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How to Help Avoid Fraud and Scams

The recent security breach at credit rating service Equifax brings home the reminder that each of us must be ever-vigilant in protecting our private information.1 It can be easy to become lackadaisical. We expect companies with which we conduct financial transactions to keep our data secure.

 

Unfortunately, hackers seem to be advancing their skills at a faster rate than large corporations can keep up. Moreover, the tools available to consumers to help protect their data – including credit monitoring, identity monitoring, identity restoration and identity theft insurance – are more reactive than proactive.2

 

One of the newer recommendations, however, is to freeze your credit report at each of the three national credit agencies – Equifax, TransUnion and Experian. This action stops a credit agency from releasing your information to a third-party request without your permission, eliminating the prospect of someone using your information to open an account without your knowledge.3

 

While some transactions may leave us at the mercy of third-party security systems, we can still be cautious about how we seek information and who we obtain it from. When it comes to your retirement savings and insurance, you should work with financial professionals you trust. They should be thoroughly vetted for credentials and experience. Also, don’t feel compelled to give out personal financial information at your first meet and greet.

 

Unfortunately, one demographic that seems to be vulnerable to fraudsters is the elderly. One report estimated that up to $36.5 billion is scammed each year from older Americans.4

 

Some of the financial scams that target the elderly include fraudulent calls requesting bank or investment account information, mail or email solicitations that appear to be bills for a product or service that wasn’t provided, or overcharging for a service act that was provided. Older adults who are forgetful or unfamiliar with the ways services are charged today may assume they should give out the information or money requested – not realizing that the fault lies with the perpetrator.5 It’s generally a good idea to have a trusted family member or friend review the request before responding.

 

Above all, remain vigilant when someone asks for money or personal information.

 

Content prepared by Kara Stefan Communications.

 

1 NPR. Sept. 8, 2017. “Credit Reporting Agency Equifax Reveals Massive Hack.” http://www.npr.org/2017/09/08/549373796/credit-reporting-agency-equifax-reveals-massive-hack. Accessed Sept. 19, 2017.

2 WatchBlog. Government Accountability Office. April 11, 2017. “How Useful Are Identity Theft Services?” https://blog.gao.gov/2017/04/11/how-useful-are-identity-theft-services/. Accessed Sept. 19, 2017.

3 Adam Shell. USA Today. Sept. 11, 2017. “How to defend yourself against identity theft after the Equifax data breach.https://www.usatoday.com/story/money/2017/09/11/how-defend-yourseafter-equifax-data-breach-credit-report-freeze-strong-defense-against-identity-thef/654065001/. Accessed Sept. 19, 2017.

4 Kelli B. Grant. CNBC. Aug. 28, 2017. “$36 billion might be a low estimate for this growing fraud.https://www.cnbc.com/2017/08/25/elder-financial-fraud-is-36-billion-and-growing.html. Accessed Sept. 19, 2017.

5 Barbara Kate Repa. Nolo. “Elder Abuse: Financial Scams Against Seniors.” https://www.nolo.com/legal-encyclopedia/elder-abuse-financial-scams-against-29822.html. Accessed Sept. 19, 2017.

 

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

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

 

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Working Longer

Ah, the life questions we face. Young adults contemplate which college to attend and how that might affect their future. Women – and increasingly often, men – ponder whether to stay home and raise children, work or both. People contemplate job changes and relocations. And then, of course, a big question: When should I retire? One report observed that these days, about a third of adults ages 65 to 69 are continuing to work, and one-fifth of people 70 to 74 years old are working as well. The majority of them are working full time.1

 

If you get to make the decision to continue working all on your own, you are fortunate. Many people are forced to retire earlier than they’d like due to health reasons or because they are let go by their employer.2 If you can continue working, there can be many benefits, such as more time to save for retirement, employer-sponsored health insurance coverage, access to a social network, intellectual engagement and a place to go every day where you feel needed and important.

 

These are all good reasons to work longer. But whether you do so or not, you’re going to need a well-thought-out retirement income strategy. Using a variety of insurance products, we can help you create a strategy designed to help you to live the kind of retirement you’ve worked hard for. Contact us today to get started on your retirement income strategy.

 

If you are planning to work longer, consider that you don’t necessarily have to keep your current job. If you like it, that’s great. But if not, you might be able to phase into another role at your company, work in a similar position at another company or even take a completely different job in another industry. As we get older, we sometimes reflect back on what we’ve done, or didn’t do, and what we would do differently. If you’ve always been interested in another field, find out what it would take to break into it. If you’d like more time to pursue a hobby, figure out if there’s a way to turn it into a career.3

 

For example, if you love football, consider announcing for games at a local high school, coaching or refereeing. Apply to be an intern in a different field, write movie reviews for your local newspaper or work in a friend’s shop. While these jobs may not pay all that well, they may pay more than the retirement alternative of no outside income. By stringing together a variety of paying and volunteer gigs, you not only can supplement your retirement income but pursue passions and hobbies, and create quite a busy and engaged retirement lifestyle.

 

If you’d like a different job that can potentially pay substantial income, consider becoming a real estate agent. Many mature adults have the right qualities for the role – they know their community and neighborhoods, have a broad network of local contacts, have experience buying and selling their own homes, and understand the concerns and issues of new buyers. Furthermore, real estate is a relatively easy field to enter, and you have a certain degree of flexibility so you can work as much as you need for your income requirements.4

 

Another flexible job in which you may be able to use your previous work experience is as a freelance writer. Whether writing for your local paper or industry trade journals, writing is something you can practice on your own time to improve without extra schooling or training.

 

The point is, you may enjoy working longer and benefit from all of the associated advantages. However, if you don’t want to continue working in your current job, your options aren’t limited. You have knowledge and experience to rely on, which, when you think about it, is a whole lot more than you had when you started your career.

 

Content prepared by Kara Stefan Communications.

 

1 The American College of Financial Services. Aug. 2, 2017. “5 Things to Tell Clients about Working Past Retirement Age.http://knowledge.theamericancollege.edu/blog/5-things-to-tell-clients-about-working-past-retirement-age. Accessed Sept. 11, 2017.

2 Marlene Y. Satter. BenefitsPRO. Dec. 4, 2015. “What is forcing workers to retire earlier than they planned?” http://www.benefitspro.com/2015/12/04/what-is-forcing-workers-to-retire-earlier-than-the. Accessed Sept. 29, 2017.

3 Robert Powell. USA Today. Feb. 27, 2017. “How to keep earning a paycheck in retirement.https://www.usatoday.com/story/money/personalfinance/retirement/2017/02/27/how-keep-earning-paycheck-retirement/98266500/. Accessed Sept. 11, 2017.

4 Maryalene LaPonsie. US News & World Report. May 8, 2015. “Real Estate: The Ultimate Second Career for Seniors.https://money.usnews.com/money/retirement/articles/2015/05/08/real-estate-the-ultimate-second-career-for-seniors. Accessed Sept. 11, 2017.

 

 

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

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

 

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Economic Growth Prospects for the Future

Are life-changing innovations a thing of the past in the United States? While today’s technology seems to advance in leaps and bounds, one economist believes it won’t change the fabric of the average American’s life the way inventions like electricity, indoor plumbing and the elevator did in the 20th century.1

Yes, the internet is an amazing resource, and smartphones are nearly ubiquitous, but in terms of economic growth and productivity, they have not contributed as much as you might expect. Social media and infinite sources of information actually may serve to reduce our productivity both at home and at work.2

Nearly everyone can think of ways innovations have increased productivity, whether it’s looking up information online rather than consulting the library or using modern kitchen appliances that make cooking prep and cleanup much easier. However, this increased technology and efficiency may not translate to any improvement in one’s financial situation. While technology and online tools can allow you to better monitor your finances, please feel free to contact us for help in assessing your current retirement income strategy. As an independent financial services firm, we help people create retirement strategies using a variety of insurance products to custom suit their needs and objectives.

Today, two of the fastest-growing industries in the U.S. are construction and computer systems design.3 While both of these disciplines certainly have the capacity to improve people’s lives and productivity, they are not likely to present the quantum leap of, say, refrigeration.

One industry poised for rapid growth is satellite manufacturing. While costly in its upstart, prices are likely to align with greater demand for navigation, transportation management, disaster management, military intelligence and telecommunication applications.4

Some say the advancement of automation will replace jobs, but proponents are quick to point out that automation can help the American workforce become more productive. Amazon is a good example of a company that has embraced automation yet continues to offer more new jobs.5

What’s interesting is that while we measure economic growth on a national scale, contributions are not balanced. Certain regions, states and metropolitan areas contribute more substantial gains to the U.S. growth rate than others. For example, the labor force in Massachusetts is currently growing at the fastest rate in the country, having added 300,000 more jobs in the past 10 years. This is primarily because the state is home to a variety of strong and growing industries such as health care, financial services, high-tech manufacturing and higher education.6

And while controversial in its mix of documented and undocumented workers, the Latino population is considered a major contributor to U.S. GDP. Between 2010 and 2015, the Latino workforce increased by about 2.5 million while non-Latino workers shrank by about 4,000. This may be explained in part by the willingness of this demographic to pursue a higher education. Latino college graduates grew by 40.6 percent in that same timeframe, compared to 13.6 percent for non-Latinos.7 Economists tend to agree that the better educated the workforce, the higher a country’s economic growth prospects.

 

Content prepared by Kara Stefan Communications 

1 Knowledge@Wharton. Feb. 3, 2016. “Are America’s Best Years of Innovation Over?” http://knowledge.wharton.upenn.edu/article/dazzling-yet-disappointing-why-u-s-growth-productivity-will-underperform-the-past/. Accessed Sept. 4, 2017.
2 Ibid
3 Mary Ellen Biery. Forbes. April 9, 2017. “The 10 Fastest-Growing Industries in The U.S.” https://www.forbes.com/sites/sageworks/2017/04/09/the-10-fastest-growing-industries-in-the-u-s/#56fdb5471ef2. Accessed Sept. 4, 2017.
4 Business Insider. Sept. 4, 2017. “Satellite Bus Market Worth $13.64 Billion USD by 2022.” http://markets.businessinsider.com/news/stocks/Satellite-Bus-Market-Worth-13-64-Billion-USD-by-2022-1002306432. Accessed Sept. 4, 2017.
5 Steve Cousins. TechCrunch. Sept. 4, 2017. “Can robots help the U.S. get its economic mojo back?” https://techcrunch.com/2017/09/04/can-robots-help-the-u-s-get-its-economic-mojo-back/. Accessed Sept. 4, 2017.
6 Shira Schoenberg. MassLive.com. Sept. 4, 2017. “Study: Massachusetts has fastest growing labor force in US.” http://www.masslive.com/politics/index.ssf/2017/09/study_massachusetts_has_fastes.html. Accessed Sept. 4, 2017.
7 Mark Bloomfield. The Hill. Aug. 14, 2017. “Look to Latinos to drive US economic growth.” http://thehill.com/blogs/pundits-blog/economy-budget/346464-latinos-could-lead-us-out-of-economic-malaise. Accessed Sept. 4, 2017.

This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

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

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Wealth and Income: Some Tax Implications

What do Michael Bloomberg, Arnold Schwarzenegger and Mitt Romney all have in common? When they held public office, each accepted only $1 in annual compensation. President Trump also has chosen to forgo his pay, donating his first-quarter salary – minus an amount for taxes – to the National Parks Service.1

Taxes were deducted from the donation due to IRS rules regarding donating income. According to the rules, if you accept income, you are generally responsible for the income taxes levied on it, regardless of the fact that you may then turn around and gift it. You may be able to claim the gift as a tax deduction, but the deduction is against the taxes owed on that income. President Obama worked around this rule by having the reward money for his Nobel Peace Prize paid out directly to charity so he bore no tax liability on those funds.2

Clearly, if you’re going to be generous with wages or assets, it takes considerable planning ahead to help minimize your tax liability. Indeed, the same goes for the federal estate tax on wealth valued at more than $5.49 million, to which one White House adviser allegedly remarked, “Only morons pay the estate tax.” In other words, those who are subject to the tax tend to deploy strategic plans to minimize or avoid it altogether.3

Perhaps proactive tax planning is one of the reasons revenues from the current 40 percent federal estate tax have been plummeting, dropping from $25 billion in 2008 to $17 billion in 2015.4 Then again, in 2008 the federal estate tax rate was higher (45 percent) and applied to a lower threshold ($2 million).5

As we move toward the end of 2017, tax reform is in focus for a couple of reasons. First, President Trump is working to make good on his campaign promise to cut taxes; that’s no small feat given the revenues needed to support ambitious infrastructure and military initiatives.

Second, as we approach year-end, it’s time to consider your income tax bill for 2017 and any strategies you can deploy to help minimize your taxable income. It’s a good idea to work with an experienced tax professional familiar with your unique needs and financial situation. Remember, when it comes to taxes, a strategic plan can make a significant difference. We can refer you to a tax professional; just give us a call.

Content prepared by Kara Stefan Communications.

1 Robert W. Wood. Forbes. April 4, 2017. “Trump Donates Presidential Pay, Reminding Us IRS Rules Apply to Everyone.” https://www.forbes.com/sites/robertwood/2017/04/04/trump-donates-presidential-pay-reminding-us-irs-rules-apply-to-everyone/#2400d9e02824. Accessed Aug. 30, 2017.

2 Ibid.

3 Robert W. Wood. Forbes. Aug. 30, 2017. “Estate Tax Repeal Is Not Just For Morons.” https://www.forbes.com/sites/robertwood/2017/08/30/estate-tax-repeal-is-not-just-for-morons/#2cc8df70701b. Accessed Aug. 30, 2017.

4 Robert Frank. CNBC. Aug. 29, 2017. “‘Only morons pay the estate tax,’ says White House’s Gary Cohn.” https://www.cnbc.com/2017/08/29/only-morons-pay-the-estate-tax-says-white-houses-gary-cohn.html. Accessed Aug. 30, 2017.

5 Julie Garber. The Balance. June 8, 2017. “Exemption From Federal Estate Taxes: 1997-2017.” https://www.thebalance.com/exemption-from-federal-estate-taxes-3505630. Accessed Aug. 30, 2017.

This information is not intended to provide tax or legal advice. Be sure to speak with a qualified professional about your unique situation.

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

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

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Monitoring Insurance Needs Is a Good Policy

Life insurance is something you purchase, then hopefully don’t need to use until many years down the road. But that doesn’t mean you should stop paying attention to it. As you age, it’s important to monitor the policies you own.

Some policies may no longer be needed, while others may be needed now more than ever. It’s a matter of evaluating your personal situation as you move through life. Since insurance is meant to help protect us from major financial loss, it’s important to continually assess how our goals and needs change over time, and determine if our insurance coverage is aligned with them.1

If it’s time for you to get a customized insurance review, please give us a call.

Many people may assume they no longer need life insurance during retirement. For some, this may be true. Once children are out on their own, retirees who feel they have saved enough to provide income for both spouse’s lifetimes are likely to drop their policies.2 However, before making this decision, it’s important to review your retirement and legacy goals. Some people decide to keep life insurance during retirement in order to provide a tax-free death benefit for their beneficiaries when they die. This can free up other assets for use in retirement without concerns about whether they will have money to leave to their children.

For large estates, policy owners may use life insurance proceeds to help pay state and federal inheritance taxes. Still others may want life insurance to provide the surviving spouse with additional funds for unexpected expenses.3

In some cases, it may be appropriate for retirees to purchase life insurance for the death benefit, as well as a complementary strategy for additional retirement income. Some permanent life insurance policies offer a cash value account that grows over time and can be used to supplement retirement income, typically through the use of policy loans. At the same time, the policy can provide tax-advantaged proceeds to help protect loved ones upon the owner’s death.4 Please note that policy loans and withdrawals will reduce the available cash value and death benefit.

Retirees who stop paying premiums for policies they determine they no longer need can use that excess money to help pay for the policies they may need during retirement, such as long-term care insurance.5 This is even true of policies we often take for granted, such as homeowners and auto insurance. If you downsize to a less expensive home, your homeowners premium will likely drop as well. If you downsize to one car or, eventually, no car at all, you can free up extra cash, which can help defray any new transportation costs.

 

Content prepared by Kara Stefan Communications.

1 Lisa Brown. Kiplinger. June 2017. “Rethink These 3 Financial Strategies Every Decade (or sooner!)” http://www.kiplinger.com/article/retirement/T023-C032-S014-rethink-these-3-financial-strategies-every-decade.html. Accessed Aug. 20, 2017.

2 Tim Grant. Times-Union. Aug. 12, 2017. “Rethink dropping life insurance.” http://www.timesunion.com/business/article/Rethink-dropping-life-insurance-11813300.php. Accessed Aug. 20, 2017.

3 Cheryl Winokur Munk. The Wall Street Journal. July 5, 2017. “Should Retirees Have Life Insurance?” https://www.wsj.com/articles/should-retirees-have-life-insurance-1499261075?utm_campaign=Q32017%20Thought%20Leadership. Accessed Aug. 20, 2017.

4 Jacob Alphin. Forbes. May 11, 2017. “How To Use Life Insurance In Your Retirement Planning.” https://www.forbes.com/sites/forbesfinancecouncil/2017/05/11/how-to-use-life-insurance-in-your-retirement-planning/#85e67b469cff. Accessed Aug. 20, 2017.

5 Jennifer Fitzgerald. Betterment. March 3, 2016. “3 Important Types of Insurance to Have When Preparing for Retirement.” https://www.betterment.com/resources/retirement/planning-ahead/3-important-types-of-insurance-when-preparing-for-retirement/. Accessed Aug. 20, 2017.

Life insurance policies are contracts between you and an insurance company. Life insurance product guarantees rely on the financial strength and claims-paying ability of the issuing insurer. If properly structured, proceeds from life insurance are generally income tax free.

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

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

 

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Legislative Updates

With so much attention focused on the rifts among and between political parties and the news media, it may seem as if little actual legislation is making its way through our democratic process. However, while President Trump’s major initiatives – Affordable Care Act repeal, tax reform and infrastructure improvements – haven’t been enacted, Trump has signed more than 40 bills since taking office in January.1

Although the political situation may present frustration for people trying to make prudent decisions about their financial future, we remind you that finances are personal. Your financial decisions should reflect your own goals and timeline. We are happy to evaluate your retirement income strategy and make recommendations utilizing insurance products to help you work toward your objectives.

Here is an overview of some of the recent legislation Congress has passed:

·        Countering America’s Adversaries Through Sanctions Act (H.R. 3364) – This bill requires the president to submit any planned waiver of current sanctions on other countries to Congress, and details new sanctions on Russia, Iran and North Korea for a variety of violations.2

·        Securing our Agriculture and Food Act (H.R. 1238) – This bill authorizes the Department of Homeland Security to protect efforts related to food, agriculture and veterinary defense from acts of terrorism and other high-consequence events that pose a risk to homeland security.3

·        Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 (S. 1094) – This bill gives the secretary of Veterans Affairs the authority to fire employees through an expedited appeals process, and it makes it easier to discipline employees by revoking bonuses. It also has provisions to protect whistleblowers who report wrongdoing.4

·        Public Safety Officers’ Benefits Improvement Act of 2017 (S. 419) – This bill revises requirements for the Public Safety Officers’ Benefits program, which provides death, disability and education benefits to public safety officers who are killed or injured in the line of duty, as well as to their survivors. The bill includes provisions to expedite the payment of benefit claims.5

Content prepared by Kara Stefan Communications.

1 Jennifer Hansler. CNN. Aug. 3, 2017. “President Trump has signed 43 bills into law. Here’s what they do.” http://www.cnn.com/2017/06/29/politics/president-trump-legislation/index.html. Accessed Aug. 18, 2017.
2 GovTrack. 2017. “H.R. 3364: Countering America’s Adversaries Through Sanctions Act.” https://www.govtrack.us/congress/bills/115/hr3364. Accessed Aug. 18, 2017.
3 GovTrack. 2017. “H.R. 1238: Securing our Agriculture and Food Act.” https://www.govtrack.us/congress/bills/115/hr1238. Accessed Aug. 18, 2017.
4 GovTrack. 2017. “S. 1094: Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017.” https://www.govtrack.us/congress/bills/115/s1094. Accessed Aug. 18, 2017.
5 GovTrack. 2017. “S. 419: Public Safety Officers’ Benefits Improvement Act of 2017.” https://www.govtrack.us/congress/bills/115/s419. Accessed Aug. 18, 2017.

This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

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

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Retirement Stages

What’s so difficult about planning for retirement? You save; you retire; you spend.

If only it were that straightforward. Today’s pre-retirees and retirees have so much more to consider. Longer lifespans mean longer exposure to the possibility of inflation eroding your purchasing power. And then there are these concerns:

- The global economy and its impact on everything from market volatility to interest rates to unemployment and wages
- The decrease in company pensions and greater burden for retirees to provide more of their retirement income
- The long-term solvency and viability of Social Security
- How future legislation and the political environment might impact Medicare

 

It’s a lot to think about. That’s one reason it’s important to work with a knowledgeable financial professional to help you consider the factors that might impact your retirement. The good news is that many retirees now have the time, thanks to a longer lifespan, to plan for and enjoy a longer retirement. When it comes to your retirement income planning needs, we may be able to help with that; just give us a call. As an independent financial services firm, we help people create retirement strategies using a variety of insurance products to custom suit their needs and objectives.

Much as our younger adult life can be divided into stages — college, job, marriage, family and all manner of advancement rungs in a career — retirement can be broken into separate categories as well. It’s not all travel and country club parties, gardening and golfing, grandchildren and book clubs. In fact, those activities are generally characteristic of the first stage of retirement, when we tend to spend more time with family and friends, pursuing hobbies, travel and other “bucket list” items.1 

One of the best things about the first stage of retirement is that Mondays are no longer dreaded; they’re just another day of the week.It may take some time, but some retirees learn to replace their office wear for roomy, comfortable workout pants and soft tees. Put these on, and you can just feel the stress melt away.2

During the second stage of retirement, you might not travel quite as much. You may even think about moving closer to your children or to a community with other people your same age. These are good instincts because it’s important at this stage to stay socially connected. 3

During this stage, if you’re concerned about the possibility of outliving your income, it’s natural to cut back on expensive activities like travel. In fact, now that you spend more time at home, you might consider getting an easy, low-stress part-time job. Or you could join the gig economy, working from home.4 It’s important to remain engaged, and, of course, extra money coming in wouldn’t hurt.5

In the third stage, when retirees move past age 80 or later, they may need daily assistance.6 Again, it’s a good idea to set up some type of regular relationship to avoid isolation and stay connected — even if you remain quite independent. This could involve sharing meals with a companion on a regular basis. Have someone you can call to change a lightbulb, move furniture around for better mobility or help you bake an old family recipe — and share it over a cup of coffee.

Each stage requires some degree of planning. Even during a “freewheeling, high-octane” first stage, you’ll need to lay some of the groundwork to help ensure your latter stages of retirement are enjoyable. This includes eating healthy, establishing an exercise routine that is sustainable throughout your lifetime and engaging in activities you can continue through old, old age. And, perhaps most important, work on strengthening relationships that will be with you forever.

 

Content prepared by Kara Stefan Communications.

1 BoomingEncore.com. “Three Different Stages of Retirement” http://www.boomingencore.com/three-different-stages-retirement/. Accessed Aug. 6, 2017.
2 Business Insider. April 16, 2017. “I retired at 52 with a $3 million net worth — here are 10 things that surprised me about early retirement.” www.businessinsider.com/early-retiree-shares-10-things-that-surprised-him-after-he-quit-his-job-2017-4. Accessed Aug. 6, 2017.
3 BoomingEncore.com. “Three Different Stages of Retirement” http://www.boomingencore.com/three-different-stages-retirement/. Accessed Aug. 6, 2017.
4 Mary Beth Franklin. Investment News. April 21, 2017. “Retirees embrace the gig economy.” http://www.investmentnews.com/article/20170421/BLOG05/170429976/retirees-embrace-the-gig-economy. Accessed Aug. 6, 2017.
5 Katy Read. Star Tribune. Sept. 4, 2016. “Get back to work! Working past ‘retirement age’ is beneficial.” http://www.startribune.com/experts-agree-working-past-retirement-age-is-beneficial/388305801/. Accessed Aug. 6, 2017.
6 BoomingEncore.com. “Three Different Stages of Retirement” http://www.boomingencore.com/three-different-stages-retirement/. Accessed Aug. 6, 2017.

This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

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

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Gender Disparities in Retirement

Everywhere we turn, it seems, there’s an article or newscast about how women are at an economic disadvantage, especially regarding lower wages. Just imagine how much more women could contribute to economic growth if such disadvantages were eliminated.

But we want to work toward counteracting some of those challenges, particularly where retirement income planning is concerned. Even married couples with their retirement savings on track may not be aware of different scenarios that could potentially leave a widow with an income shortfall during her retirement years. We’re happy to review retirement income strategies for your household and make recommendations tailored for your financial situation; just give us a call.

In the meantime, let’s take a look at some of these gender disparities and how they can impact a woman’s personal financial future. For example, women tend to borrow more for college undergraduate student loans than men and take longer to pay them back.1

Presumably, one of the reasons it takes them longer to pay back student loans is that women, on average, tend to earn lower salaries than men. For example, in the United States, white women are paid about 76 cents on the dollar relative to white men.2 Black women receive only 67 cents per dollar.3 This may seem like a woman’s issue, but it’s not. In theory, the longer it takes to pay off student loan debt, the less women can save for retirement, and the less women save, the more reliant they might be on Social Security for retirement income. A demographic that relies heavily on Social Security for retirement income could potentially cause an increase in FICA taxes, which can affect everyone.

One of the ways working women can improve their retirement income situation is by working longer. There are several advantages to this. First, for women who take time out of the workforce for raising children and general caregiving, working longer provides more tax years from which the 35-year calculation for Social Security benefits is drawn.4 Second, women tend to live longer, so they could feasibly work until an older age.5 And finally, researchers have determined that the average woman who works to age 70, rather than retiring at 62, can increase her monthly Social Security check by 12 percent.6

Another area in which women can improve is financial literacy. In a recent study, 18 percent of women ages 60 to 74 passed a 38-question quiz on retirement income topics, compared with 35 percent of men the same age.7 Fortunately, this is an area in which any woman can take the initiative to pursue on her own. It doesn’t require wage legislation passed by Congress; salary negotiation skills with employers; or shortening the time spent out of the workforce for caregiving.

The more women can learn about retirement income planning, the better prepared they can be for their long-term financial future. Planning for retirement is a skill that we believe should not be delegated to fathers, husbands, boyfriends and male children. At the very least, it’s a shared responsibility — but be aware that chances are good a woman will be managing money on her own at some point during adulthood due to divorce or widowhood.8

 

Content prepared by Kara Stefan Communications.

1 Kim Blanton. Center for Retirement Research at Boston College. June 8, 2017. “Is There a Student Loan Gender Gap?” http://squaredawayblog.bc.edu/squared-away/is-there-a-student-loan-gender-gap/. Accessed July 31, 2017.

2 AAUW. Spring 2017. “The Simple Truth about the Gender Pay Gap.” http://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/. Accessed July 31, 2017.

3 Casey Quinlan. ThinkProgress. July 31, 2017. “Black women’s ‘equal pay day’ reminds us how persistent the wage gap is.” https://thinkprogress.org/black-women-wage-gap-ca285791a371. Accessed July 31, 2017.

4 My Retirement Paycheck. National Endowment for Financial Education. 2017. “How are Social Security benefits calculated?” http://www.myretirementpaycheck.org/Social-Security/How-are-benefits-calculated. Accessed Aug. 7, 2017.

5 Social Security. “Calculators: Life Expectancy.” https://www.ssa.gov/planners/lifeexpectancy.html. Accessed Aug. 7, 2017.

6 Kim Blanton. Center for Retirement Research at Boston College. May 18, 2017. “Women Get a Bigger Social Security Bump.” http://squaredawayblog.bc.edu/squared-away/women-get-a-bigger-social-security-bump/. Accessed July 31, 2017.

7 Christopher Robbins. Financial Advisor. July 27, 2017. “4 Out Of 5 Older Women Flunk This Retirement Literacy Quiz.” http://www.fa-mag.com/news/4-out-of-5-older-women-flunk-this-retirement-literacy-quiz-33885.html?section=. Accessed July 31, 2017.

8 Susan L. Hickey. Newsmax. June 23, 2017. “Many Women Will Spend Their Later Years Alone; Are They Ready for That?” http://www.newsmax.com/Finance/Personal-Finance/older-women-alone-financially/2017/06/22/id/797691/. Accessed July 31, 2017.

We are able to provide you with information but not guidance or advice related to Social Security benefits. Our firm is not affiliated with the U.S. government or any governmental agency.

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

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

 

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Making Friends, Strengthening Relationships

In the early days of childhood, we start picking up communication skills that are continually developed throughout our lives. We make close friends, stay in touch with them and make sure we’re there for the people we care about.

But during retirement, it may take more effort to maintain those friendships. It’s important to remember that while we don’t typically lose these skills, we might lose the motivation to use them. Here are a couple of good reasons to keep up those social connections in retirement:1

·       A study by the Rush Alzheimer’s Disease Center in Chicago found that highly social seniors had a 70 percent lower rate of cognitive decline compared to those who were less social.

·       Researchers at the University of Alabama Birmingham found that using the internet was associated with a 30 percent decrease in depressive symptoms.

As financial professionals, we work with retirees every day helping them create retirement income strategies using a variety of insurance products. We’ve seen firsthand how easy it is to become more isolated when you stop working. You might find that by attending a financial seminar or client workshop, you’ll meet people in the same situation as you. Even if you feel like your retirement income strategy is well-established, we encourage you to continue monitoring your finances and participate in events where you not only have the opportunity to learn, but to spend time with people who may share your same interests and concerns.

When pre-retirees were asked what they would miss most about not working anymore, 17 percent predicted they’d miss their daily social interactions. However, when actual retirees were asked what they missed most from work, that number doubled — 34 percent said they missed their social connections from work.2

Another thing that’s different about retirement is that you’re no longer competing for career opportunities, so priorities can change. Hobbies you might have pursued during your career, like golf and tennis, may have been important to expand your network. But retirement can be a time for careful reflection; recognize that your energy, health and financial resources may be more limited now, so it’s important to prioritize what you want to do irrespective of anyone else’s expectations.3

By the same token, you may want to explore a deeper relationship with someone who’s been right there with you for decades: your spouse. Find out what your partner is like now. As you spend more time together, you might be surprised at how they’ve changed since you started working, and maintaining your relationship with your spouse can enhance your journey through retirement.4

New research has found that friendships in retirement may be even more valuable than family relationships. The quality of friendships proved to be a predictor of whether someone would acquire a chronic illness as they aged, whereas the quality of family relationships was not.5

Another interesting aspect of senior friendships is that women are more likely than men to make friends with others who are either much younger or much older. Researchers hypothesize this is because men tend to bond over activities, while women create more of an emotional connection — they don’t have to plan an event to nurture their relationships.6

One reason this phenomenon is particularly important is because seniors tend to lose similarly aged peers as they grow older. By establishing relationships with people from a younger generation, you’re more likely to maintain those friendships throughout your life.

 

Content prepared by Kara Stefan Communications

1 NEA. 2017. “The Value of Maintaining Social Connections Throughout Retirement.” https://www.neamb.com/the-value-of-maintaining-social-connections-throughout-retirement.htm. Accessed July 13, 2017.

2 Roger Whitney. The Retirement Answer Man. March 6, 2017. “One thing to do now to improve your social life in retirement.” http://rogerwhitney.com/social-life-in-retirement/. Accessed July 13, 2017.

3 Margaret Manning. Sixty & Me. 2016. “How to make friends as an adult in 4 simple steps.” http://sixtyandme.com/how-to-make-friends-as-an-adult-in-4-simple-steps/. Accessed July 13, 2017.

4 Emily Brandon. U.S. News & World Report. May 22, 2017. “7 Tips to Maintain Social Connections in Retirement.” https://money.usnews.com/money/retirement/aging/articles/2017-05-22/7-tips-to-maintain-social-connections-in-retirement. Accessed July 13, 2017.

5 Susie Neilson. New York Magazine. June 16, 2017. “In Old Age, Friendships Might Matter Even More Than Family.” http://nymag.com/scienceofus/2017/06/in-old-age-friends-might-matter-even-more-than-family.html. Accessed July 13, 2017.

6 Verena von Pfetten. New York Magazine. May 24, 2017. “When Your Best Friend Is Younger than Your Daughter.” http://nymag.com/scienceofus/2017/05/why-cross-generational-female-friendships-are-on-the-rise.html. Accessed July 13, 2017.

This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

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

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Retirement: The New Status Symbol

A lack of savings among many U.S. households could mean a change in the perception of retirement. It used to be a foregone conclusion that once you were too old to work, you retired. That’s not always the case anymore.

More than a third of U.S. households in prime earning years or later have no retirement savings and no access to a traditional pension.1 It’s become increasingly uncommon for people to retire in their early 60s, and those who fail to plan ahead for their future retirement income needs could end up with a retirement lifestyle worse than the one they had while working.

This doesn’t mean these middle-aged households are broke. Retirement income planning may just not be a priority yet. No matter your age, it’s never too late to start building strategies so you can enjoy your post-working years, and as financial professionals, that’s what we’re here for.

It takes diligence and focus to create a retirement income plan. Dwight D. Eisenhower once said, “Plans are worthless, but planning is everything.”2 This reiterates the point that planning for retirement should be strategic and committed, while at the same time fluid and flexible. Nobody knows what will happen in the future, but we can help you create a retirement income strategy designed to help meet your specific goals.

It can be difficult in the moment, but turning your back on pricey, impulse purchases, such as an expensive car, an outdoor kitchen or backyard pool, can help improve the prospects of your retirement down the road. Many people with good credit can borrow money to purchase these things, but good credit doesn’t fund a long retirement.3

Some workers might argue it’s not worth giving up indulgences today for a better (and earlier) retirement lifestyle. It’s a matter of examining individual priorities. One grandmother did just that when her 8-year-old grandson asked if she would be around when he got married. She had to rethink her priorities for what it might take to accomplish that goal. This led to a stronger pursuit of healthier living, including wholesome food, daily exercise and supportive social connections.4

While it may sound daunting to put in the years of hard work it takes to reach retirement, in some ways long hours at the office is a status symbol of its own. In Italy, the leisure class is perceived to have a higher status than the working class. But in the United States, there’s a certain prestige associated with working long hours and constantly being busy.5

Some people work 70+ hour weeks, not to earn more money and buy more things, but because that is what the working elite do.6 While this may not be the way all people wish to align their priorities, it does offer the distinct advantage of being able to save more money for retirement. For some, retiring is the ultimate status symbol.

Content prepared by Kara Stefan Communications 

1 Stan Choe. The Denver Post. Nov. 18, 2016. “Easy retirement for Americans? It’s only for a privileged few.” http://www.denverpost.com/2016/11/17/easy-retirement-privileged-few/. Accessed July 10, 2017.
2 Jonathan Look. NextAvenue. June 23, 2017. “What I Did to Stop ‘Awfulizing’ Retirement.” https://www.forbes.com/sites/nextavenue/2017/06/23/how-i-stopped-awfulizing-retirement/#1d5429451baf. Accessed July 10, 2017.
3 Holly Johnson. Club Thrifty. May 15, 2017. “My Plan to Achieve the Ultimate Status Symbol.” http://clubthrifty.com/my-plan-to-achieve-the-ultimate-status-symbol/. Accessed July 10, 2017.
4 Jane E. Brody. The New York Times. April 20, 2016. “Thriving at Age 70 and Beyond.” https://well.blogs.nytimes.com/2016/04/25/thriving-at-age-70-and-beyond/. Accessed July 10, 2017.
5 Lisa Tolin. NBC News. April 3, 2017. “The Busy Trap: How Keeping Busy Became a Status Symbol.” https://www.nbcnews.com/better/careers/busy-trap-how-keeping-busy-became-status-symbol-n742051. Accessed July 10, 2017.
6 Ben Tarnoff. The Guardian. April 24, 2017. “The new status symbol: it’s not what you spend — it’s how hard you work.” https://www.theguardian.com/technology/2017/apr/24/new-status-symbol-hard-work-spending-ceos. Accessed July 10, 2017.

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

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

 


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