Accessed June 3, 2019.

7 Shelby Livingston. Modern Healthcare. June 1, 2019. “Calculating the cost of waste.” https://www.modernhealthcare.com/providers/calculating-cost-waste. Accessed June 3, 2019.

Guarantees and protections provided by insurance products including annuities are backed by the financial strength and claims-paying ability of the issuing insurer.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Social Security Benefits: Spouses, Ex-spouses and Surviving Spouses

As you begin the retirement planning process, it’s important to have a strategic income plan with regard to Social Security benefits. It is particularly important for married couples to consider not only when the primary breadwinner should begin drawing benefits but also how that start date could affect a spouse whose benefit is derived from that income history. 1

There are two requirements for drawing benefits based on a spouse’s earning record: 2

 

The primary earner must be at least age 62 and already drawing Social Security.

2.    The spouse may not begin benefits until age 62.

If the primary earner starts taking benefits before full retirement age, both their benefit amount and the spousal benefit amount will be permanently reduced. This means the total amount of benefits that the couple receives throughout their lifetime may be less than if the primary breadwinner waited until full retirement age. Note that if the spouse also has a work record, he or she will automatically receive the higher benefit based on earnings history or the qualified amount under the spouse’s benefit.3

 

A lot of people think they’ll simply start drawing Social Security when they retire. However, there are various strategies to consider, including living off savings for the first few years of retirement to allow your Social Security benefit to continue to accrue. If you’d like help figuring out how to develop and coordinate multiple retirement income streams with your Social Security strategy, we’re here to help.

 

Things become more complicated when spouses are divorced. An ex-spouse can receive benefits based on your earnings record, even if you have remarried. The number of ex-spouses you might have in this situation doesn’t matter; their benefits won’t affect yours or your current spouse’s — there is not a fixed amount that will run out. However, a divorced spouse must meet the following criteria to receive benefits based on your record:4

 

Your marriage must have lasted 10 years or longer.

·      The ex-spouse must remain unmarried.

·      The ex-spouse must be age 62 or older.

·      The benefit to which your ex-spouse is entitled must be higher than that based on his or her own work history.

An ex-spouse attempting to claim benefits based on an ex-spouse’s earnings record is no longer eligible for that benefit if she remarries. If she remarries after already receiving benefits, those payouts will terminate.5

 

However, if her subsequent marriage ends — through death, divorce or annulment — she can resume her prior Social Security benefits based on her first spouse’s record. She can even apply for the first spouse’s benefit if he hasn’t retired yet, as long as he qualifies for them. The only caveat is that the couple must have been divorced for at least two years.6

If a married couple has begun receiving benefits and the primary income earner dies, the spouse may begin receiving the deceased spouse’s benefit amount (assuming it is higher) in place of his or her own.7

 

Content prepared by Kara Stefan Communications. 

1 Women’s Institute for a Secure Retirement. “Social Security Spousal Benefits.” http://www.wiserwomen.org/index.php?id=686. Accessed May 27, 2019.

2 Ibid.

3 Ibid.

4 Social Security Administration. “Retirement Benefits Your Divorced Spouse.” https://www.ssa.gov/planners/retire/yourdivspouse.html. Accessed May 27, 2019.

5 Dana Anspach. The Balance. Jan. 15, 2019. “Social Security Benefits for an Ex-Spouse.” https://www.thebalance.com/social-security-ex-spouse-2388947. Accessed May 27, 2019.

6 Social Security Administration. “If You Are Divorced.” https://www.ssa.gov/planners/retire/divspouse.html. Accessed May 27, 2019.

7 Jim Borland. Social Security Administration. Jan. 24, 2019. “Understanding Spouse’s Benefits.” https://blog.ssa.gov/understanding-spouses-benefits/. Accessed May 27, 2019.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

Our firm is not endorsed by or affiliated with the U.S. government or any governmental agency.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Assessing your Mortgage Situation in Retirement

When it comes to retirement preparation, a common benchmark goal is having one’s mortgage paid off. This typically removes a large, ongoing payment from the budget and can reduce retirement expenses substantially. Some people even schedule their retirement just after their final payment date.  

Here’s an even better idea: Schedule your retirement date six months to a year after your last mortgage payment, but continue to save an amount equal to that mortgage payment each month to help accumulate an emergency fund before you retire. While your house may be a key asset, it’s not exactly liquid, making it difficult to access that equity should you need money during an economic downturn or for a personal emergency. If you’d like to discuss other ideas about preparing for retirement, please contact us.

 

The reality is many Americans are still carrying a mortgage when they enter retirement. More than 35% of heads of household age 65 to 74 still carry a mortgage, and 23% of homeowners older than 75 are still paying down a mortgage.1

 

One way retirees try to offset mortgage expense is by using some of their saved assets. Be careful — large withdrawals from certain accounts could throw you into a higher tax bracket for the year. Also, reducing savings could have a significant impact on your ability to generate household income in the long-term. The last thing you want is to run out of money during the latter years of retirement.

 

Some may consider refinancing their existing mortgage — if interest rates are lower than their current rate — for the lower interest rate and a lower monthly payment during retirement. While this can help, it may mean that you have to keep paying your mortgage longer than your current mortgage schedule. Consider refinancing with a shorter-term loan, such as 10 or 15 years. You may have to pay a higher monthly amount, but it will be over a shorter timeframe. 2 For example, a shorter-term mortgage may be ideal for someone buying a new home or downsizing while in their 50s.

 

Another option is doubling up your regular mortgage payment or applying an additional payment amount to your principal each month. If you can afford to do this while working, this strategy can shave thousands of dollars in interest. Not only does this enable you to save more money over time , but paying more toward your mortgage can help you build home equity faster.

 

You may decide at some point during retirement that you’d like to sell your current home and buy another. Many retirees believe they won’t qualify for a mortgage once they are no longer earning a paycheck. However, lenders have several methods they can use to calculate income for a retiree who is drawing from assets, a pension and/or Social Security to verify regular income.3 Lenders can “gross up” income on which taxes are not paid by as much as 25 percent when calculating qualifying income.4

 

Whether you are already retired or making your retirement plans, it’s important to consider your home not just as an expense, but also as an asset.

 

Content prepared by Kara Stefan Communications.

 

1 Liz Weston. USA Today. Oct. 30, 2018. “Why you should pay off your mortgage before you retire and what to do if you can’t.” https://www.usatoday.com/story/money/personalfinance/retirement/2018/10/30/should-you-pay-off-mortgage-before-retirement-planning/38242907/. Accessed May 20, 2019.

ibid.

2 Robert McKinley. CardTrak.com. May 13, 2019. “Mortgages and Retirement Are Not Peas and Carrots.” https://cardtrak.com/2019/05/13/retirement/mortgages-and-retirement-are-not-peas-and-carrots/. Accessed May 20, 2019.

3 Dana Anspach. The Balance. April 24, 2019. “How to Get a Mortgage Once You Are Retired.” https://www.thebalance.com/how-to-get-a-mortgage-once-you-are-retired-2388738. Accessed May 20, 2019.

4 Amy Fontinelle. Mass Mutual. Jan. 22, 2019. “How to get a mortgage during retirement.” https://blog.massmutual.com/post/how-to-get-a-mortgage-during-retirement. Accessed May 20, 2019.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Don’t let presumed costs deter your insurance decisions

The No. 1 reason to purchase an insurance policy is to cover expenses that would otherwise create a financial hardship for you or your family. Many policies are often employer-sponsored, but if you don’t have access to affordable options or would like to review potential financial vulnerabilities that could be covered by insurance, please give us a call.

The following are examples of insurance situations sometimes neglected due to the presumed high cost of premiums or lack of convenient access.

 

About four in 10 (41 percent) of working Americans receive disability insurance coverage, usually paid for on a limited basis by their employer. However, less than a quarter (24 percent) opt to purchase additional voluntary disability insurance through their employer. First, it’s important to consider how much you might need to supplement the employer-sponsored benefit should you ever become disabled. Second, it appears the grass is always greener elsewhere when you don’t have a lawn — nearly half (47 percent) of workers say their employer doesn’t offer voluntary supplemental coverage, but more than half (58 percent) say they’d buy it if offered.1

 

Next, consider life insurance. It often seems like the people who need it most believe they can’t afford it. For example, about half of single parents with children younger than 18 don’t have any life insurance. Among those with three or more children under 18, 70 percent have no coverage. The majority say it’s because they believe it’s too expensive.2

 

Interestingly, single parents who can afford life insurance tend to go with a more expensive permanent policy. The majority (77 percent) of single parents with a policy purchased permanent coverage, although this could be because they are addressing additional needs beyond the death benefit, such as supplemental retirement income or leaving an inheritance. 3

It’s worth noting that life insurance could make a prudent gift from the parents of a single parent. After all, if something happens to the adult child, those insurance proceeds can help the grandparents care for their grandchildren.

 

When making travel plans, travel insurance is a popular trend these days. It’s not a bad idea given the problems some airports have had in recent years due to power outages, computer glitches and weather incidents. For example, more than 4,800 flights were delayed and 840 flights canceled during Easter weekend this year due to severe weather.4

 

There are a wide variety of travel insurance options, including coverage for canceled flights, medical expenses and evacuation expenses. Fortunately, travel insurance can be relatively affordable compared to the cost of a vacation; many plans start at just 4 percent of the trip cost.5

 

Speaking of extreme weather, make sure you’re covered for this year’s wildfire season on the West Coast 6,hurricane season for East Coast residents, and tornadoes and flooding for those in the middle of the country. Review your insurance needs well in advance, as some policies (like flood insurance) have a 30-day waiting period.7

 

Content prepared by Kara Stefan Communications.

 

1 Insurance News Net. May 1, 2019. “Survey: Just 4 In 10 Employees Protecting Income With Disability Coverage.” https://insurancenewsnet.com/oarticle/survey-just-4-in-10-employees-protecting-their-paychecks#/. Accessed May 6, 2019.

2 Susan Rupe. Insurance News Net. April 8, 2019. “They Aren’t Buying It: Single Parents And Life Insurance.” https://insurancenewsnet.com/innarticle/they-arent-buying-it-single-parents-and-life-insurance#/. Accessed May 6, 2019.

3 Ibid.

4 David Oliver. USA Today. April 18, 2019. “4,800+ flights delayed, 840+ canceled ahead of busy Easter, Passover travel weekend.” https://www.usatoday.com/story/travel/flights/2019/04/18/easter-passover-travel-flight-cancellations-delays-united-states/3505544002/. Accessed May 6, 2019.

5 Insurance News Net. May 2, 2019. “The Best Travel Insurance For Summer Travel.” https://insurancenewsnet.com/oarticle/the-best-travel-insurance-for-summer-travel#/. Accessed May 6, 2019.

6 Nicholas K. Geranios. Insurance Journal. May 3, 2019. “Busy Wildfire Season Along West Coast: Forecast.” https://www.insurancejournal.com/news/west/2019/05/03/525477.htm. Accessed May 6, 2019.

7 Donovan Jackson. WAFB9. May 5, 2019. “State officials urge families to get a head start on hurricane preparedness.” https://www.wafb.com/2019/05/06/state-officials-urge-families-get-head-start-hurricane-preparedness/. Accessed May 6, 2019.

Guarantees and protections provided by insurance products are backed by the financial strength and claims-paying ability of the issuing insurer.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Efforts Growing to Address Mental Health Issues

Although mental illness has long been stigmatized, fortunately, things are beginning to change. Starting this year, dozens of health systems are adopting widespread solutions to address mental health conditions, including untreated depression, teen suicide and post-traumatic stress disorder (PTSD).1

Here are some startling statistics:2

 

As of 2016, 44.7 million American adults had experienced a mental health illness.

·      35 percent of adults with a serious mental illness are not receiving mental health treatment.

       25 percent of teenagers experience at least mild symptoms of depression.

Addressing mental health care is important because, in the long-term, a nationwide mental health crisis could impact our economic viability and gross domestic product. Mental illness is one of today’s top causes of worker disability. Mental health conditions are responsible for 62 percent of missed work days, and 42 percent of employees who have a mental health issue say they have come to work with suicidal feelings.3

 

Consider that mental health was considered a pre-existing condition when individual health insurance policies required medical underwriting. This type of condition could trigger higher premiums, or coverage could be excluded. If the most recent district court ruling, which declared the Affordable Care Act unconstitutional, is upheld, we may return to policies in which such pre-existing conditions can increase rates, are excluded from coverage or are the reason coverage is denied. 4

 

As more people have been diagnosed with mental health conditions in recent years, this could pose a very real and costly concern. If you’re looking for ways to help cover future medical costs, we can help you explore your options , so give our office a call.

 

The potential expense of cognitive care also is important when planning for retirement. If one or both spouses begin to suffer from Alzheimer’s disease or another form of dementia, a great deal of thought needs to go into long-term care and housing options. As for treatment, early diagnosis seems to be a key to lessening symptoms that often require more comprehensive caregiving. 

 

If personal caregiving — whether by a paid provider or family member — is now part of your life or may be in the future, new resources are being developed constantly. For example, “memory cafés” are cropping up across the country. These gathering places for both those with Alzheimer’s disease and their caregivers are places to share camaraderie with others experiencing similar challenges. 5   

 

Memory cafés offer programs designed to help those with dementia enjoy a higher quality of life, such as playing music from their past. These meet-up opportunities help mitigate the isolation frequently experienced in these situations and offer caregivers a break to commiserate without worrying about the social stigma of behavioral issues in public. It is a place where other people understand exactly what your life is like, and that is pretty extraordinary.6

 

If interested, check out the nationwide Memory Café directory.7

 

Content prepared by Kara Stefan Communications.

 

1 Yahoo Finance. April 25, 2019. “28 Health Systems Commit to Transforming Behavioral Health in Hundreds of Communities Nationwide.” https://finance.yahoo.com/news/28-health-systems-commit-transforming-130000980.html. Accessed April 30, 2019.

2 Ibid.

3 Susan Rupe. Insurance News Net. April 19, 2019. “Mental Health Issues Hurting Workers, Employers.” https://insurancenewsnet.com/innarticle/mental-health-issues-hurting-workers-employers#.XMsYsC-ZNAZ. Accessed April 30, 2019.

4 Kaiser Health News. May 2, 2019. Trump Administration Formally Asks Court To Strike Down Entirety Of The ACA. https://khn.org/morning-breakout/trump-administration-formally-asks-court-to-strike-down-entirety-of-the-aca/. Accessed May 2, 2019.

5 Bonnie Petrie. Texas Public Radio. March 19, 2019. “Special Cafe Offers An Oasis For People With Alzheimer’s And Their Caregivers.” https://www.tpr.org/post/special-cafe-offers-oasis-people-alzheimers-and-their-caregivers. Accessed April 30, 2019.

6 Ibid.

7 Memory Café Directory. https://www.memorycafedirectory.com. Accessed April 30, 2019.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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All About Homeowners Insurance

According to Zurich North America’s chief claims officer, natural hazards are more common and more damaging than in the past. The time to act and reduce future risk is now, particularly when it comes to nationwide infrastructure. For example, U.S. roads and bridges were simply not built for the severity and frequency of storms and flooding we are experiencing today. The roads are not high enough and do not have enough space for water to flow around and under them.1

While national infrastructure is a bigger problem than the average citizen can manage, it does beg the question of whether we have the proper insurance to help protect our long-term financial future. A lot of people wait to retire until after they’ve paid off their mortgage. But what if at some point during retirement your home is damaged beyond repair and you’re forced to rebuild only to find you don’t have enough insurance to cover the expense? Would you need to use retirement assets to make up the cost, and would that impact your ongoing retirement income? 

These are the types of questions homeowners should ask themselves, particularly those engaged in planning for retirement or who are already retired. We’re happy to help weigh your options and recommend versatile insurance solutions. As Zurich’s chief claims officer cautioned, now is the time, so give us a call to get started.

How do you know if you have enough insurance to cover today’s unpredictable weather patterns? According to analytics firm CoreLogic, three out of every five homes in the U.S. are underinsured by an average of 20 percent less than full value. In contrast, perhaps you’re overpaying for too much coverage. One study of South Florida residents found that many high-value homes on the coast are overinsured because homeowners bought coverage to meet the property’s market value, not replacement value.2

This is a common mistake. Recognize that even if your home is demolished in a storm, you still own the land, so you need coverage only for the cost to rebuild. That amount is inevitably less than the overall real estate value — particularly in coastal areas where the market value of property is often pegged to its proximity to the ocean.3

When you purchase coverage termed “actual cash value,” you are reimbursed for the value of your home based on its current condition. However, if you have an older home that hasn’t been renovated with new windows, cabinets, appliances and so on, your payout may not cover the cost of buying new components — and no one wants to stick old windows and cabinets in a newly built house.4

That’s why it is usually best to purchase comprehensive replacement cost coverage. This payout is based on the actual cost to rebuild with all new materials; the former structure’s depreciation status is not a factor.5

It’s also important to adequately insure your belongings inside the home, preferably by creating a home inventory to both estimate their total value and to help you file claims. The easiest way is to simply go around your house with your cell phone and take pictures of every nook and cranny, even closets, the garage, the attic and outdoor storage units. Save these photos on the cloud, ensuring they’re always available and easily accessible even if your home is damaged. A typical home insurance policy covers possessions at about a 70 percent ratio to the value of the structure. For example, a home insured for $200,000 would pay out about $140,000 for possessions.6

If you’re considering making renovations on your home, experts recommend that you pay extra now to procure high-quality materials and professional installers. For example, depending on where you live, install a new roof rated for winds up to 130 mph and siding made of a hardy material, such as engineered wood or fiber-cement. Note, too, that higher-rated materials could trigger a discount on your homeowners insurance premium.7

Content prepared by Kara Stefan Communications.

1 Insurance News Net. April 29, 2019. “North Carolina Not Doing Enough To Mitigate Hurricane Risks, Report Finds.” https://insurancenewsnet.com/oarticle/north-carolina-not-doing-enough-to-mitigate-hurricane-risks-report-finds#.XMcpqS-ZNAY. Accessed April 29, 2019.

2 Ron Hurtibise. South Florida Sun Sentinel. July 13, 2018. “Do you have enough homeowner insurance? Here’s how to find out.” https://www.sun-sentinel.com/business/fl-bz-do-you-have-enough-property-insurance-20180711-story.html. Accessed April 29, 2019.

3 Ibid.

4 G.M. Filisko. Houselogic. “Homeowners Insurance: Are You Over- or Underinsured?” https://www.houselogic.com/finances-taxes/home-insurance/homeowners-insurance-are-you-over-or-underinsured/. Accessed April 29, 2019.

5 Ibid.

6 Emmet Pierce. NetQuote. “Home and auto insurance: Are you overinsured or underinsured?” https://www.netquote.com/home-insurance/overinsured-or-underinsured. Accessed April 29, 2019.

7 KWCH12. April 23, 2019. “Choosing siding and roofing for storm protection.” https://www.kwch.com/content/news/Choosing-siding-and-roofing-for-storm-protection-508937871.html. Accessed April 29, 2019.

Guarantees and protections provided by insurance products are backed by the financial strength and claims-paying ability of the issuing insurer.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Notes on Social Security

The Federal Trade Commission (FTC) reports that Social Security beneficiaries have lost $6.7 million in two months resulting from a new, highly effective scam. This is how it works: Someone calls you and says they are with the Social Security Administration (SSA), stating they regret to inform you that your Social Security payments have been suspended due to suspicious activity, or they claim you’ve been involved in a crime. Oddly enough, they then ask you to pay them money — preferably by gift card!1

Apparently, scammers like gift cards because they can use the money quickly with no paper trail.  This may sound like an obvious ploy, but bear in mind that it is a widely successful scam. Those in retirement become understandably concerned when one of their primary sources of income is threatened. Be aware, however, that the SSA would never call and threaten to stop paying your benefits or ask you for money, and certainly not ask to be paid by gift card.2

The instinct to be alarmed when our income is threatened is perfectly natural. One way to help avoid this feeling is to develop multiple streams of income as part of your retirement income planning process. In addition to Social Security, you can develop a secondary income stream by repositioning assets into a guaranteed level of lifetime income through the use of an annuity. If you’d like to learn more, please give us a call.

Another question near-retirees often ponder is whether to start drawing Social Security benefits early in the process or wait and let them accrue. Often times, retirees are better off delaying benefits as long as possible. One exception may be if you are in poor health. If you are diagnosed with a terminal illness with a limited life expectancy, it may be prudent to start taking benefits. However, consider whether or not you really need the income and how much your spouse may receive once you’re deceased. In other words, it may be worth delaying benefits to increase the amount your spouse receives if you don’t actually need the money right away.3

Some individuals retire and then decide retirement is just not for them. In fact, more than 50 percent of people nearing retirement say they expect to re-enter the workforce at some point after they retire. This phenomenon has been dubbed “unretirement,” taking its cue from Millennials who enjoy jumping in and out the workforce.4

The SSA will even let you pay back your benefits so they can accrue longer if you decide to go back to work within 12 months of applying for them. You must be under age 70, submit the appropriate form and pay back all benefits to date. You can reapply later and enjoy a higher benefit just as if you’re drawing it for the first time.5

In regard to how well SSA funds are holding up, there’s a new concern stemming from the current administration’s immigration policy. Unauthorized workers paid about $12 billion in tax revenues for Social Security in 2010 alone.6

According to Alan Greenspan, former chairman of the Federal Reserve, immigrants have been contributors to our Social Security, Medicare and Medicaid programs for as long as they’ve been in place. If the workforce is reduced due to a cutback in immigration — whether documented or undocumented — taxpayers may end up footing the bill. With America’s population aging quickly and fewer workers entering the job market, there is a drag on investment, growth and payroll tax revenues. If we continue down this current path, Greenspan says, Social Security benefits will need to be cut by as much as 24% in the future, or taxes will have to be raised.7

Content prepared by Kara Stefan Communications.

1 Katie Pelton. KKTV News. April 15, 2019. “Voice of the consumer: Social Security scam reports skyrocketing.”  https://www.kktv.com/content/news/Voice-of-the-consumer-Social-Security-scam-reports-skyrocketing-508588551.html. Accessed April 15, 2019.

2 Ibid.
3 Liz Weston. Los Angeles Times. April 14, 2019. “Don’t make this Social Security mistake when planning retirement.” https://www.latimes.com/business/la-fi-money-talk-social-security-delay-20190414-story.html. Accessed April 15, 2019.

4 Kimberly Anne Smith. Bankrate.com. April 12, 2019. “How ‘unretiring’ to go back to work can affect your Social Security benefits.” https://www.bankrate.com/retirement/social-security-benefits-affected-unretiring-work/. Accessed April 15, 2019.

5 Ibid.

6 Catherine E. Shoichet. CNN. April 15, 2019. “Undocumented immigrants are paying their taxes today, too.” https://www.cnn.com/2019/04/15/us/taxes-undocumented-immigrants/index.html. Accessed April 15, 2019.

7 Insurance News Net. April 2019. “Ex-Fed Boss Greenspan Urges More Immigration And Less Social Security.” https://insurancenewsnet.com/oarticle/ex-fed-boss-greenspan-urges-more-immigration-and-less-social-security#.XLUt8y-ZNAY. Accessed April 15, 2019.

Our firm is not affiliated with the U.S. government or any governmental agency.

Annuities are insurance contracts designed for retirement or other long-term needs. They provide guarantees of principal and credited interest, subject to surrender charges. Annuity guarantees and protections are backed by the financial strength and claims-paying ability of the issuing insurance carrier.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The Future of AI in Health Care

Artificial intelligence (AI) is not just for Amazon’s Alexa anymore. Health care patients are starting to see more mainstream uses of AI-enabled tools, such as:1

  •  Robot-assisted surgery
  •  Virtual nursing assistants that stay in contact with both patients and providers
  • Connected health management devices that you can download on your smartphone, wear on your body or track online
  • Diagnosis assistance by reviewing symptoms and medical images

Spending is on the rise for AI uses in health care, with a survey of health care organizations finding that they expect to invest an average of $32.4 million over the next five years in the technology. The survey also found that 94% of the respondents expect the investment in AI technology to eventually lead to more “equitable, accessible and affordable health care.”2

In the meantime, health care costs today are as unpredictable as health care itself. It’s a good idea to have a plan to pay for health care expenses, particularly during retirement when you are likely to be on a fixed income. If you would like to discuss strategies for paying for health care during retirement, please give us a call. We’d love to help.

As a refresher, AI isn’t a singular technology. It’s a categorical term that refers to a wide swath of tools that utilize deep learning, machine learning and natural language processing to operate similarly to the ways humans engage in learning and reasoning. Here’s the simple breakdown:3

  • Deep learning — Learning from repetitive action by adjusting for errors to hone the accuracy of the output
  • Natural language processing — The interpretation of speech and text
  •  Machine learning — Using advanced statistical techniques to identify data patterns and  make predictions

AI is being used for a wide variety of applications across the health care spectrum, from prevention to diagnosis to follow-up. In a recent report, Morgan Stanley Research’s Medical Tech and Services team found that the new learning technology can be deployed to enhance productivity, reduce the cost of treating patients and drive growth in the health care industry.4

Over the next five years, Morgan Stanley expects the global market for AI-enabled health care to swell from $1.3 billion to $10 billion, growing at a 40 percent annual compound rate.5

Content prepared by Kara Stefan Communications.

1 Cognilytica. 2018. “9 ways in Which AI Is Transforming Healthcare.” https://www.cognilytica.com/wp-content/uploads/2018/07/8-ways-in-which-AI-is-Transforming-Healthcare-CGIG0072.pdf. Accessed April 1, 2019.

2 Fred Donovan. HIT Infrastructure. Nov. 16, 2018. “Healthcare Firms to Spend Average of $32M on Artificial Intelligence.” https://hitinfrastructure.com/news/healthcare-firms-to-spend-average-of-32m-on-artificial-intelligence. Accessed April 9, 2018.

3 Forbes. April 1, 2019. “How Is AI Working For Health Care?” https://www.forbes.com/sites/optum/2019/04/01/how-is-ai-working-for-health-care/#6c05adce10c0. Accessed April 1, 2019.

4 Morgan Stanley. Feb. 26, 2019. “Could Artificial Intelligence Transform Healthcare?” https://www.morganstanley.com/ideas/medtech-artificial-intelligence. Accessed April 1, 2019.

5 Ibid.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Take Another Look at Life Insurance

Today, more Americans are getting their life insurance through their employer rather than purchasing a policy on the individual market, according to LIMRA, an industry market research firm.1 At the same time, fewer employers are offering life insurance as a benefit. LIMRA research showed 23 percent fewer employers offered life insurance in 2017 compared with 2006.2

Life insurance is important to protect a family from the loss of income should a household provider pass away. Even if policy proceeds aren’t enough to sustain a family for life, they can offset some initial expenses that otherwise might create a financial burden. For example, immediate expenses like funeral costs, mortgage/rent, car payments, loans and everyday bills. From a longer-term perspective, a healthy payout could pay off a mortgage balance, current/future college expenses, student loans or credit card balances. Life insurance proceeds also can be used to help fund the means for future income, such as helping a surviving spouse get the education or certifications needed to obtain a good-paying job, or to pay for child/elder care.

We are happy to help you evaluate your circumstances to determine your insurance needs, whether you currently have sufficient coverage for your situation or may need to bolster your coverage.

If you do receive coverage through your employer, make sure you have enough. The standard benefit is typically one to three times your annual salary. If your employer offers supplemental coverage on a voluntary basis, buying it at your employer’s group discount rate may be the least expensive route.

Bear in mind that there are no tax consequences on employer-provided life insurance coverage up to $50,000. However, the portion of premiums paid that represents any amount over $50,000 in coverage is taxable, regardless of whether the amount is paid for by you or your employer, because it’s considered a benefit that’s comparable to additional income.3

Most employers offer term life insurance, which typically locks in the premium rate for a period of time, ranging from 10 to 30 years – available in five-year increments. Also note that a policy you get from work is generally a guaranteed issue, whereas if you purchase life insurance on your own you’ll be subject to medical underwriting. Underwriting can trigger a higher premium or even cause you to be turned down altogether.4

Many employers do not offer whole life insurance, which may be more appropriate depending on your situation. As the name implies, whole life is designed to last your entire lifetime, plus it has a cash value. That means that if at any point you decide you no longer want or need the policy, you can get out some of the money you put into it. However, be aware that whole life generally costs three to five times more than term life insurance.4

Also note that a whole life insurance policy is an asset. Many of these policies pay dividends, which can be used to pay the premiums. Over time, some policies grow significantly in value and you may be able to borrow money from the cash value account if needed.5

Content prepared by Kara Stefan Communications.

1 LIMRA. March 27, 2018. “New LIMRA Research Finds 23 Percent Fewer Employers Are Offering Life Insurance to Their Workers.” https://www.limra.com/en/newsroom/industry-trends/2018/new-limra-research-finds-23-percent-fewer-employers-are-offering-life-insurance-to-their-workers/. Accessed April 5, 2019.

2 Ibid.

3 IRS. Nov. 29, 2018. “Group-Term Life Insurance.” https://www.irs.gov/government-entities/federal-state-local-governments/group-term-life-insurance. Accessed March 25, 2019.

4 Ken Fisher. USA Today. March 17, 2019. “Don’t dismiss life insurance as too pricey. Here’s how to pick a plan.” https://www.usatoday.com/story/money/2019/03/17/life-insurance-heres-how-companies-price-plans/3166180002/.

 Accessed March 25, 2019.

4 LifeInsuranceInsider.com. Oct. 27, 2018. “Group Life Insurance 2019 Vs. Private Individual Life Insurance 2019.” http://thelifeinsuranceinsider.com/2018/10/group-life-insurance-2019-vs-private-individual-life-insurance-2019/.  Accessed March 25, 2019.

5 Robert Mauterstock. Forbes. March 22, 2019. “7 Steps To Help Your Parents Avoid Expensive Life Insurance Mistakes.” https://www.forbes.com/sites/robertmauterstock/2019/03/22/7-steps-to-help-your-parents-avoid-expensive-life-insurance-mistakes/. Accessed March 25, 2019.

Life insurance policies are contracts between the client and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The population remains mobile as extreme weather knocks large regions

These days people are more transient, less grounded by geographical roots and familial connections. Perhaps we have become more willing to move when life throws us lemons — choosing to make lemonade somewhere else.

Economists track migration trends, and cities watch such data closely. One recent study by real estate brokerage Redfin revealed that the top U.S. cities that residents are looking to move from include Eugene, Oregon; Southbend, Indiana; Orlando, Florida; Milwaukee; Austin, Texas; Chicago; New York; San Francisco; Miami; and Columbia, South Carolina. Reasons for these migrations vary, ranging from excess traffic and crime to higher costs of living and taxes.1

Because the residential real estate market continues to be competitive,2 it’s a good time for retirees and near-retirees to take a good look at their financial portfolio. In other words, a home is not just where the heart is — it’s also a financial asset. If you’d like to consider ideas that may help with your retirement income, we’ve got ideas we’d be happy to share and tailor to your needs.

Extreme weather

However, the real estate market is not without significant headwinds. Extreme weather events have created a headache even for those with luxury holdings — such as coastal and other flood-prone areas. Congress and FEMA are working on ways to better secure the National Flood Insurance Program – including advocating a private flood insurance market in the future.3

In recent months, homes in the low-lying plains of the Midwest have experienced rampant and serious flooding. In March, a “bomb cyclone” combined hurricane-speed winds and blizzard conditions with heavy rains that placed large parts of Nebraska and a few other states underwater.4 The subsequent problems include more than just damage to homes and businesses, they also include the scarcity of potable drinking water, corroding infrastructure and even blocked access to some communities.5

When it comes to buying, selling and relocating, there’s a whole host of concerns homeowners must consider, including the potential for flooding and mudslides caused by heavy rains, as well as damage from other natural disasters. Please make sure you are adequately insured.

Content prepared by Kara Stefan Communications.

1 Doug Whiteman. MoneyWise.com. March 18, 2019. “People Living in These US Cities Are Most Eager to Get Out.” https://moneywise.com/a/people-in-these-us-cities-most-want-to-get-out. Accessed March 18, 2019.

2 National Association of Realtors. March 6, 2019. “Majority of Real Estate Firms Remain Optimistic, Evolving Technology Remains a Challenge.” https://www.nar.realtor/newsroom/majority-of-real-estate-firms-remain-optimistic-evolving-technology-remains-a-challenge. Accessed March 18, 2019.

3 National Association of Realtors. March 13, 2019. “Realtors Testify to House Committee on National Flood Insurance Program.” https://www.nar.realtor/newsroom/realtors-testify-to-house-committee-on-national-flood-insurance-program. Accessed March 18, 2019.

4 Gabriella Borter. Reuters. March 16, 2019. “Historic floods hit Nebraska after ‘bomb cyclone’ storm.” https://www.reuters.com/article/us-usa-weather-idUSKCN1QY00Y. Accessed March 18, 2019.

5 Amir Vera. CNN. March 17, 2019. “Nebraska floods have broken records in 17 places across the state.” https://www.cnn.com/2019/03/17/us/nebraska-flooding-sunday-wxc/index.html. Accessed March 18, 2019.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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