Shortlink

Good News Abounds in the Housing Market

In March, average fixed mortgage rates moved lower than in recent months. In fact, they actually average even lower than this time last year. That’s particularly good news in light of the pick-up in the residential real estate market. This spring season has already resulted in a dramatic shift from buyer to seller’s market in much of the country.

 

While buyer traffic is up 40 percent from last year, according to the National Association of Realtors (NAR), lower inventory is what’s keeping sales in check–and driving prices higher.

 

[CLICK HERE to read the article, “January Existing-Home Sales Hold with Steady Price Gains, Seller’s Market Developing,” at Realtor.org, February 21, 2013.]

 

[CLICK HERE to view the video, “How ‘real’ is the real estate recovery?” at Merrill Lynch Wealth Management, December 10, 2012.]

 

Higher prices mean more borrowing, as evidenced by the jump in the number of jumbo mortgage applications recently. The NAR reports that sales are up by 38.7 percent from a year ago for homes with values between $750,000 to $1 million and 25.7 percent for homes over $1 million. That’s quite a remarkable comeback when you consider that jumbos were essentially unavailable in the wake of the housing crises. The hot areas of the country for high-net home sale activity include San Francisco Bay, Chicago’s north shore and the Hamptons.

 

[CLICK HERE to read the article, “Loans Go Jumbo, Again,” at Realty Times, March 1, 2013.]

 

[CLICK HERE to read, “Mortgage Rates Break Holding Pattern, Move Lower” at Realty Times, March 1, 2013.]

 

Itchy snowbirds may be out searching for a vacation home to help escape the long winter months of extreme weather that we now seem to be experiencing. Warmer cities such as Phoenix and Las Vegas saw the largest increases in their February year-over-year asking home prices–at jumps of 24.9 and 20.7 percent respectively.

 

[CLICK HERE to read the article, “As Asking Home Prices Keep Rising, Inventory No Longer in Free Fall” at Trulia, March 5, 2013.]

 

[CLICK HERE to read the article, “Vacation home buyers need to consider hidden costs: Property and State Taxes, Other Costs,” at CPA Practice Advisor, February 23, 2013.]

 

After years of watching home values drop, it’s good to see the market rebound. Even if you’re planning on staying put, home sales at higher prices in your area will help increase the value of your home. And, by the way, your property taxes.

 

As always, we’re here to help you make any big financial decisions. Give us a call if you’d like to discuss your situation.

 

Your financial professional is not permitted to offer, and no statement contained herein shall constitute tax, legal or accounting advice. Individuals should consult with a qualified professional regarding the applicability of this information to your situation. By contacting us you may be provided with information regarding the purchase of insurance products.

  

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

 

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.

Shortlink

The Planning for Retirement Conundrum

In our personal lives, we approach large amounts of debt with a long-term timeframe. For example, the 30-year mortgage. So it stands to reason that the U.S. national debt – currently in the ballpark of $16.7 trillion – will require a long-term plan as well.

 

If you’d like to get the up-to-the-fraction-of-a-second update on our national debt toll, check out the Debt Clock:

 

[CLICK HERE to review the, “U.S. National Debt Clock: Real Time” at USDebtClock.org.]

 

Planning for retirement poses the same long-term challenges, for both us as individuals and for the government. Many of us may have to reduce current spending as well as save aggressively and invest prudently to create our own retirement income. Likewise, the government has to find a way to fund and/or cut Social Security and Medicare benefits for the millions of baby boomers scheduled to retire over the next 20 years.

 

[CLICK HERE to read the article, “Testing Two Retirement ‘Truisms,’” at WealthManagement.com, March 8, 2012.]

 

[CLICK HERE to read the article, “Medicare Paid $5.1B For Poor Nursing Home Care,” at Modern Health Care, February 28, 2013.]

 

At this point, it may be smart to think of your personal savings and investment strategy as your primary source of retirement income, and Social Security benefits as supplementary. That’s the way the system was designed to work back in 1935 when President Roosevelt signed it into law, but it hasn’t really worked out that way. In recent decades, far too many people have been relying primarily on Social Security benefits for the bulk of their retirement income – particularly elderly women.

 

Over time, things change. Like the fact that most women now work and earn their own income and contribute to their own retirement plans. In fact, recent research indicates that women are rapidly closing the gap between the percentage of income they stash away for retirement when compared to men.

 

[CLICK HERE to read the article, “Men vs. Women: Who Wins at Retirement Savings?” at Bank Investment Marketing, March 7, 2013.]

 

The reason planning for retirement is so difficult is because few people can accurately predict how long they are going to live. You could live significantly longer than you might imagine – as evidenced by comedian George Burns, who smoked cigars for more than 70 years and still lived to age 100.

 

The question is how much income to draw from your retirement savings assets as a new retiree so as not to risk running out later. There are many products and strategies on the market these days that can help address this issue. If it’s one you’re pondering and would like to discuss further, we’d be happy to help you develop a strategy that’s appropriate for your goals and financial situation.

 

[CLICK HERE to read the article, “Say Goodbye to the 4% Rule at The Wall Street Journal,” March 1, 2013.]

 

By contacting us, you may be provided with information regarding the purchase of insurance products. While we believe this information to be reliable as of Mach 2013, we do not guarantee the accuracy or completeness of the information included. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s solution.

 

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

 

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.

Shortlink

Health Care Deductions

With all of the attention given to the new tax provisions passed in the American Taxpayer Relief Act of 2012, it may be tough to focus on last year’s laws in order to complete last year’s tax return. Whether you’re planning to complete your return by April 15 or file for an extension, don’t forget the deductions and credits available for 2012 – especially when it comes to medical expenses.

 

[CLICK HERE to read the article, “Deducting Medical Expenses: You can deduct uninsured health costs although the rules change in 2013,” at Nolo.com, 2013.]

 

[CLICK HERE to read, “Topic 502 – Medical and Dental Expenses,” at IRS.gov, February 4, 2013.]

 

With so many boomers caring for aging parents, you may be eligible to deduct some of those expenses. If Mom earned less than $3,800 in 2012 (in most cases, that income level excludes Social Security benefits) and you provided more than half of her financial support, you may be able to claim her as a dependent – with the accompanying dependent exemption. This is true even if she doesn’t live with you.

 

In fact, if you paid for any of her medical or nursing care expenses, as well as home medical equipment or improvements for wheelchair access, you also may be able to itemize your costs as qualified medical expenses. Your 2012 return is the last one in which you can itemize and deduct medical expenses that total more than 7.5 percent of your adjusted gross income – including out-of-pocket expenses for medical, dental or vision care. Starting in 2013, the threshold for itemizing medical expenses will be 10 percent.

 

[CLICK HERE to read the article, “Seven health tax tips,” at LifeHealthPro.com, March 8, 2013.]

 

[CLICK HERE to read the article, “Did You Make Medically Necessary Home Modifications?” at HouseLogic.com, December 21, 2012.]

 

Other deductible medical expenses include:

 

·         The standard mileage rate is 23 cents per mile of use of your car for medical purposes

·         Premiums for Medicare Part B, Part D (Prescription Drug) or a Medicare Supplemental plan that were deducted from your Social Security check may qualify as   deductible

 

[CLICK HERE to read the article, “Tax deductions for medical expenses,” at The Orange County Register, March 3, 2013.]

 

It’s a good idea to incorporate tax planning as part of your overall financial plan. If you’d like to discuss strategies you can employ today to help reduce your tax bill in the future, please give us a call.

 

Your financial professional is not permitted to offer, and no statement contained herein shall constitute tax, legal or accounting advice. Individuals should consult with a qualified professional regarding the applicability of this information to your situation. By contacting us you may be provided with information regarding the purchase of insurance products.

 

The information and opinions contained herein are provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

 

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.

Shortlink

Sequestration Frustration

When did the word “sequestration” first penetrate our mainstream American vocabulary? It’s generally used in a trial when the jury is sequestered so they can’t talk to anyone about the case.

 

Merriam-Webster’s dictionary has several definitions that don’t seem to apply to our budget’s current disposition, although it does say that, in law, sequestration is a writ authorizing a law-enforcement official to take custody of a defendant’s property in order to enforce a judgment.

 

Regardless of what we used to think it means, the word is on everybody’s radar now. In the days leading up to the March 1, deadline, the usual hype led to speculation about the automatic spending cuts and their impact on the country’s growth.

 

[CLICK HERE to read the article, “Sequester Q&A: For U.S., a new season of uncertainty,” at US News & World Report, February 21, 2013.]

 

[CLICK HERE to read the article, “Democrats Propose Tax Increases to Replace Spending Sequestration,” at Mondaq.com, February 25, 2013.]

 

The budget plan President Obama proposed in 2012 calls for reducing the value of itemized deductions and certain tax exclusions for taxpayers in higher than the 28 percent tax bracket. As for corporate taxes, he wants to close loopholes to effectively lower tax rates from 35 to 28 percent for most corporations; 25 percent for manufacturers.

 

While many liberal Democrats have dug their heels in the sand on entitlement spending cuts, the President has offered to reduce Medicare spending by $400 billion over 10 years, change an inflation formula for government benefits that would result in lower cost-of-living adjustments for Social Security and other programs, and reduce other spending for total reductions of $900 billion over 10 years.

 

[CLICK HERE to read the article, “Barack Obama still betting on big deal with odds against him,” at Yahoo Finance, March 1, 2013.]

 

Many pundits have pointed out that the implications of the automatic spending cuts will not be immediately evident. However, while the crisis may not be felt nationwide, it will be felt personally. Affected Americans include navy shipbuilder small business owners and workers whose defense budget contracts get cancelled. Additionally, custodians and security guards at the Capital will receive an immediate pay cut.

 

[CLICK HERE to read the press release, “4 myths about the spending cuts,” at CNNnews.com, March 1, 2013.]

 

[CLICK HERE to watch the video, “Busting Sequestration: It’s Much Ado About Nothing,” at Bloomberg, March 1, 2013.]

 

[CLICK HERE to read the article, “Why Long-term Debt Solutions Require a Break from Sequestered Thinking,” at Knowledge@Wharton, February 27, 2013.]

 

As we meander through this year with continued political and economic uncertainly, perhaps we can take a little more control back in our own lives. If you’ve been threatening sequestration cuts in your own household spending, perhaps it’s time to either make them happen or figure out how to get your assets working harder to earn more income. We’re here if you’d like some guidance to help you do that.

 

While we believe this information to be reliable as of March 2013, we do not guarantee the accuracy or completeness of the information included. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

 

By contacting us you may be provided with information regarding the purchase of insurance.

 

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

 

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.

Shortlink

Why Does Health Care Cost So Much?

Do you know what a routine venipuncture is? That’s a fancy way of saying a nurse drew blood from your arm. Do you know how much one 325mg acetaminophen tab might cost you in a hospital? That’s the generic version of a Tylenol pill, by the way, and just one will run you $1.50 at the MD Anderson Cancer Center in Houston.

 

If you’ve ever received a bill from a hospital before, you’re probably aware of the sticker shock. Even short stays as routine as childbirth can yield indecipherable bills and unbelievably high charges.

 

[CLICK HERE to read the article, “Why Medical Bills are Killing Us,” at Time Magazine, February 20, 2013.]

 

[CLICK HERE to read the press release, “Medical Bills Bankrupt Families With Children Who Are Mentally Ill,” at abcNews.com, February 18, 2013.]

 

Most of us who enjoy large group health insurance probably don’t even look at the bills. We check out the Explanation of Benefits (EOB) form that gets mailed to us by our insurer to find out how much of the bill will be covered how much we’re on the hook for. The richer the insurance coverage, the less we care how much the provider charges.

 

Perhaps the question about rising medical expenses shouldn’t be about who pays the bill, but rather why each service or prescription or piece of durable medical equipment costs so much?

 

[CLICK HERE to read, “Final reform-law insurance regs released,” at ModernHealthcare.com, February 22, 2013.]

 

[CLICK HERE to read, “High Medical Bills Driving Some Americans to Extreme Measures,” at US News & World Report, February 18, 2013.]

Because health care policies are so complex and the red tape you have to wade through to get answers is so onerous, we generally pay our bills and move along. Except for some people. You probably know of people who have called the billing office of a hospital or doctor and negotiated down the charges on their bill.

 

[CLICK HERE to read, “Choosing Wisely campaign expands list of questionable tests, procedures,” at ModernHealthcare.com, February 21, 2013.]

 

[CLICK HERE to read, “Cut Your Medical Bills by 30%,” at MSNMoney, January 25, 2013.]

 

It may make you wonder if medicine isn’t marketed like furniture. After all, doesn’t it seem like every weekend of the year a local furniture store advertises a deep-discount sale? It’s easy to imagine the store marks up its retail prices significantly enough to offer radical sales and still clear an immense profit.

 

Doesn’t it stand to reason that medical services do the same thing? Only instead of advertising a sale (e.g., “This week only: strep testing and antibiotics on sale at local pediatrician office”), perhaps providers offer lower prices only to those patients bold enough to call in and complain.

 

Changes are coming. With expenses spiraling out of control, something had to be done, so the government stepped in with its version of a solution. However, perhaps the solution starts with each of us. Ask more questions at the point of care about costs and alternatives, read our bills and pick up the phone to question what’s on them.

 

As always, we’re here to help you devise ways to plan for health care and other major financial expenditures in your life.

 

The information and opinion in the above articles are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. This information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

 

By contacting us you may be provided with information regarding the purchase of insurance products

Shortlink

The Toll of Education

Who knows what makes one child better able to grasp mathematical concepts than others? Is it genetic? Is it access to better education?

 

Most of us know people who inherently seem to “get it,” but it’s likely we know a lot more who struggle with math. Much like art or music, the math gene may well be a talent handed down the DNA pool in certain families.

 

Ultimately, how important is it that a child who excels in other academic areas – such as history or English – struggle with geometry and algebra in middle school to be eligible for a college preparatory track in high school?

 

[CLICK HERE to read the press release, “California Adopts Modified Math Standards to Restore Local Decision Making,” at the California Department of Education, January 16, 2013.]

 

Education is a hot topic these days, ranging in everything from school safety to above-inflation increases in college tuition and the resounding student debt crisis.

 

[CLICK HERE to read, “Beyond gun control: Will Obama’s plans make schools safer?” at The Christian Science Monitor, January 17, 2013.]

 

[CLICK HERE to view the video, “Chicago Program Aims to Close the Achievement Gap for Youngest Students,” at PBS, February 13, 2013.]

 

In his address to the nation in February, President Obama’s speech focused on points concerning the youngest and oldest students on the education spectrum. In it he made recommendations for universal pre-kindergarten access and improving the tuition/financial aid process for college students.

 

[CLICK HERE to read, “State of the Union Education Proposals Focus on Nation’s Youngest, Oldest Students,” at Huffington Post, February 12, 2013.]

 

[CLICK HERE to read, “The Vague Promise of Obama’s Ambitious Preschool Plan,” at New Republic, February 15, 2013.]

 

A recent blog post by the Financial Security Project of Boston College observes that the nature of today’s outstanding student debt may be influencing the formation of new family units – a phenomenon that has been attributed to a slower recovery in the housing market.

 

The article notes that while some men may be wary about whether to become seriously involved with a woman with massive debt, some women may be actively “removing themselves from the marriage market, or delaying marriage … until they can make a better-quality match.”

 

[CLICK HERE to read, “Women in Debt Less Likely to Marry,” at the Squared Away Blog of the Financial Security Project of Boston College, February 14, 2013.]

 

It just goes to show you how society and culture influences our lives and even the national and global economy in a trickle-down, domino effect that is not always obvious when you just see the tip of the iceberg.

 

[CLICK HERE to read, “Giving Children a Chance,” at The Lancet, February 16, 2013.]

 

If you’d like to discuss ways to enhance your children’s education and opportunities without seeing them burdened with debt, we’d be happy to help you with that.

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

Shortlink

Remodeling Your Finances

There are signs pointing to an invigorated residential real estate market in spring of 2013. Whether homeowners are gearing up to list their homes on the market or not, the signals are as evident as the crocus bulbs poking their heads out of the snow-riddled ground.

While spring-cleaning is a seasonal rite of passage, this year looks to take the phenomenon a bit further. People are remodeling their homes for two possible reasons. First, by taking advantage of what may be the tail end of low interest-rate refinancing, baby boomers can retrofit their houses in advance of retirement, including enhancements to help them “age in place.”

 

Second, other homeowners may be anxious to relocate for better job prospects or have been waiting to trade up – or down – depending on age and financial situation.

 

While many of the distressed homes we’ve read about for years have hit the market and caused real estate values to bottom, they’ve also been scooped up by investors and qualified buyers. The good news is that the inventory available for sale has dried up in many parts of the country, helping raise prices.

 

[CLICK HERE to read, “Home prices continue to rise; housing is now economic bright spot,” at NPR.org, January 29, 2013.]

[CLICK HERE to read, “Homes sell in two weeks with low supply for spring buyers,” at Bloomberg, February 5, 2013.]

[CLICK HERE to read, “Asking prices up in 86 of 100 largest markets,” at Inman News, February 5, 2013.]

 

Whether or not prices will continue to rise as more houses hit the market this spring remains to be seen. One issue homeowners are dealing with is whether they can get back the money they invest in upgrades. To this end, a couple of new resources are available to help homeowners determine the cost of upgrades versus the value they’ll receive on resale. These include ZillowDigs and Remodeling Magazine’s Cost vs. Value 2013 Report.

 

[CLICK HERE to read, “Remodeling the Kitchen? Crunch the Numbers First,” at CNNMoney.com, February 8, 2013.]

 

[CLICK HERE to read, “Remodeling Cost vs. Value Report 2013,” at Remodeling Magazine, 2013.]

 

[CLICK HERE to read, “Zillow Digs Provides Home Modeling Inspiration and Cost Estimates,” at the Washington Post, February 6, 2013.]

 

Some experts caution that investing in residential real estate should be considered a place to live, not a long-term money maker. Just recently, industry expert Robert Shiller warned investors against jumping into the market for the sake of a return on their money. While he admits the two homes he owns provide diversification for his portfolio, he hastens to add he bought them because they were the houses he – and his wife – wanted to live in.

 

[CLICK HERE to read, “Shiller Sees No Major Rally in the U.S. Housing Market,” at Bloomberg.com, February 6, 2013.]

 

Ultimately – buying, selling, remodeling, staying in place, aging in place – these decisions are all as personal as our career and family choices. What works best for you may not be a good move for your neighbor. We’re happy to help evaluate your financial situation and objectives to help you make the right decisions.

By contacting us, you may be offered insurance products for sale. The links provided above are from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.  They are for informational purposes only.

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. 

AE02130070

Shortlink

On Working Forever

Indifferent to signs of growth elsewhere in the economy, the unemployment rate has been stalled at around 7.9 percent since September. While pervasive layoffs appear to have tapered off, the general feeling seems to be that unless a company utterly and completely can’t function without another person, they’re not going to hire.

 

One job hunter (age 63) was quoted in the New York Times as saying, “There seems to be this tremendous fear of making a decision. A lot of my colleagues will go for 15, 20, 23 interviews with the same company.”

 

[CLICK HERE to read, “Job Growth Steady Amid Snags Holding Back Economy,” at the New York Times, February 1, 2013.]

 

[CLICK HERE to read, “Labor Force Statistics from the Current Population Survey,” at the Bureau of Labor Statistics, February 1, 2013.]

 

Given the current employment environment, even if people who don’t like their job – and in previous years would have long since gone looking for a new one – they probably should still keep their head down and hang in there.

 

On the other hand, longevity numbers tell us that whatever it is that we do for a living, many of us will be doing it for a long time. Well into our 60s and 70s, which used to be considered the golden years of retirement. That said, it’s also probably a good idea to like what you do.

[CLICK HERE to read, “Americans Rip Up Retirement Plans,” at the Wall Street Journal, January 31, 2013.]

[CLICK HERE to read, “Working Longer: Still the Best Path to a Better Retirement,” at US News & World Report, January 22, 2013.]

If you don’t love your work (or your current work situation), consider the experience you’ve gained and take a good look at your finances. People in their 50s may have previously thought they’d retire in 10 years or so. If you don’t think you’ll be able to retire in that timeframe anymore, consider that you may be looking at 20 or more years at your current job.

 

If the thought is unbearable, look at it another way. Twenty years is plenty of time to go back to school and get another degree, embark on a new career path, and/or get your own business off the ground.

[CLICK HERE to read, “Small-Business Job Growth Remains Modest,” at Entrepreneur.com, January 4, 2013.]

The reality is that today’s longer life spans can be both a blessing and a challenge. Many people will get more time to do whatever it is they want and can afford to do. It’s up to you whether you want to do more of the same, or try something new.

 

Whatever you choose, we’re to help you find ways to keep your retirement savings aligned with your goals. Give us a call.

 

By contacting us, you may be offered insurance products for sale.

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   

Shortlink

It Takes a Village

Baby boomers are giving new meaning to an established term. “It takes a village” – used in the title of Hillary Clinton’s 1996 book – comes from the African proverb “it takes a village to raise a child.” The idea behind the phrase is that people beyond the family unit have influence over a child’s well-being.

 

With 75 million baby boomers on the cusp of retirement, the phrase is being retooled. Now it pertains to the formation of networks and communities designed to provide aging seniors with the resources and connections they need to “age in place” (at home).

 

[CLICK HERE to read, “Village People: Community Networks Help Boomers ‘Age in Place’,” at Bloomberg, January 24, 2013.]

 

Villages are cropping up all over the United States. According to the Village to Village network, a website that lists contact information for villages nationwide, 93 villages are currently up and running with another 125 in development.

 

These membership-driven establishments charge an annual fee for access to volunteers and support services (including a vetted rolodex of plumbers, roofers, electricians, maids, handymen, etc.), and even planned social activities. The organizations also can serve as the local emergency contact for members if grown children and/or other family members live far away.

 

[CLICK HERE to visit the Village to Village Network website, 2013.]

 

Another way to plan for aging in place is to take advantage of a low interest rate loan to retrofit your home for senior living. Most people don’t even think about this until they suffer some type of debilitating accident or illness. Once it’s time to think about leaving the hospital, many people realize they won’t be able to climb stairs or step into a deep tub when they get home. That’s how a lot of seniors end up in a rehabilitation or assisted living facility.

 

You might as well find out ahead of time if it’s even possible to widen doors and hallways (for potential wheelchair use) and eliminate any raised step-ups inside your house. Even if you hadn’t considered it before, downsizing to a smaller, one-story residence may help your chances of being able to grow old at home in lieu of a facility.

 

[CLICK HERE to read, “Remodeling as Retirement Planning,” at Bloomberg, November 29, 2013.]

 

[CLICK HERE to view the video, “Are Communities Prepared for Aging?” at UC Berkeley’s Center for the Advanced Study of Aging Services, February 2, 2008.]

 

Deciding where to live – and what that might cost – is just as important as creating a plan for how you want to live in retirement. Please contact us to discuss the myriad of strategies available for a comprehensive retirement plan.

 

AE02130054

 

 

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. 

Shortlink

401(k) News

A recent survey by HelloWallet revealed that currently, workers age 40 to 49 comprise the largest group making withdrawals from their 401(k) plans. Are they using this money for retirement expenses, as intended? No. More than 50% have used the cash to pay current bills and debt; over 12% are paying for housing and 10% general expenses.[1]

 

This is not a good sign.

 

[CLICK HERE to read, “The 401(k) and Our Emergency Savings Problem” at Forbes, January 17, 2013.]

 

If depleting your 401(k) with early withdrawals for basic expenses (as opposed to a once-in-a-lifetime trip to Paris) isn’t bad enough, consider that your 401(k) investment may not be up to snuff. A recent blog by the Financial Security Project at Boston College published analysis of 401(k) funds – and the results were not encouraging: “The extra fees that investors pay for advice or the stock pickers who manage their mutual fund often don’t translate to better returns.” You can read more about the analysis here:

 

[CLICK HERE to read, “401(k) Funds Mediocre” at Squared Away Blog by the Financial Security Project at Boston College, January 15, 2013.]

 

Because of the increase in the number of people retiring, employers have made more efforts to enhance workers’ financial education. Some even include a projection of retirement income amounts based on the participant’s current account balance via their regular statements, much like Social Security offers a Personal Earnings and Benefits Statement based on work history to date.

 

The difference, however, is that Social Security bases its estimation on time already worked – which can’t be undone. A 401(k) income projection, however, is based on the participant’s current account balance. This can be inaccurate because you may need to withdraw prematurely from your account, or a downfall in market performance could take a bite out of your accumulated assets. Either way, it’s not always a good idea to consider your 401(k) “safe” money.

 

[CLICK HERE to read, “Misuse 401(k) retirement income statements and risk going broke,” at CBSMoneyWatch, January 18, 2013.]

 

One thing the new tax bill does is permit employers to amend 401(k), 403(b) and 457(b) plans to allow participants to convert pre-tax account balances to a Roth account option. Now, according to a survey conducted by Towers Watson last year, only 46% of employers even offered a Roth option in their 401(k) plans and, among them, 57% of those said less than 5% of participants had selected the option.[2]

 

If your 401(k) does provide this option, converting other options to a Roth means these assets – and whatever earnings they gain in the future – may be withdrawn tax free when you retire. However, be aware that such a conversion is a taxable event in the year it occurs because technically it’s considered a distribution, and it could push you into a higher tax bracket. Also note that although the new law became effective January 1, 2013, it allows for the conversion of balances accumulated before 2013. Be sure to consult with a qualified tax professional before making any decisions regarding your IRA.

 

[CLICK HERE to read, “New Law Expands ‘In-Plan’ Roth 401(k) Conversions,” at Mondaq, January 14, 2013.]

 

[CLICK HERE to read, “Time to Convert to a Roth 401(k)?” at The Wall Street Journal, January 4, 2013.]

 

If you’d like to discuss the current status of your 401(k) or other employer-sponsored plan and ways you might better position these assets for the future, please give us a call.

 

By contacting us, you may be provided with information regarding the purchase of insurance products.  Any transaction that involves a recommendation to liquidate funds held in a securities product, including those within an IRA, 401(K) or other retirement plan for the purchase of an annuity, can be conducted only by individuals currently affiliated with a properly registered broker/dealer or registered investment advisor.  If your financial professional does not hold the appropriate registration, please consult with your own broker/dealer representative or registered investment advisor for guidance on your securities holdings”.

   

The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.   




[1] HelloWallet.com, The Retirement Breach in Defined Contribution Plans,” January 2013; http://signup.hellowallet.com/retirementbreach.

[2] Towers Watson, “Today’s Plan for Tomorrow’s Retirees,” 2012; http://www.towerswatson.com/assets/pdf/8056/TowersWatson-DC-SponsorSvy-NA-2012.pdf.