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A Health Care Plan – For You

A survey released in late July found that one in three doctors say they will quit practicing medicine in the next decade. But not because they’ll retire. Reasons given included declining reimbursement, unprofitable practices, and the high cost of doing business.

According to the report, “this confluence of economic and regulatory pressures is driving some physicians to early retirement and others out of the medical profession altogether. Plus, it’s influencing the emerging generation of talent to avoid the debt and risks inherent in becoming doctors.”

[CLICK HERE to read the article, “A Tough Time for Physicians: 2012 Medical Practice & Attitude Report,” at Jackson Healthcare, July 25, 2012.]

Well, that’s going to make things really difficult. The number of adults age 65 and older is projected to soar by more than 75 percent by 2030 – to nearly one in five U.S. residents.[1] We all know that the good health we tend to enjoy in younger years will likely deteriorate as we get older, so it’s easy to imagine demand for health care providers will increase exponentially during this timeframe. And in an era when demand will ramp up more than any other time in history, supply will be leaving the profession in droves – with reduced potential for replacement players.

Furthermore, when demand is high and supply is low, prices generally increase. Just to give you an idea of where they stand right now, the Society of Actuaries estimates a couple, both age 65, will need $230,000 to cover the cost of acute medical care and Medicare in their lifetimes, which doesn’t include the cost of long-term care insurance (that could cover some of these projected costs).[2]

[CLICK HERE to read the article, “Boomers Need Health-Care Costs Reality Check,” at FoxBusiness.com, August 16, 2012.]

[CLICK HERE to read the article, “Stern Advice – Managing medical costs in retirement,” at Reuters, August 8, 2011.]

[CLICK HERE to read the new release, “Federal report details health, economic status of older Americans,” at National Institutes of Health, August 16, 2012.]

We might be living long but, unfortunately, living longer doesn’t necessarily mean living healthier. In fact, the more active you’ve been in your younger years, the more likely you’ll need a joint replacement in old age. The less active you’ve been in your younger years, however, you may have more health issues overall.

Currently only about 25% of American employees have considered a plan for health care expenses in retirement.[3] Because medical expenses tend to increase the older you get, developing a separate plan to cover them is an important consideration. This requires estimating your health care needs and costs in retirement and determining if you should purchase additional health care coverage (Medigap insurance) to help preserve your personal assets and retirement income.

Feel free to contact us to talk about your personal health care plan in retirement. We’d like to help ensure it doesn’t conflict with your retirement income plan.

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.


[1] Institute of Medicine, “The Mental Health and Substance Use Workforce for Older Adults,” July 2012.

[2] Society of Actuaries, “Securing Health Insurance for the Retirement Journey,” 2012.

[3] Sun Life Financial Unretirement Survey; “Flying Blind: How Working Americans View Healthcare Costs in Retirement,” May 24, 2011.

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What “Recovery” Feels Like

What “Recovery” Feels Like

Today’s headlines are dominated by the claims, promises, accusations and trash talk of our noble presidential candidates. Each says they’re fighting for the future of middle-class Americans, a category of citizens for whom neither can admit to being a card-carrying member.

But who is the middle class, anyway? Recent research and survey trends have unleashed some interesting findings. For example, since 2000 the middle class has shrunk in size, from 61% of the adult population in 1971 to 51% in 2011. Not surprisingly, there were increases in the upper economic tier (from 14% to 20%) and lower tier (from 25% to 29%) during the same time frame.1

1[CLICK HERE to read the news release, “The Lost Decade of the Middle Class,” at Pew Research Center, August 22, 2012.]

[CLICK HERE to read the article, “Middle Class Exit ‘Lost Decade’ With Little Hope: Pew Report,” at The Huffington Post, August 22, 2012.]

Even though the Great Recession officially ended three years ago, the middle class isn’t really feeling much recovery in terms of its income – or home equity for that matter. Sixty-two percent say they had to reduce household spending in the past year due to money issues, whereas at the height of the recession in 2008, only 53% reported cutting back.1

According to data from the Federal Reserve’s Survey of Consumer Finances, American’s median net worth fell 28% from 2001 to 2010, erasing two decades of gains. From 2007 to 2010 alone, the value of middle income family assets fell by 19%.1

 

Mature Middle Class

From 2001 to 2011, adults ages 65 and older fared best, or so it would seem. Their incomes are higher now than in 2001, but you could also attribute this to the fact that many 65+ folks are continuing to work, whereas before they could retire. 

And speaking of earning income, mature workers do not appear to be enjoying the increases their younger peers are getting. According to a new report from Sentier Research, the typical household income for people age 55 to 64 years old is almost 10% less in today’s dollars than it was three years ago – when the recovery officially began. Actually, in almost every demographic group nationwide, Americans are earning less today on average than they did in June 2009, despite our third year in recovery.

Perhaps we should reconsider what “recovery” really means.

[CLICK HERE to read the article, “Big Income Losses for Those Near Retirement,” at The New York Times, August 23, 2012.]
 

Who’s Getting Paid More?

A recent AOH Hewitt survey found that companies are spending less on base pay increases for all workers, opting instead to reward high-performing workers with larger bonuses. According to an AON Hewitt spokesperson, “It is unlikely that salary increases will reach pre-recession levels of 4% or higher any time soon.” Aon Hewitt projects base pay increases of 3% in 2013 for executives, salaried exempt and nonexempt workers.

However, some areas of the country are more likely to pay higher increases than the national average, including Denver, Austin, Dallas/Fort Worth, Detroit, San Diego, Houston and Kansas City. Cities expected to pay lower-than-average increases in 2013 include San Francisco, Chicago and Minneapolis/St. Paul.

[CLICK HERE to read the news release, “Aon Hewitt Survey Shows Marginal Rise in Salary Increases in 2012; Spending on Performance-Based Awards Remains Strong,” at Aon Hewitt, August 13, 2012.]

[CLICK HERE to read the Employment Cost Index news release for June; U.S. Bureau of Labor Statistics, July 31, 2012.]

As our “recovery” continues to amble along, you may feel more confident about the future by putting your savings on track for risk-managed growth opportunity – coupled with retirement income security – for the future. We’ve got strategies that can help you do that. Please give us a call.

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Making Homeownership Viable Again

There’s been discussion in recent years about renting being a better investment than buying a home. Analysts have emphasized that homeowners need to take the perspective that owning a home is more about quality of life than the road to riches. But that’s like saying don’t invest in stocks when prices are low, which is a very short-term view. We’ve been taught to buy low and sell high, and that means even when the real estate market takes a turn for the worse, we need to steel ourselves, hang in there and trust in the long-term return.

 

It appears the residential market is poised to reward us for that long-term view. Maybe it didn’t make sense to sell your house when prices were dropping, but buying was and continues to be a very good way to build equity for the future. And with mortgage rates still at record lows, homebuyers today can position themselves for some very high returns on their investment in the future.

 

[CLICK HERE to read the article, “Rent vs. Buy: What the Standard Indices Aren’t Telling You,” at Zillow Real Estate Research, August 1, 2012.]

 

Jobs to Increase Prices

While improvement on the unemployment front is slow and generally disappointing, there is some comfort in knowing that lower home prices are more influenced by this economic factor rather than pure demographics. With a massive population of baby boomers in or on the cusp of retirement, there’s been concern that overbuilding over the last 30 years to accommodate this population increase would result in mass vacancies as the generation diminishes. However, the recession has helped curbed housing starts and the formation of new households – creating pent-up demand that may well explode when jobs return.

 

Young college graduates have been forced to move back in with mom and dad, mid-career layoffs have turned elderly parents into landlords, and a proliferation of fixed-income seniors have moved in with their adult children. This constriction of new and previous household formations has lowered demand for housing, thus reducing prices further. Traditionally, the average number of households fluctuated based on demographics, but now we can take heart in knowing that the current excess supply of vacant homes is at least partially due to pent-up demand, and we won’t have to wait for demographics to catch up with supply.

 

[CLICK HERE to read the commentary, “Pent-up Housing Demand: The Household Formations That Didn’t Happen – Yet,” at HousingEconomics.com, February 2, 2011.]

 

New Rules Proposed for “Investment Statements”

You might call it your mortgage bill, but the Consumer Financial Protection Bureau (CFPB) wants your monthly mortgage statement to look and act more like an investment statement – so you can monitor and manage this asset more closely. A few rules recently proposed by the CFPB include:

 

·     Servicers would have to send regular bills to homeowners each billing cycle that spell out payments by principal, interest, fees and escrow; the amount of and due date of the next payment; and warnings about fees.

·     Servicers would have to alert homeowners with adjustable rate mortgages that their interest rates are about to change as early as 7 months before the changes kick in.

·     Servicers would have to credit homeowners’ mortgage accounts the day payment is received.

 

[CLICK HERE to read the article, “New rules aimed at helping homeowners,” at CNNMoney, August 10, 2012.]

 

Home ownership has long been considered not only a good investment, but also the key to building significant wealth over a lifetime. As you approach retirement, there are many ways you can position this investment asset to help secure your lifestyle. Please give us a call if you’d like to discuss these options.

 

 

 

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.

 

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.

 

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Midyear Recap

The commentaries are in – July brought with it a host of analysis about how the economy is doing so far this year.

 

According to Fidelity Investments, “The U.S. remains in a mid-cycle expansion and the corporate sector remains solid, but improvement has slowed, and global and policy risks dampened the overall outlook for riskier assets.” Its 2nd quarter report provides a market summary with analysis on the economy, policy risks, securities markets both domestic and abroad, and asset allocation themes in light of this being an election year.

 

[CLICK HERE to read, “Quarterly Market Update,” at Fidelity Investments, Second Quarter, 2012.]

 

If you want to see how the outcome of the presidential and congressional elections may impact the market and the economy, check out an in-depth perspective from LPL Financial Research. Among other observations, the firm’s 2012 Mid-Year Outlook states that, “We believe the impact of congressional elections may be more meaningful than the presidential one this year.”

 

[CLICK HERE to read the commentary, “Campaign 2012: What the Elections Hold for Investors,” at LPL Financial, Second Quarter, 2012.]

 

In its third quarter overview, UBS acknowledges that the “re-flaring of the eurozone sovereign debt crisis, continued policy uncertainty in the US, and the lagged effects of the monetary tightening cycle within the emerging markets are chiefly responsible for the current economic slowdown.” However, it cites the following reasons for optimism:

 

·         Lower energy prices are likely to start turning into a supportive force for growth.

·         Emerging markets policies are now accommodative; policymakers have greater latitude to ease policy; and further stimulus is likely in the months ahead.

·         The recovery in U.S. housing prices and the rebound in both existing home sales and housing starts suggest that residential real estate has shifted from being a headwind to a tailwind.

 

[CLICK HERE to read the commentary, “Investment Strategy Guide: I know what you did last summer,” from UBS Wealth Management Research, Third Quarter, 2012.]

 

Speaking of residential real estate, Zillow.com recently published a report emphatically stating that the US housing market has finally turned a corner. The Zillow Home Value Forecast estimates that 67 of the 156 markets it covers will experience an increase in home values over the next 12 months.

 

The report notes that, overall, national home values are back to January 2004 levels, having fallen 22.9% since their peak in May of 2007.

 

[CLICK HERE to read the article, “Home values rise for the first time in 5 years,” at CNNMoney, July 24, 2012.]

 

[CLICK HERE to read the commentary, “Housing Market Turns Corner; U.S. Home Values Post First Annual Increase in Nearly Five Years,” at Zillow Real Estate Research, July 23, 2012.]

 

[CLICK HERE to read the commentary, “U.S. housing market lays new foundation,” at The Globe and Mail, July 24, 2012.]

 

Despite lingering high unemployment and the risks associated with Europe’s financial crisis, there is little news in recent mid-year reports that would indicate the U.S. economy has altered from its slow but gradual course to recovery. Now might be a good time to take a look at your current situation to see if there are strategic moves you can make to help position your assets for longer-term growth – or protect them from a similar economic setback in the future. As always, give us a call if you’d like to discuss your situation.

 

 

If you are unable to access any of the news articles and sources through the links provided above, please contact us to request a copy of the desired reference.

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.

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Banks: Too Big to Break Up?

After the Great Depression, Congress passed the Banking Act of 1933, which included banking reforms such as the Glass-Steagall Act (named for its Congressional sponsors, Senator Carter Glass (D) of Virginia and Representative Henry B. Steagall (D) of Alabama). That Act was designed to limit the activities and affiliations commercial banks could engage in with securities and securities firms. In 1999, those restrictions were repealed via the Gramm-Leach-Bliley Act under President Clinton.

And here we are today. Since the subprime mortgage crisis that launched the country into economic recession, debates abound regarding the wisdom of limiting the size and security-based risks in which banks are allowed to engage.

 

Jumping into the fray just recently is former Citibank CEO Sandy Weil, whose resume includes acquiring insurance companies, retail brokerages, and investment banks and merging them into the behemoth empire known as Citigroup. He claims to have been instrumental in lobbying for the repeal of the Glass-Steagall Act. To the surprise of the banking industry, Weil went on CNBC’s “Squawk Box” recently to call for the return of Glass-Steagall-like reforms:

 

“What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail.”

 

[CLICK HERE to watch video of Sandy Weill, “Wall Street Legend Sandy Weill: Break Up Big Banks,” at CNBC.com, July 25, 2012.]

 

[CLICK HERE to read the article, “Insight: Banks bristle at breakup call from Sandy Weill,” at Reuters, July 27, 2012.]

 

Good Service Isn’t Profitable
Since receiving bailout money from the federal government during the height of the “Great Recession,” banks have built up strong balance sheets and appear to be fully recovered. In fact, they appear to now be so strong that customer experience isn’t exactly a priority.

Time quotes an industry analyst who observed, “There’s no evidence in the US banking system that offering a labor-intensive personalized service is successful in terms of letting the banking institutions survive. It’s very costly with virtually no benefit.”

 

With the electronic age, technology enables banks to offer faster, more convenient – but less personal – service. And it saves them money, since ATM machines don’t take sick days, ask for raises, or need health insurance.

 

Electronic ties also make it difficult for customers to switch banks thanks to direct deposit, automatic draft payments, and elaborate bill pay systems. A new Consumer’s Union survey reveals that while nearly one in every five customers has considered changing banks in the last year, nearly half of them don’t because it’s too much trouble.

 

[CLICK HERE to read the article, “Uh Oh: Bad Customer Service Is Good For Bank,” at Time, July 26, 2012.]

 

[CLICK HERE to read the news release, “Survey Highlights Top Impediments to Switching and Reforms That Would Make Consumers More Likely To Move Their Money,” at ConsumersUnion.com, July 24, 2012.]

 

The progress of banks and their relationships to consumers, Wall Street and politicians will continue to rule headlines – at least until the economy has officially turned the corner. If you’d like to discuss how developments in this industry may impact your financial picture, please contact us.


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.

 

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Does Student Loan Debt Make You Smart?

It used to be that garden-variety wisdom behooved you to go to college to make something of yourself. These days, with around $1 trillion in outstanding student loan balances nationwide ($150 billion in private student loan debt), many are questioning that wisdom.

 

According to finaid.org, the average college student’s debt is more than $18,000, but many carry loans well over $50,000. The biggest shame of it all is that in this economic environment, young adults are coming out of college and having to work the same sort of temporary or transitional jobs they’ve worked for years – food and beverage, retail, lifeguarding, valets, etc. They’re lucky if they can find an unpaid internship to gain “real world” work experience while paying the bills by bussing tables. Many have little opportunity to make a dent in student loan debt, and each year the competition for jobs grows denser.

 

[CLICK HERE to read the blog post, “College Loans: A Punitive System?” at Boston College, Center for Retirement Research, June 5, 2012.]

[CLICK HERE to read a report from the Consumer Financial Protection Bureau and the US Department of Education titled, “Private Student
Loans,”at ConsumerFinance.gov, July 20, 2012.

[CLICK HERE to read the article, “Private student loan debt reaches $150 billion,” at Yahoo Finance, July 20, 2012.]

 

Subprime Student Loans

Much like the American dream of owning your own home, the student loan industry relaxed qualifying criteria and actively marketed and approved loans to people who did not have a credit history for paying back loans. Exploiting parental claims that you can’t get a good job without an education, lenders used Asset-Backed Securities (ABS) to finance student loans because they were more profitable, giving them incentive to increase loan volumes regardless of creditworthiness.

[CLICK HERE to read the article, “How the Student Private Loan Industry Resembles the Subprime Mortgage Market,” at ThinkProgress.com, July 20, 2012.]

Government Intervention

Similar to the subprime crisis, where private lenders may have faltered, the federal government has taken measures to try to provide relief. In recent years, the government has launched the income-based repayment program to allow debt-laden graduates to repay federal student loans based on their level of income. After a certain time period, any remaining balance would be forgiven (note that forgiven balances may be considered income on which taxes are owed).

 

Furthermore, Congress recently extended the current 3.4% interest rate on federally subsidized student loans just prior to the July 1 expiration date, when the rate was scheduled to double. The extension is only for one year, however, so this issue is likely to rear its ugly head in the first two quarters of 2013. 

[CLICK HERE to read the article, “Uncle Sam’s Income-Based Student Loan Repayment Plan,” at Nightly Business Report, July 19, 2012.

[CLICK HERE to read the article, “Congress extends low student loan rates,” at CNNMoney.com, June 29, 2012.

Not a Generational Issue

If you think student loan debt is a problem just for the young, think again. Nearly one-third of the total student loan debt is carried by people over age 40 – still paying down loans from their college years. On top of that statistic, loans to parents to fund their kids’ education is among the fastest-growing of the government’s education loan programs. Imagine – paying your child’s college student loans while still paying down your own.

 

Many middle-aged adults went back to school after losing their jobs during the latest economic crisis in an effort to beef up their resumes in light of ageism and the other challenges that come with seeking a new job mid-career. Taking on more student loan debt while unemployed (or under-employed) and losing value in your home equity is equally daunting.

[CLICK HERE to read the article, “Student Debt Hits The Middle-Aged,” at The Wall Street Journal, July 17, 2012.]

 

The best way to tackle student loan debt is to plan early and save/invest regularly. But even if you’ve waited late to start a plan for financial health, you may have assets that can be positioned to help pay for college. Don’t hesitate to call us to review your situation and discuss strategies.

 

   

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 Medicaid Extension Debate

Since the Supreme Court published its decisions regarding the constitutionality of the Affordable Care Act, there’s been far more discussion over the option to reject the Medicare expansion plan than the mandate that all Americans must purchase health insurance.

 

For Republicans, the option to reject federal aid offers a glimmer of hope that there’s still time to overturn the health care legislation, and many have reiterated this stance.

 

[CLICK HERE to read the full Supreme Court opinion, at SupremeCourt.gov, 2011/2012.]

 

[CLICK HERE to read a letter from Kathleen Sebelius, Secretary of the Department of Health and Human Services, to state Governors at npr.org, July 10, 2012.]

 

In Texas, Governor Rick Perry has joined at least 14 other states in saying he will reject federal aid to extend Medicare to non-elderly recipients in his state. Like many other Republican-dominated states, he opposes what he views as the socialization movement of the health care reform law and argues that such reforms are too costly and will devastate the state’s budget.

 

[CLICK HERE to read the article, “Fifteen governors reject or leaning against expanded Medicaid program,” at thehill.com, July 3, 2012.]

 

[CLICK HERE to read the article, “Gov. Perry tells feds Texas won’t expand Medicaid,” at The Houston Chronicle, July 10, 2012.]

 

[CLICK HERE to read “Medicaid expansion is a bad deal for Georgians,” at The Atlanta Journal-Constitution, July 12, 2012.]

 

On the other side of the coin, supporters like Patricia Young Brown, president and CEO of Central Health of the Travis County hospital district in Texas, say expanding Medicaid and implementing other reforms mandated by the new legislation will help save the state money in the long run. “You can pay a dollar now to keep someone as healthy as possible … or you’re going to pay for it later when they’re sick,” observes Brown.

 

[CLICK HERE to read the article, “Not joining Medicaid expansion will hurt hospitals, clinics and taxpayers, officials say,” at statesman.com, July 10, 2012.]

[CLICK HERE to read the article, “How the Medicaid expansion could actually save states money,” at WashingtonPost.com, July 5, 2012.]

 

Whether Medicaid is extended in your state or not, the ruling to uphold the individual insurance mandate (subject to a penalty “tax” for non-compliance) means that the Patient Protection and Affordability Care Act will achieve at least part of its funding objectives and will likely move forward. While there’s still the possibility that it could be overturned by Congress should Republicans take over the presidential administration, many health care industry experts observe that the sands of change are already in motion and reforms underway within the industry itself are not likely to reverse.

 

Regardless of where you stand on the political forum, it’s never a good idea to depend solely on government programs to provide for your wellbeing in the future – particularly with something as important as your personal health care. Please contact us to discuss strategies for positioning your assets for flexible options that can include a plan for your health care needs in retirement.

 

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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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Female Influence

Traditionally, we’d hear about the “woman behind the man.” But these days, women seem to be emerging more front and center as we read daily news about their roles in consumer spending, corporate boardrooms, driving economic expansion as small business owners, and as major players in this year’s presidential election.

Corporate America

In 2008, Paul Bulcke took over the job of CEO global food giant Nestle. At that time, despite the fact that 80% of the company’s consumers were women, only 3% of managers in the company’s leadership pipeline were women. One of Bulcke’s top priorities when he took over was to put the issue of women and gender at the top of his Executive Committee’s agenda. In his own personal view, Bulcke felt that it was important for “women stay women” instead of the usual practice that for women to succeed in business they had to become tougher than men. During his tenure, the percentage of women on management teams increased from 15 to 21%, including women heading two of Nestlé’s five global Strategic Business Units and a female CFO at the corporate level.

Why would a CEO make such strides to increase women’s roles in management? In the case of Nestle, it was less about politically correct mandates and more about good business for a company that markets primarily to women. In addition to their intimate understanding of the products and target market, women tend to have inherent traits that make them valuable in the corporate environment: they aren’t afraid to ask for help, they tend to be great at building relationships, and they are skilled multi-taskers.

[CLICK HERE to read the article, “Gender in the Multi-Cultural Corporation,” at Harvard Business Review, June 22, 2012.]

Entrepreneurs

Women have been starting businesses at a higher rate than men for the last 20 years and these days more and more are quitting their jobs to become entrepreneurs – which may not be reflected in recent unemployment numbers. While women-owned businesses created only 16% of total U.S. jobs that existed in 2010, it is projected that they will create over half of the 9.72 million new small-business jobs expected to be created by 2018.1 Some of the reasons women are leaving the security of a job in today’s uncertain employment market have to do with job dissatisfaction, a poor value structure, and lack of work/life balance. The Guardian Life Index cites “office politics” as a driving factor for women leaving Corporate America to start their own businesses.1

1 [CLICK HERE to read the article, “Entrepreneurship is the New Women’s Movement,” at Forbes, June 8, 2012.]

[CLICK HERE to read the article, “Why Women Still Can’t Have It All,” at The Atlantic, July/August 2012.]

Politics

Meanwhile, women continue to wield influence in politics whether running for office, positioning for running mates or being wooed for their vote in this year’s upcoming presidential election. In fact, more women have been running for positions in the Senate this year than ever before.

[CLICK HERE to read the article, “Romney, Obama: When Wooing Female Voters, Check Marital Status First,” at NPR, June 13, 2012.]

[CLICK HERE to read the article, “Mitt Romney’s wife, Ann: Woman being eyed for ticket,” at Newsday, July 5, 2012.]

The influence of women – whether in major corporations, small businesses, government agencies or in the home – offers inarguably a different approach to solving problems and may well be one that can have a positive impact on this country’s recovery going forward. That’s just one reason why it’s important for women to be involved in professional consultations regarding finances – whether single or married. Please contact us to schedule a time to review your personal situation.

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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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Health Insurance for All

The much-awaited ruling finally came as the Supreme Court determined that the Patient Protection and Affordable Care Act (PPACA) is for the most part  constitutional. The biggest question was whether or not the federal government could mandate legislation requiring that all Americans purchase health insurance. It can’t, of course, but what was ruled constitutional is that Congress can levy a tax on those who don’t.

The ruling was so long in coming that nearly every pundit out there has already offered its “what if” scenario depending on which way the upper court ruled. However, post-ruling, there are a few insights worth noting from journalists, experts, and health industry players.

[CLICK HERE to read the article, “Supreme Court Upholds Health Care Law, 5-4, in Victory for Obama” at The New York Times, June 28, 2012.]

[CLICK HERE to read the full document of the Supreme Court’s opinion at its website, June 28, 2012.]

What Now?

The Kaiser Family Foundation offers a good overview of the nuts and bolts of what will happen now that a decision has been rendered and the dust has settled. For example, if a person chooses not to buy health insurance, what is the fine he must pay? According to Kaiser, starting in 2014 the penalty would start at $95 a year, or up to 1% of income, whichever is greater, and rise to $695, or 2.5% of income, by 2016.

[CLICK HERE to read, “After the Ruling: A Consumer’s Guide,” at KaiserHealthNews.org, June 28, 2012.]

Medicaid Provision

One caveat the Court did not rule in favor on is that the federal government may not withdraw existing federal Medicaid funds to states that refuse to expand their Medicaid programs pursuant to the health reform act. However, at the American Hospital Association’s blog, litigator Dominic Perella notes that the Court did not address the fact that the federal government can still punish states by withholding other PPACA-based funds if they decline to participate. Those funds, after all, are not “existing” funds.

[CLICK HERE to read the article, “The Health Care Ruling – Big Takeaways and New Questions,” at the American Hospital Association Health Care Reform Law blog, June 28, 2012.]

Investors Mixed

The New York Times summarized the impact of the ruling as it may influence investors, observing that, “Hospitals will gain millions of paying customers. Insurers, by contrast, could face crimped profits from restrictive rules. Medical device and pharmaceutical companies will bear new taxes and other higher payouts, but they were already expecting such costs.”

Consequently – at least on the day the ruling came down – the price of shares of hospital stocks raced up, that of health insurers dropped, and some medical device and pharmaceutical stocks experienced slight declines.

Looking forward, the ruling is generally considered a plus for health insurance companies. If the individual mandate had been over-ruled, they would have been expected to uphold the law’s provision that they must insure people with pre-existing conditions, but would not have the expected revenues from new participants (resulting from the mandate) to help defray those costs. The law basically implies growth for health insurers. And when you consider that many people who do not currently choose to purchase health insurance do so because they are basically healthy (such as young adults), the mandate adds assets to the insurance pool with low risk liability of paying claims by new entrants.

[CLICK HERE to read the article, “In Health Care Ruling, Investors See Mixed Blessing” at The New York Times, June 28, 2012.]

For many, the Supreme Court ruling is good news, but for others it signifies further federal government intervention and spending. Whichever side of the fencepost you stand on, it’s a good idea to prepare for your own financial independence – including a long-term plan to pay for health care expenses – as well as possible. We have ideas and options to help you do this.

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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Organic Growth

We often read about how large American corporations have done such a great job of cutting back expenses and strengthening their balance sheets. And yet, our economy continues to languish. Many attribute this lack of growth to unemployment and unwillingness of corporations to open their pocketbooks and invest in growth, for fear of the financial crisis in Europe and our own “fiscal cliff.” In short, fear and perhaps a lack of ideas on where to go from here are holding us back. After all, no track offers a guarantee of success.

The latest quarterly earnings reports reveal that corporate profits rose for the 10th consecutive quarter.1  But as a recent article at Harvard Business Review points out, a lot of the net profit in recent years has come from reduced operating costs. According to the article, “CEOs can’t rely on cost-cutting to keep their profit momentum going – it’s gone about as far as it can at most companies.”

The author proposes ways companies can jumpstart real organic growth – as opposed to acquisition growth – into their balance sheets. One recommendation is to pursue a targeted strategy instead of throwing money at every new initiative. The result should not just be a greater ROI (return on investment) but ROE – a greater return on effort.

1[CLICK HERE to read the article, “Getting Back to Growth” at Harvard Business Review, June 22, 2012.]

Hiring

Peter Cappelli, a professor at Wharton, recently published a book on hiring issues titled, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It. Cappelli addresses the claims that companies have jobs available but that there’s a severe lack of talent available and America’s universities are rolling out a new generation of unqualified candidates.

Do you remember your first job? Was there much you learned in college that honestly prepared you or contributed to your ongoing success? I remember grads who didn’t know how to work a copy machine (although fixing them seems to be the real skill).

Cappelli slaps down these claims with some aggressive observations. For example, to the claim that companies want experience but say they can’t find qualified people who will accept the salaries offered he responds, “Don’t call it a skills gap – you’re just being cheap.” This explains why older workers can’t get jobs (at their previous salaries) and younger workers (with no experience) can’t get in the door.

He also criticizes the “gutting” of HR departments and lack of human judgment in finding candidates. Due to the ramp-up in resumes received, automation is necessary. However, some savvy applicants have learned to “game” the automation system, getting their resumes pushed up the pike while other, less-savvy but more qualified applicants are weeded out. Cappelli observes, “Is that really who you want to be hiring? People who can game the system? I suppose it tells you something about people, but it doesn’t tell you much about who has the requisite skills.”

He’s got an interesting take on why unemployment numbers aren’t improving, with suggestions to bridge the hiring gap. Cappelli says the first thing companies should do is determine the cost of keeping a job vacancy open while searching for the perfect candidate.

[CLICK HERE to read the article, “Why Good People Can’t Get Jobs” at Knowledge@Wharton, June 22, 2012.]

Marketing

In addition to job growth, there are multiple forward-thinking issues America’s companies must face to drive organic growth. In a recent article he penned for the BBC, the CEO of Coca-Cola put forth five “mega trends” that will influence market demand in the future. The list is below; note that most of these trends are already highly prevalent – it’s just that they will become massively prevalent in a few short years.

      1.      Mass urbanization – requiring the modernization of infrastructure and supply delivery logistics

2.      The aging demographic – baby boomers drive mass demand (as usual)

3.      The global middle class – largely comprised of emerging market countries

4.      Consumer domination – social media gives consumers a voice in how we conduct business

5.      Green issues – sustainability will no longer be a nice-to-have, it will be expected/assumed

[CLICK HERE to read the article, “The five consumer mega trends shaping tomorrow’s customers,” at the BBC, June 21, 2012.]

As we all know from Darwin’s theory of evolution, the strongest will survive. It’s up to our corporations to figure out the best way to meet the demands of consumers and grow organically – while at the same time benefiting our country with domestic jobs and innovation. It’s up to the rest of us to figure out which companies are poised to do that best. Please contact us if you’d like some help 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.

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