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Clean Living

We frequently hear about the various effects of climate change and how they can be mitigated. It often feels as though households and companies must make significant sacrifices to undo a lot of the damage that’s been done. However, there also are many positive benefits that can come from making certain changes, both locally and globally.

For example, scientists say that planting billions of trees across the planet is the cheapest and most effective change we can make. Trees absorb and store the type of carbon dioxide believed to cause global warming. Moreover, scientists say what is “mind blowing” is that a massive worldwide planting effort could remove two-thirds of emissions currently in the atmosphere.1

 

This strategy doesn’t require restrictive limits for factories but still addresses climate change with an appealing solution. Planting trees also may address long-term health care costs as they mitigate air pollution, which contributes to instances of stroke, heart attack, diabetes, lung cancer and chronic lung disease.2

 

Additionally, planting more trees in your own yard can provide shade and potentially reduce the use of your central air conditioning, not to mention help clean the breathing air around your home.3

 

It’s common to instinctively balk at the idea of change, especially when things seem to be working fine as they are. But sometimes it’s a good idea to at least review our current situation, including our finances and insurance coverages. This can help ensure that they are aligned with our current financial goals and objectives. Being proactive may also help avoid an unexpected scenario down the road. Give us a call if you’d like an insurance review.

 

There may be some other simple things you can do around your home that both help the environment while offering immediate benefits to you. For example, while you likely use energy-efficient bulbs in light fixtures inside your home, when was the last time you upgraded your external lighting? Replacing older lighting solutions with LED (light-emitting diode) bulbs can help save money on your electric bill while providing brighter light to enhance safety and security. And, while solar lights may not be as bright as LEDs, they are continually being improved and are easy to install and maintenance free. Solar fixtures may help reduce your energy bill, allowing you to create a lighting design for landscaping that you may not have done before due to the expense.4

 

Another energy-efficient way to make your home more comfortable and reduce energy bills is through window tinting. You may use this on your car windows, so why not on your house windows? Lightly tinted window film can help block heat in the summer and reduce heat loss while allowing solar heat to penetrate during winter — all without altering your view outdoors. You can shop for window-tinting DIY kits at local home center stores or search online for a professional installation company.5

 

Content prepared by Kara Stefan Communications.

1 Damien Carrington. The Guardian. July 4, 2019. “Tree planting ‘has mind-blowing potential’ to tackle climate crisis.” https://www.theguardian.com/environment/2019/jul/04/planting-billions-trees-best-tackle-climate-crisis-scientists-canopy-emissions. Accessed Aug. 1, 2019.

2 IHME. April 3, 2019. “State of Global Air 2019 Report.” http://www.healthdata.org/news-release/state-global-air-2019-report. Accessed Aug. 16, 2019.

3 Conserve Energy Future. “30+ Terrific Ways To Conserve Natural Resources.” https://www.conserve-energy-future.com/terrific-ways-to-conserve-natural-resources.php. Accessed Aug. 1, 2019.

4 Duke Energy. “Energy-Efficient Lighting: Inside and Out.” http://www.myenergytips.com/article.aspx?accountId=210005&articleId=46709&nl=25396&userID=30921685. Accessed Aug. 1, 2019.

5 James Dulley. Daily Herald. July 12, 2019. “Window films can reduce your cooling bills.” https://www.dailyherald.com/entlife/20190712/window-films-can-reduce-your-cooling-bills. Accessed Aug. 1, 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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Social Security: Facts and Tidbits

The Social Security Administration issues about 5.5 million new cards each year. Social Security numbers go out of use when their owners pass away and are never reused. Also, the first three digits of the Social Security number reflect the application location for your first card.1

Here’s another interesting tidbit: You can apply to have your Social Security number changed if you can successfully argue a necessary reason, such as a stolen identity, being stalked by an individual who may track your Social Security number or objecting to a sequence of numbers for cultural or religious reasons.2

 

If you’re counting on Social Security as a primary source of retirement income, there are some things you should know. For instance, the more income you earn now, the fewer household expenses your Social Security benefit will cover. That’s because while a lower income earner may get a lesser benefit based on his record of earnings, that benefit may cover a higher portion of his prior earnings. Low earners retiring at age 65 in 2018 can expect Social Security to cover about half their prior earnings. However, the higher earner’s benefit is expected to cover only a third of his prior earnings. 3

Be aware that Social Security benefits tend to be less than what people expect they will receive. In 2018, the average retirement benefit was about $1,413 a month ($17,000 a year). In terms of how our government-sponsored benefits compare to the rest of the world, the U.S. ranks in the bottom third of developed countries as measured by the percentage of an average worker’s earnings replaced by a public pension.4

If you’re concerned that you don’t have enough assets to supplement your Social Security benefit in retirement, please give us a call. We can help identify potential retirement income gaps and create a strategy using a variety of insurance products to help you pursue your financial goals.

A recent study found that only 4 percent of retirees optimize their benefits; which means that 96 percent of retirees don’t get the full amount of benefits to which they may be entitled. That averages out to a loss of about $111,000 per household.5

 

How do you optimize your benefits? It’s often discussed that the best way is to delay taking them until age 70 — and then live for an extended period of time. Let’s consider a hypothetical example. If your benefit is $2,000 per month at your full retirement age of 66, but you delay drawing it for another four years, that benefit will grow by 8% a year for a total of $2,600 more a month for the rest of your life. From a cumulative perspective, if you then live to age 90 you would receive a total of $652,560 in Social Security benefits.6 However, all situations are different, and your personal needs and objectives should be considered to help you determine the appropriate time to claim your benefits.

 

It’s also worth noting that since the decline of company-sponsored pensions, Social Security may be the only source of retirement income that is not subject to market volatility and the vagaries of the economy. Because the risk pool covers nearly the entire U.S. adult population — including people not expected to live long in retirement — and because you can’t borrow from future benefits or request a lump sum, it’s a very stable source of income. And, it’s relatively cheap for the government to administer the program, costing only 0.7 percent of annual benefits.7

Content prepared by Kara Stefan Communications.

 

1 Len Penzo. Len Penzo dot Com. Aug. 13, 2018. “18 Fast Facts You Didn’t Know About Social Security Numbers.” https://lenpenzo.com/blog/id1510-18-fast-facts-you-didnt-know-about-social-security-numbers-2.html. Accessed July 5, 2019.

2  Sean Williams. The Motley Fool. Nov. 12, 2017. “7 Weird Social Security Facts You Never Knew About.” https://www.fool.com/retirement/2017/11/12/7-weird-social-security-facts-you-never-knew-about.aspx. Accessed July 5, 2019.

3 Center on Budget Policy and Priorities. Aug. 14, 2018. “Policy Basics: Top Ten Facts about Social Security.” https://www.cbpp.org/research/social-security/policy-basics-top-ten-facts-about-social-security. Accessed July 5, 2019.

4 Ibid.

5 CBS News. June 28, 2019. “Almost all Americans take Social Security at the wrong time, study says.” https://www.cbsnews.com/news/study-says-retirees-lose-more-than-100k-by-claiming-social-security-at-the-wrong-time/. Accessed July 5, 2019.

6 Jackie Youseff. Vanguard Blog. May 30, 2018. “The Social Security timing debate.” https://vanguardblog.com/2018/05/30/the-social-security-timing-debate/comment-page-4/. Accessed July 5, 2019.

7 Center on Budget Policy and Priorities. Aug. 14, 2018. “Policy Basics: Top Ten Facts about Social Security.” https://www.cbpp.org/research/social-security/policy-basics-top-ten-facts-about-social-security. Accessed July 5, 2019.

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

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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Affordable Housing a Challenge for many Americans

If you live in or have recently visited one of America’s larger cities, you may have noticed that the homeless problem has grown in recent years. A 2018 analysis by real estate data company Zillow showed that while the level of homelessness has declined nationally — down 13 percent over the past eight years, according to the U.S. Department of Housing and Urban Development — rates of homelessness are growing quickly in large metropolitan areas with high housing costs, such as Los Angeles, New York, San Francisco and Washington, D.C.1

A recent home affordability report published by ATTOM Data Solutions revealed that median residential home sale prices were too high for the average U.S. worker to afford in about three-quarters of the nation’s real estate markets.2

Take Los Angeles, for example. According to the California Housing Partnership Coalition, workers need to earn almost $50 an hour to afford the median monthly rent of $2,471.3

In Chicago, among the 86,000 people who experienced homelessness in 2017, about 18,000 had a college education and more than 13,000 had jobs — illustrating that the problem is frequently less about accountability and more about affordability.4

 

There are several ways to gauge today’s real estate market. On the one hand, homeowners with significant equity may be sitting on an asset that can help fund their retirement if they take advantage of high real estate sale prices today. On the other hand, let’s say you sell your home — where will you live? For people actively planning for retirement in the next few years, it’s worth thinking about your long-term housing needs. The time could be right to downsize in preparation for retirement while you can command a robust price and then reposition a portion of your assets for long-term financial security.

 

Of course, selling your home for top dollar doesn’t exactly help solve America’s homeless problem — although it may help prevent you from having housing issues down the road.

 

In late June, President Trump signed an executive order designed to eliminate a multitude of regulatory barriers that hinder the development of affordable housing. His objective is to address restrictions on zoning and growth management, rent control, building and rehabilitation codes, energy and water efficiency mandates, maximum-density allowances, historic preservation requirements, and wetland and environmental regulations.5

 

The president also signed a bill into law that enables military veterans to borrow above the current cap of $484,350 (for most counties) without a down payment.6

Content prepared by Kara Stefan Communications.

 

1 Megan Cerullo. CBS News. Dec. 11, 2018. “Homelessness on the rise in some U.S. cities.”

https://www.cbsnews.com/news/homelessness-on-the-rise-in-some-u-s-cities/. Accessed July 23, 2019.

2 Alexandre Tanzi. Bloomberg. June 26, 2019. “Homebuying Difficult for Americans in Three-Fourths of Markets.” https://www.bloomberg.com/news/articles/2019-06-27/homebuying-difficult-for-americans-in-three-fourths-of-markets. Accessed July 5, 2019.

3 Jamie Yuccas. CBS News. July 5 2019. ” ‘There’s no way out of this’: Lack of affordable housing contributes to Los Angeles homeless crisis.” https://www.cbsnews.com/news/homeless-population-los-angeles-county-california-rises-2019-07-05/. Accessed July 5, 2019.

4 Peter Nickeas. Chicago Tribune. July 2, 2019. “Thousands of Chicago’s homeless have jobs, some college education, contrary to stereotypes, new study says.” https://www.chicagotribune.com/news/breaking/ct-chicago-homeless-study-myths-20190702-wtmsehe6ffayxjdbpi3sjav3oq-story.html. Accessed July 23, 2019.

5 White House. June 25, 2019. “Executive Order Establishing a White House Council on Eliminating Regulatory Barriers to Affordable Housing.” https://www.whitehouse.gov/presidential-actions/executive-order-establishing-white-house-council-eliminating-regulatory-barriers-affordable-housing/. Accessed July 5, 2019.

6 Jessica Guerin. Housing Wire. June 26, 2019. “Bill eliminating VA loan cap signed into law.” https://www.housingwire.com/articles/49421-bill-eliminating-va-loan-cap-signed-into-law. Accessed July 5, 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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Upcoming Changes for Medicare Supplement Insurance Plans

A Medicare supplement insurance plan, also known as a Medigap or Med Supp plan, is purchased in combination with original Medicare to help pay out-of-pocket costs not covered by original Medicare. As of Dec. 31, 2018, nearly 13.6 million people were covered by Med Supp plans, representing nearly a 4% increase from the previous year. Among the different types of supplemental insurance plans, each named with a letter, Plan F is by far the most popular. More than half of Med Supp plan members purchase Plan F.1

However, this dominance is likely to change next year. In 2015, as part of the Medicare Access and CHIP Reauthorization Act, Congress established a provision to stop offering Plan C and Plan F to newly eligible Medicare beneficiaries starting in 2020. Plans C and F offer a benefit that pays for the Part B deductible ($185 in 2019). Eliminating this benefit among original Medicare beneficiaries will help curb government spending for the program.2

Note that any eligible beneficiary who turns age 65 before Jan. 1, 2020 will still be able to enroll in Plan C or F after that date, but the plans will no longer be offered to people who turn age 65 in 2020 or beyond.3

There are currently 10 different supplemental insurance plans available, ranging from A to N. Each type of plan offers the exact same benefits — some may offer basic benefits (e.g., Plan A) while others are more comprehensive (e.g., Plan F). However, be aware that not every state permits all plans and that the cost of each plan will vary by issuers within each state. In fact, Massachusetts, Minnesota and Wisconsin each have customized the requirements for their own Medigap plans, but within each of those states, all individual plan benefits are standardized. This means the only variance is the cost and the issuer.4

Because the popular Plan F will no longer be offered to new Medicare beneficiaries, many anticipate that Plan G will become the plan of choice because it offers all the same benefits except coverage for the Part B deductible.5

As of this writing, Plan G premiums are considerably less than Plan F premiums (the national average in 2018 was $155.70 per month compared to $185.96 for Plan F). If premiums remain that low, the total annual savings on premiums for Plan G ($363 a year) would more than cover the $185 needed to pay for the Part B deductible.6

There’s another potential change on the horizon for Medigap plans. The House Ways and Means Committee has recently initiated an interest in offering long-term care benefits through Medicare supplemental insurance plans. The committee is seeking recommendations for daily and lifetime caps as well as waiting periods to help keep the plans affordable.7

 

These changes follow on the heels of recent alterations to Medicare Advantage (MA) plans. Until a recent rule change that went into effect this year, Medicare did not offer any long-term care benefits beyond coverage for 100 days at a nursing home following a hospital stay. However, MA plans now have the option to offer benefits that cover home aide assistance when prescribed by a licensed healthcare provider. Be aware that this new rule does not apply to original Medicare; only MA plans.8

Content prepared by Kara Stefan Communications.

 

1 Mark Farrah Associates. May 20, 2019. “Medicare Supplement Enrollment Up Nearly 4% in 2018.” https://www.markfarrah.com/mfa-briefs/medicare-supplement-enrollment-up-nearly-4-in-2018/. Accessed June 28, 2019.

2 Ibid.

3 Sarah O’Brien. CNBC. June 26, 2019. “Medigap changes coming next year for future 65-year-olds.” https://www.cnbc.com/2019/06/26/medigap-changes-coming-next-year-for-future-65-year-olds.html. Accessed June 28, 2019.

4 Ibid.

5 Ibid.

6 Gail MarksJarvis. Reuters. Sept. 19, 2018. “Medicare supplement plans are changing; what you need to know.” https://www.reuters.com/article/us-column-marksjarvis-medigap/medicare-supplement-plans-are-changing-what-you-need-to-know-idUSKCN1LZ18F. Accessed June 28, 2019.

7 Susannah Luthi. Modern Healthcare. June 3, 2019. “House committee eyes expanding Medigap long-term care benefit.” https://www.modernhealthcare.com/politics-policy/house-committee-eyes-expanding-medigap-long-term-care-benefit. Accessed June 28, 2019.

8 Alex Guerrero. MedicareResources.org. Jan. 12, 2019. “To what extent will Medicare cover long-term care?” https://www.medicareresources.org/faqs/to-what-extent-will-medicare-cover-long-term-care/. Accessed July 16, 2019.

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

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 Millennial Effect

Recessions have consequences, and the Great Recession of 2008 may have produced one of the most influential consequences of all: the millennial mindset. Because of their early experiences in the “real world,” this generation is poised to have long-term significance — comparable to baby boomers — in work, play and politics. If you think boomers drove changes, just wait and see what millennials have in store. To put it in millennial terms, “Hold my avocado.”1

It’s been more than 10 years since the onset of the Great Recession. During that timeframe, millennials ranged in age from 12 to 27. Even the youngest were old enough to understand the impact of parents losing their jobs, not being able to make mortgage payments and, within a few years, feel the effects themselves when having to pay for college through student loans. Not only was their financial security threatened, but their future also looked bleak with a poor job market and low wages.2 Today, millennials are grown and still playing financial catch-up.

 

One of the best ways to deal with economic consequences is to prepare for them beforehand. That means saving during the good times in preparation for another weak economic cycle. If we can help you or the millennials in your life develop a savings strategy or help plan for retirement income, please give us a call.

 

In recent months, the Federal Reserve published a report observing that the millennial generation lacks the income and assets — in other words, economic power — comparable to consumer spending habits of previous generations. This is important because consumer spending is one of the driving forces of economic growth. Not only does this generation see relatively low wages and work for others, but they are less inclined to start their own businesses. Today, only 0.22 percent of millennials start a new business in any given month, compared to 0.37 percent of baby boomers, and they generate less annual business revenue.3

 

We tend to think of millennials as a singular generation but, much like baby boomers, the demographic comprises two groups: older and younger. Older millennials suffered the most from the last recession, as they lacked upwardly mobile job and income opportunities. Younger millennials came into their own during the recovery phase, so they are not quite as far behind. However, in terms of financial consequences, the two groups share a common trait of risk aversion and carry substantial student loan debt.4

 

In the corporate world, millennials are agents of change. By this time next year, they will represent 50 percent of the U.S. workforce, and their size alone can wield substantial power. They expect instant information, results and gratification, meaning they will insist companies stay up-to-date with advanced technology and automation — not necessarily a bad influence.5

 

In fact, older employees in the workplace are poised to benefit from millennial tendencies. While it’s easy to cry, “I didn’t get that perk when I was their age,” it’s worth recognizing that you can benefit from it now. One of the hallmarks of the millennial approach to work is that they expect to be valued and well-rewarded for hard work; a standard that older employees may use as well. Companies also are deploying new benefits to compete for millennial talent, including top-ranked perks and incentives, such as:6

·         Recognition

·         Wellness benefits

·         Work-life integration

·         Student loan assistance

When it comes to politics, millennial voters tilted Democrat when entering adulthood — a trend that continues to grow as they age. Today, 59 percent of millennials identify as Democrats and 32 percent as Republicans, and more members of this demographic identify as Independents than in older generations.7

 

Content prepared by Kara Stefan Communications.

1 Raisa Bruner. Time. Aug. 9, 2017. Hold My Avocado’ Is the Viral Catchphrase Millennials Have Been Looking For.” https://time.com/4893355/hold-my-avocado/. Accessed June 24, 2019.

2 Venessa Wong. BuzzFeed News. Sept. 25, 2018. “Here’s How Millennials’ Lives Were Changed By Recession 10 Years Ago.” https://www.buzzfeednews.com/article/venessawong/millennials-lives-changed-by-recession-2008-2018. Accessed June 24, 2019.

3 Jared Hecht. Forbes. Jan. 15, 2019. “How The Great Recession Killed The Entrepreneurial Spirit Of Millennials.” https://www.forbes.com/sites/jaredhecht/2019/01/15/how-the-great-recession-killed-the-entrepreneurial-spirit-of-millennials/. Accessed June 24, 2019.

4 Hillary Hoffower. April 4, 2019. “The Great Recession split the millennial generation down the middle, creating 2 groups with very different financial habits.” https://www.businessinsider.com/millennial-generation-gap-great-recession-financial-crisis-money-habits-2019-3. Accessed June 24, 2019.

5 Tejas Maniar. Mayfield Fund. March 25, 2019. “Benefits Trends for the Millennial Workforce.” https://www.mayfield.com/benefits-trends-for-the-millennial-workforce/. Accessed June 24, 2019.

6 Denise Power. Columbus Chamber of Commerce. March 21, 2019. “The Millennial Mindset: Employee Benefits for the Workforce’s Largest Generation.” https://columbus.org/2019/03/the-millennial-mindset-employee-benefits-for-the-workforces-largest-generation/. Accessed June 24, 2019.

7 Pew Research Center. March 20, 2018. “Trends in party affiliation among demographic groups.” https://www.people-press.org/2018/03/20/1-trends-in-party-affiliation-among-demographic-groups/. Accessed June 24, 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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Quick Income Ideas

The Federal Reserve recently reported that four out of 10 American adults surveyed said they would struggle to pay for an unexpected expense of $400 or more.1 This revelation goes against the common financial advice urging adults to have three to six months of expenses saved in an accessible account for emergencies.2

 

Nearly everyone has multiple financial priorities, so it’s important to create a strategy that allows you to easily access money. It’s usually not a good idea to consider accessing money locked up in CDs or taxable accounts, since that may trigger taxes and penalties. It’s also important to create a budget as part of your strategy so you can track household expenses. This can help you find ways to save for retirement and emergencies. If you’d like to learn more, please give us a call.

 

In the meantime, here are some ways you may be able to earn extra income you can dedicate either to a savings goal or a special purchase without depleting any savings you have.

 

Now that summer is in full swing, have you thought about renting out your house for some extra cash? You can either rent out a room or the whole house while you are on vacation. In some scenarios, homeowners aren’t required to report rental income on their federal income taxes if they rent out their primary residence for no more than 14 days a year.3 You should speak with a tax professional regarding your personal situation.

 

If you’re looking to downsize, combine your income-earning opportunity with decluttering. You can find a host of websites allowing your “trash” to become someone else’s “treasure” — with a reach far beyond your neighborhood. Check out the following websites for ideas on what could sell at a specific price:4

  • : Sell just about anythingAmazon
  • : Sell just about anythingeBay
  • : Books and textbooksBookFinder
  • : Clothes and accessoriesThredUp
  • :  DVDs, CDs, video games, cellphones and other tech productsDecluttr
  • : ElectronicsGazelle
  • : Vintage, antique and collectible itemsRubyLane
  • : Wedding dresses and accessoriesNearlyNewlyWed

If you just need cash now and then, consider setting your own schedule as an Uber or Lyft driver. Depending on a range of variables, you can earn anywhere from $13 to $17 an hour. While that may not fund your emergency savings account quickly, you can do it in your spare time while still working a full-time job.5

 

If you’re in a serious situation — particularly if your savings are being depleted by medical bills — consider GoFundMe. Between 2010 and 2017, more than 50 million people contributed more than $5 billion to GoFundMe campaigns, one-third of which went to medical fundraisers. Requests can generate as much as $100,000 from a combination of friends, family, neighbors and veritable strangers willing to help out.When you consider that you never know who you help with a charitable contribution, the GoFundMe platform at least allows donors to learn the recipient’s story and how their dollars help make a difference.6 

 

Content prepared by Kara Stefan Communications.

1 Matthew Boesler. Bloomberg. May 23, 2019. “Almost 40% of Americans Would Struggle to Cover a $400 Emergency.” https://www.bloomberg.com/news/articles/2019-05-23/almost-40-of-americans-would-struggle-to-cover-a-400-emergency. Accessed June 17, 2019.

2 Sebastian Obando. Forbes. June 14, 2019. “How to Create an Emergency Fund.” https://www.forbes.com/advisor/sebastian-obando/2019/06/04/how-to-create-an-emergency-fund/. Accessed June 17, 2019.

3 Darla Mercado. CNBC. May 15, 2019. “Don’t forget these tax breaks if you’re renting out your home this summer.” https://www.cnbc.com/2019/05/15/grab-these-tax-breaks-if-youre-renting-out-your-home-this-summer.html. Accessed June 17, 2019.

4 Leslie Truex. The Balance Small Business. April 26, 2019. “8 Fast and Easy Ways to Make Extra Money from Home.” https://www.thebalancesmb.com/make-extra-money-from-home-4053256. Accessed June 17, 2019.

5 Ridester.com. Jan. 22, 2019. “Uber vs Lyft: A Comprehensive Comparison.” https://www.ridester.com/uber-vs-lyft/. Accessed June 17, 2019.

6 Jeffrey Young. Huffington Post. June 10, 2019. “Life And Debt: Stories From Inside America’s GoFundMe Health Care System.” https://www.huffpost.com/entry/gofundme-health-care-system_n_5ced9785e4b0ae6710584b27. Accessed June 17, 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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Who is Caring for Our Elderly?

The “elderly” portion of retirement is the phase that is past travel, golf, shopping, piggyback rides and puzzles on the floor with the grandkids. It can often consist of isolation, loneliness and boredom — possibly compounded by the inability to drive, take a walk or even hear loved ones talk on the phone. Many continue living as their siblings and friends pass away, which can contribute to feelings of depression and listlessness.

Seniors who live alone often welcome ways to break up the monotony, such as responding to phone calls or a knock at the door by a stranger. This makes them more vulnerable to falling for lottery or sweepstake scams and “promising” investment opportunities.

 

Despite these drawbacks, more and more elderly people prefer to live out their years in their own homes. However, it’s important to recognize that adjustments should be made to support this scenario, and it’s better to start earlier rather than later so they get used to having in-home help. For example, elderly parents who resolve to live at home will likely need some degree of help with basic household chores, such as:

·         Cooking and preparing meals

·         Cleaning and maintaining the home

·         Shopping and buying necessities

·         Running errands

·         Managing money and paying bills

·         Speaking on the phone or through other devices

·         Taking prescribed medications

According to a study by Merrill Lynch, 40 million Americans are currently caregivers who provide assistance to nearly 50 million adults.1 Instead of enjoying middle age, many members of Generation X and baby boomers are surprised to find their days are filled with responding to the needs of elderly parents. The question becomes: Where can you find caregiver help so you can start to enjoy more of your golden years before possibly slipping into that situation yourself?

 

And beyond where you can find help, how will you pay for that care? We can help you and your parents evaluate a variety of life insurance and annuity products that offer benefits to assist with the costs of long-term care. If you’d like to learn more, please contact us.

 

The Institute on Aging reports that today’s average unpaid caregiver is a married, 46-year woman who holds a job earning about $35,000 a year.2 This demographic faces a dilemma that is similar to when they first started a family: Should an adult child give up her job to care for elderly parents? Given the fact that these are important years to aggressively save for retirement, that prospect can create a serious financial setback for the household.

 

If you’re looking for outside help for caregiving needs, consider the following resources:3

·         Work-sponsored Employer Assistance Program (EAP)

·         Local Council on Aging

·         Meals on Wheels

·         Senior transportation services

·         A personal emergency-response system device

·         24-hour in-home video monitoring system

·         Eldercare.gov

·         Caregiver.org

·         AARP.org/caregiving

A growing immigrant population represents a sizeable share of workers in the caregiving industry. Specifically, immigrants in 2017 accounted for:4

·         18.2 percent of health-care workers

·         23.5 percent of formal and informal long-term care workers

·         27.5 percent of direct-care workers

·         30.3 percent of nursing home housekeeping and maintenance workers

Among unauthorized immigrants working in the health care industry, 43.2 percent are employed in long-term care settings. While unauthorized immigration to the U.S. has been on the decline for many years, the current administration’s desire to focus on allowing entry to “skilled immigrants” could significantly reduce the number of low-wage workers that the caregiving sector desperately needs.5

 

For parents who don’t want a stranger milling about their home, you might consider a high-tech robot caregiver. While pricey, many caregiving robots offer Siri/Alexa type services to help answer questions and acquire information, dial phone calls to loved ones and emergency services, and even use artificial intelligence to engage in conversation, so the elderly person doesn’t feel so alone.6

 

Content prepared by Kara Stefan Communications.

 

1 Merrill Lynch. Oct. 2017. “The Journey of Caregiving: Honor, Responsibility and Financial Complexity.” https://mlaem.fs.ml.com/content/dam/ML/Registration/family-and-retirement/ML_Caregiving_WP_v02g.pdf. Accessed June 10, 2019.

2 Angela Stringfellow. Caregiver Homes. March 23, 2018. “The State of Caregiving 2018.” https://blog.caregiverhomes.com/stateofcaregiving. Accessed June 10, 2019.

3 AARP. June 2017. “Prepare To Care.” https://www.aarp.org/content/dam/aarp/caregiving/2018/02/prepare-to-care-guide-english-aarp.pdf?intcmp=AE-HF-CAR-P2CGD-ENG. Accessed June 10, 2019.

4 Leah Zallman, Karen E. Finnegan, David U. Himmelstein, Sharon Touw and Steffie Woolhandler. Health Affairs. June 2019. “Care For America’s Elderly And Disabled People Relies On Immigrant Labor.” https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2018.05514. Accessed June 10, 2019.

5 Ibid.

6 Luke Dormehl. Digital Trends. June 1, 2019. “The promise and pitfalls of using robots to care for the elderly.” https://www.digitaltrends.com/cool-tech/robots-caregiving-for-the-elderly/. Accessed June 11, 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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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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