Shortlink

Opposites Attract: Couple Finances

It’s very common for a married couple to have vastly different financial personalities. One may be frugal and the other a big spender. As we all know, money can be the source of some pretty big challenges in a relationship. 

In fact, a recent survey revealed that 73 percent of couples said their financial approach differed from their partner’s. Thirty percent of couples argue over finances at least once a month, and 5 percent admit to having their own individual account that their other half doesn’t know about.1 

While you could say arguing is just another form of communication, there may be better ways of conveying money matters in a relationship. For example, many couples set a maximum amount that each partner feels he or she can spend without consulting the other. This survey discovered the average sum is $400. However, that amount is lower with millennial couples ($100) and higher among baby boomers ($500). Interestingly, 21 percent of couples don’t know how much their significant other has in his or her personal retirement account, such as an employer 401(k).2 

Traditionally, employers have provided the means for retirement income or savings vehicles but not offered much guidance in preparing for retirement. While more are making a concerted effort to help workers understand how much income they’ll need during retirement through various tools and resources,3 it’s important to work with your financial professional to build a retirement income strategy tailored specifically to your household’s needs and objectives. 

If you and your significant other haven’t really thought about your different approach to finances, an assessment might help alleviate some stressful situations where money is concerned. While it’s not an exact science, you also may consider taking any of the many free online quizzes to see how the two of you differ in regard to your financial personality.4 

Older couples may be less prone to argue about how to spend their money, but that doesn’t mean they’re any more compatible in their financial personalities or that they experience any less money-related anxiety. It often means they’ve settled into their respective roles and let the status quo take its course. However, it’s important to discuss upcoming events such as when to retire, where to live and how much money may be needed to maintain their lifestyle in retirement.5 

However, couples shouldn’t be so focused on retirement finances that they don’t account for the possibility of new adventures. One of the first determinations is to ask yourself — how do you want to spend your retirement? Where do you want to live or travel?6 What sort of activities will you want to pursue? Are there any big-ticket items, such as starting a new business venture? All of these questions help you determine the amount of income you’ll need, so it’s a good place to start.7 

Content prepared by Kara Stefan Communications. 

1 Suzanne Woolley. Bloomberg. Sept. 21, 2016. “The Secret to a Good Marriage Might Be Keeping Small Financial Secrets.” http://www.bloomberg.com/news/articles/2016-09-21/the-secret-to-a-good-marriage-might-be-keeping-small-financial-secrets. Accessed Sept. 30, 2016.
2 Ibid.
3 Aon Hewitt. 2016. “2016 Hot Topics in Retirement and Financial Well Being.” http://www.aon.com/attachments/human-capital-consulting/2016-hot-topics-retirement-financial-wellbeing-report.pdf. Accessed Sept. 30, 2016.
4 Maggie McGrath. Forbes. March 4, 2016. “Myers-Briggs Your Wallet: Learning Your Financial Personality Could Be the Key to Fixing Your Money Woes.” http://www.forbes.com/sites/maggiemcgrath/2016/03/04/myers-briggs-your-wallet-learning-your-financial-personality-could-be-the-key-to-fixing-your-money-woes/print/. Accessed Sept. 23, 2016.
5 Eleanor Laise. Kiplinger. May 2016. “Older Couples Face Money Battles.” http://www.kiplinger.com/article/retirement/T037-C000-S004-older-couples-face-money-battles.html. Accessed Sept. 23, 2016.
6 Jane Bennet Clark. Kiplinger’s Personal Finance. September 2016. “How Couples Can Retire in Harmony.” http://www.kiplinger.com/article/retirement/T047-C022-S002-how-couples-can-retire-in-harmony.html?rss_source=rss. Accessed Sept. 30, 2016.
7 John Wasik. The New York Times. April 22, 2016. “Thinking Beyond Money in Retirement.” http://www.nytimes.com/2016/04/23/your-money/thinking-beyond-money-in-retirement.html. Accessed Sept. 30, 2016. 

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. 

 

AE10165138B

Shortlink

Being Wise in a Smart World

These days, it seems like everything’s getting smarter. Smart phones, smart cars, smart appliances, smart technology. 

Maybe we take things like this for granted, but you can start typing any phrase into Google, and the computer will finish it for you. That’s pretty darn smart. 

Unfortunately, our increasingly smart world creates a host of new problems that accompany all the advantages. For example, these innovations are more vulnerable to security and privacy hacking1 and could be more costly to maintain and repair. 

After all, who do you call when you can’t turn off your smart oven remotely with your cellphone? Your cellphone carrier, internet provider or an appliance repair company?

In New York City, they’ve launched smart sidewalks — kiosks where passers-by can charge their phones or look up information on a tablet with internet access.2 But like many new innovations, there are unintended consequences, like people blasting music from the computer at all hours and even looking up inappropriate content at city intersections.3 

Unfortunately, even members of the younger generation who have grown up with smart technology, are graduating college and finding it difficult to land jobs that utilize all this smart technology. Some have lamented that recent graduates lack the knowledge and skills they need to land a job and succeed at their new careers.4 

You would hope some things, like your oven and your cellphone, wouldn’t require professional assistance. Your finances, however, may be another matter. As a financial professional, we are here to help you create a retirement income strategy through the use of insurance products that will help you work toward your long-term retirement goals. 

Content prepared by Kara Stefan Communications. 

1 Amanda Razani. Readwrite. July 14, 2016. “IoT and problems: The issues that bedevil any new tech.” http://readwrite.com/2016/07/14/iot-and-problems-the-concerns-that-arise-with-iot-pt2/. Accessed Sept. 23, 2016.
2 Amanda Razani. Readwrite. July 20, 2016. “New York’s sidewalks get a smart upgrade.” http://readwrite.com/2016/07/20/new-yorks-sidewalks-get-a-smart-upgrade-ct4/. Accessed Sept. 23, 2016.
3 Joshua Brustein. Bloomberg. Sept. 14, 2016. “Building a Smart City? Have You Thought About Porn and Privacy?” http://www.bloomberg.com/news/articles/2016-09-15/building-a-smart-city-have-you-thought-about-porn-and-privacy. Accessed Sept. 23, 2016.
4 Karsten Strauss. Forbes. May 17, 2016. “These Are The Skills Bosses Say New College Grads Do Not Have.” http://www.forbes.com/sites/karstenstrauss/2016/05/17/these-are-the-skills-bosses-say-new-college-grads-do-not-have/#c6ac420596eb. Accessed Oct. 25, 2016. 

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.

 

AE10165133B

Shortlink

Jobs After Age 55

The good news is 62- to 64-year-olds experienced the largest increase in jobs between 2007 and 2014.1 The not-so-good news is that many of those jobs are not of the upscale, high-paying variety.2 

New research from the Center for Retirement Research at Boston College offers insights into the type of work that older people are securing today:3  

·     -    The jobs are high on service and low on physical labor

·     -    Service jobs: managers, sales supervisors, accountants, real estate sales, property management

·     -    Low-skilled jobs: truck drivers, janitors, nursing aides, child care, retail, cab driver

·     -    Valued skillsets: dependability, outdoor work

·     -    Jobs that pay around 10 percent less than those of younger workers

A survey of households and individuals from the latest census found that, between 2008 and 2012, older workers (62+) with a college degree had less than a 50 percent chance of finding work, while those without a college degree had only a 35 percent chance.4 

During an economic downturn, it’s not uncommon for employers to lay off employees, and many older workers end up getting more pink slips than others. One reason may be because they tend to earn more, so some workplaces may be inclined to hire younger, lower-paid employees to improve profit margins.5 

While this may sound like age discrimination, lawsuits along those lines have become harder to win. In 2009, a court ruling made it more difficult for workers to sue for age discrimination. Plaintiffs must now prove that advanced age was the main reason for being let go — not just a contributing factor.6 

Even aging workers who continue working at the same company will likely find their income doesn’t increase as much as it did when they were younger. A 2015 Federal Reserve study found that, from ages 45 to 55, wages decrease by 9 percent; they then drop another 9 percent from ages 55 to 65.7 

The job situation may be more challenging for women, in part because they tend to live longer than their husbands and are therefore more likely to spend some part of their retirement living on one income. According to U.S. Labor Department projections, about one in seven women work past age 65, and within eight years that number will rise to nearly one in five.8 

Working longer isn’t all bad, from a financial or social standpoint. It enables people to save longer, give their retirement assets more opportunity to accumulate, decreases how long they’ll have to live on their retirement savings and enables them to save money via employer-based health insurance.9 Plus, work provides cognitive and social engagement, which for many is a lot more fun than sitting at home or even traveling alone. 

Content prepared by Kara Stefan Communications. 

1 Quoctrung Bui. The New York Times. Aug. 18, 2016. “More Older People Are Finding Work, but What Kind?” http://www.nytimes.com/2016/08/18/upshot/as-more-older-people-seek-work-they-are-put-into-old-person-jobs.html?_r=0. Accessed Sept. 19, 2016.
2 Ibid.
3 Ibid.
4 Ibid.
5 Bob Sullivan. CNBC. July 7, 2016. “For older workers, getting a new job is a crapshoot.” http://www.cnbc.com/2016/07/07/for-older-workers-getting-a-new-job-is-a-crapshoot.html. Accessed Sept. 19, 2016.
6 Ibid.
7 Teresa Ghilarducci. PBS. Jan. 14, 2016. “Why women over 50 can’t find jobs.” http://www.pbs.org/newshour/making-sense/women-over-50-face-cant-find-jobs/. Accessed Sept. 19, 2016.
8 Nick Timiraos. The Wall Street Journal. Feb. 22, 2016. “How Older Women Are Reshaping U.S. Job Market.” http://www.wsj.com/articles/older-women-reshape-u-s-job-market-1456192536. Accessed Sept. 19, 2016.9 Kerry Han
non. Forbes. July 3, 2016. “5 Tips To Help Women Work Longer.”
http://www.forbes.com/sites/nextavenue/2016/07/03/5-tips-to-help-women-work-longer/#74c7bf943156. Accessed Sept. 19, 2016.

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.  

AE09165131B

Shortlink

LTC Considerations

Long-term care insurance (LTC) has experienced some growing pains in recent years. Sustained low interest rates and coverage limitations have made it difficult for some to find policies that meet their needs.1 

As a result, many LTC insurers have exited the business because they couldn’t make a profit.Today, there are only 14 carriers still writing stand-alone LTC policies in the United States, and only about 8 percent of U.S. adults own this type of insurance.2 

As a general rule, LTC benefits are triggered when a policyholder can no longer perform two of six designated “activities of daily living” (ADLs) due to physical or cognitive impairments, or if he or she requires substantial supervision due to a severe cognitive impairment, such as Alzheimer’s disease. 3 

The six ADLs are: eating, bathing, dressing, the ability to move from bed to chair, continence and using the toilet independently.4 Some individuals may experience mobility issues that require help bathing and dressing, yet cognitively they remain sharp and otherwise healthy for many years. 

Of all people age 65 and older, 75 percent will eventually need long-term care, and mental disorders, such as Alzheimer’s, account for half of all LTC claim dollars paid.5 

The LTC industry has changed substantially over the past decade. With lifespans extending longer than ever, many carriers have altered policies to incorporate benefit restrictions. As a result of some contracts being held longer than expected, some of the companies that still offer LTC policies have had to raise premiums and reduce benefits.6 

In addition to stand-alone policies, there are also life insurance and annuity contracts with long-term care benefit riders. These riders are generally optional and available at an additional cost. Options may vary by insurance company and product. They may also be subject to eligibility requirements and may not be available in all states.   

Content prepared by Kara Stefan Communications. 

1 Allison Bell. LifeHealthPro. Sept. 7, 2016. “5 ways Genworth wants to reboot LTCI.” http://www.lifehealthpro.com/2016/09/07/5-ways-genworth-wants-to-reboot-ltci. Accessed Sept. 9, 2016.
2 Ibid.
3 The Federal Long Term Care Insurance Program. “Qualifying for Benefits.” https://www.ltcfeds.com/programdetails/qualifyingbenefits.html. Accessed Oct. 6, 2016.
4 Ibid.
5 LTC Tree. Aug. 15, 2016. “Long Term Care Statistics.” https://www.ltctree.com/long-term-care-statistics/. Accessed Oct. 13, 2016.
6 Wade Pfau. Forbes. Jan. 19, 2016. “Potential Concerns and Risks for Traditional Long-Term Care Insurance.” http://www.forbes.com/sites/wadepfau/2016/01/19/potential-concerns-and-risks-for-traditional-long-term-care-insurance/#32adb3361a61. Accessed Oct. 6, 2016. 

Long-term care insurance policies are contracts between you and an insurance company. Insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer. 

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

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

 

AE09165128B

Shortlink

The Far-Reaching Applications of Insurance

When most people hear the word “insurance,” the things that come to mind may be home, auto or life. However, the scope of what can be covered by insurance extends far beyond everyday needs. 

Unfortunate as it may be, the news is often filled with natural and man-made disasters. The role insurance plays in these situations may not make the headlines, but when something goes wrong, insurance can make recovering from a setback less stressful.

Here’s a look at some national headlines you may have heard about over the past few months, and how insurance came into play in the aftermath:    

 

  • When a rocket blows up on takeoff, like the multimillion dollar SpaceX rocket did at Cape Canaveral in September, is all lost? The answer is no, thanks to the coverage of space insurance policies. The space insurance industry receives around $750 million in premiums each year to cover about 50 space launches, with a one in 20 failure rate. Interestingly, despite the fact that it’s an expensive and volatile business, premiums for space rockets are actually dropping, closing in on the lowest rates in history.1 
     
  • Sadly, people in Louisiana are learning the hard way that flood damage isn’t covered by standard policies such as property or business interruption insurance. Many people mistakenly believe that if you don’t live (or own a business) in an authorized flood zone, you don’t need flood insurance. The reality is about one-third of flood claims are made by owners who are not in flood zones.2 
     
  • As technology use becomes increasingly regular in our everyday lives, so has the frequency of cyberattacks. To address this issue, specialized “cyber” insurance has become popular for businesses to cover the fallout from cyberattacks and data breaches. Because it’s a relatively new facet of the industry, there is no standard policy. 3 Therefore, these policies can range from targeted incidents to broad-based business coverage that could overlap with other types of insurance.4 
     
  • As if cyberattacks aren’t enough cause for concern, imagine feeling the need to purchase terrorism insurance — an issue business owners in Europe are currently dealing with. While some business insurance policies cover building damage, terrorism is becoming its own distinct coverage. One aspect is destruction of property, but business owners are seeing long-term ramifications of terrorism in terms of economic losses as well.5 
     
  • Businesses aren’t the only ones worried about terrorism. International Travel and Healthcare became the first company to offer a terrorism travel insurance policy. The “Safe Journey” policy costs about £4.60 for a single two-week trip and covers the “disinclination” to travel should your vacation plans fall within six weeks of a terrorist attack in your destination.6 It also makes it easier to cut your visit short if an attack happens while you’re there. The insurer offers the policy as a supplement to its regular traveler’s insurance policy.7

 

Content prepared by Kara Stefan Communications. 

1 Mark Fahey. CNBC. Sept. 1, 2016. “When a rocket blows up, space insurers pay for it.” http://www.cnbc.com/2016/09/01/when-a-rocket-blows-up-space-insurers-pay-for-it.html. Accessed Sept. 2, 2016.
2 Stephanie Riegel. Greater Baton Rouge Business Report. Aug. 18, 2016. “Flooded business owners realizing business interruption insurance won’t do any good.” https://www.businessreport.com/article/flooded-business-owners-realizing-business-interruption-insurance-wont-good. Accessed Sep. 2, 2016.
3 Peri N. Mahaley. Corporate Counsel. Sept. 1, 2016. “5 Tips for Buying Cyberinsurance.” http://www.corpcounsel.com/id=1202766529954/5-Tips-for-Buying-Cyberinsurance?slreturn=20160802113633. Accessed Sept. 2, 2016.
4 Ibid.
5 Louie Bacani. Business Insurance Magazine. Aug. 8, 2016. “Europe terror attacks to increase insurance demand.” http://www.insurancebusinessmag.com/uk/news/breaking-news/europe-terror-attacks-to-increase-insurance-demand-35888.aspx . Accessed Sept. 2, 2016.
6 Louie Bacani. Insurance Business Magazine. June 8, 2016. “UK’s first terrorism travel insurance launched.” http://www.insurancebusinessmag.com/uk/news/breaking-news/uks-first-terrorism-travel-insurance-launched-32981.aspx. Accessed Sept. 2, 2016.
7 Ibid. 

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

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

 

AE09165126B

Shortlink

Health Care Spending Trends

For the 40+ year period of 1961 to 2002, health care expenses followed a pretty steady upward trend, thanks to things like the introduction of Medicaid, coverage expansion and occasional price increases.1 

But between 2003 and 2007, that rampant growth slowed down considerably, and the impact of the recession was felt from 2008-2013.2 Many Americans lost their health care insurance during this time period or stopped going to the doctor because of the money they had to pay out of pocket. Several drug patents also ran out during this 10-year stretch, so the market began to be flooded with new, cheaper generic drugs.3 

Since then, however, spending has creeped back up. The cost of large employers providing insurance to their workforce is projected to increase by 5 percent in 2017, while premium increases for public exchange plans are expected to average about 10 percent.4 Employers report they plan to offset increases by:5 

  • Managing pharmacy spending for high-cost specialty drugs
  • Increasing enrollment in high-deductible health plans with tax-advantaged savings accounts
  • Steering plan members to hospitals and medical centers with a good track record for treating things like back, knee, cardiac and infertility issues
  • Moving to benefit designs that require employees to participate in health-related activities to reduce employee cost-sharing 

Pharmaceutical costs represent approximately 20 percent of employer medical spending, and are increasing at a rate that accounts for roughly half of medical cost inflation.6 Just recently, drug manufacturer Mylan NV came under fire for its 500 percent price increase (since 2007) for the EpiPen emergency allergy injection.7 

Meanwhile, specialty drugs, such as those developed for cancer, can cost thousands of dollars per month. Last year, spending on specialty drugs increased by 18 percent compared to less than 1 percent for standard prescription drugs.8 

Four of the largest health insurance companies believe the way to reduce spending is by consolidating, but the Justice Department isn’t so sure. The Anthem/Cigna and Aetna/Humana merger deals are being heavily scrutinized since they would substantially reduce competition within the industry.9 The question remains whether the big five — which potentially could become the big three — would pocket profits resulting from consolidations or pass those savings on to customers.10 

Content prepared by Kara Stefan Communications. 

1 Aaron C. Catlin and Cathy A. Cowan. Centers for Medicare & Medicaid Services. Nov. 19, 2015. “History of Health Spending in the United States, 1960-2013.” https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/HistoricalNHEPaper.pdf. Accessed Aug. 26, 2016.
2 Ibid.
3 Ibid.
4 David McCann. CFO.com. Aug. 9, 2016. “Specialty Drugs Drive Health Care Cost Trend.” http://ww2.cfo.com/health-benefits/2016/08/specialty-drugs-drive-health-care-cost-trend/. Accessed Aug. 26, 2016.
5 Willis Towers Watson. Aug. 8, 2016. “U.S. employers expect health care costs to increase 5.0% in both 2016 and 2017.” https://www.willistowerswatson.com/en/press/2016/08/us-employers-expect-health-care-costs-to-increase-5-percent. Accessed Sept. 2, 2016.
6 Willis Towers Watson. Dec. 15, 2015. “Employers Take Aim to Curb High Cost of Pharmacy Benefits.” https://www.towerswatson.com/en-US/Press/2015/12/employers-take-aim-to-curb-high-cost-of-pharmacy-benefits. Accessed Sept. 2, 2016.
7 Toni Clarke and Ransdell Pierson. Reuters. Aug. 25, 2016. “Mylan offers discounts on EpiPen amid wave of criticism.” http://www.reuters.com/article/us-mylan-nl-pricing-idUSKCN11017J. Accessed Aug. 26, 2016.
8 Alison Kodjak. NPR. March 14, 2016. “Cancer And Arthritis Drugs Drive Up Spending on Medicines.” http://www.npr.org/sections/health-shots/2016/03/14/470417680/cancer-and-arthritis-drugs-drive-up-spending-on-medicines. Accessed Aug. 17, 2016.
9 Jay Hancock. NPR. Aug. 11, 2016. “In Battle of Health Care Titans, Should Insurers Act Like Wal-Mart?” http://www.npr.org/sections/health-shots/2016/08/11/488891554/should-big-insurance-become-like-walmart-to-lower-health-costs. Accessed Aug. 26, 2016.
10 Ibid. 

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

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

 

AE09165117B

Shortlink

Pension Matters

When it comes to preparing for retirement, headlines about underfunded pensions can be troubling. One study found that 21 state pensions held less than 40 percent of the assets needed to pay benefits. To make up for that shortfall, each taxpayer would have to contribute an extra $1,385 per year.1 

While not every worker in America is fortunate enough to have an employer-sponsored pension, it appears that even some who do may still have reason for concern. If you’re contemplating other options that could help you save for retirement in the event that your pension is underfunded, it may help to meet with a financial professional. We can discuss your individual situation and recommend insurance products to help create an additional retirement income stream. 

One of the issue