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What’s Real News?

“And that’s the way it is.”

This is how Walter Cronkite signed off at the completion of his CBS Evening Newscast, which he anchored from 1962 until 1981. Widely recognized as a trusted source to deliver the news, Cronkite was known for his honesty and impartiality.1

These days, it’s hard to find impartiality. Many cable news channels tend to tilt either liberal or conservative, and it can be difficult to differentiate between which shows report the news and which shows merely discuss the day’s news from different viewpoints.

This is one of the reasons why it can be difficult to make financial or economic decisions based on what we hear on “the news.” To get a more complete perspective, it’s a good idea to read newspapers as well as articles on the internet and discuss how the news impacts your particular situation with an experienced professional. If you’d like some assistance in assessing your retirement income strategy, we’re here to help.

However, it’s also helpful to keep a few guidelines in mind when it comes to evaluating what is real news and what may be a skewed opinion. Earlier this year, Pew Research Center conducted an experiment in which researchers presented five statements of fact and five stated opinions to more than 5,000 adults. As it turns out, only 26 percent of respondents were able to correctly identify which of the statements constituted actual facts. In contrast, 35 percent of participants misidentified the five opinions as facts.2

In addition to televised newscasts, the internet constantly generates a wide array of “news stories” — some based on fact and some completely made up for the purpose of getting readers to click on their links. In some cases, headlines may be provocative and misleading — but the underlying articles are factually based. Note that headlines are generally created by an editor, not the writer of the article, with the singular intent of provoking a reader to click on the full article — thus exposing him or her to more advertisers.

We are currently at a crossroads in which the internet is unregulated, which means that there is no central, standardized regulating body that controls the flow of information across online media and social media outlets. Some websites provide content by legitimate journalists, while others post “user-generated” content, where anyone with an opinion can publish an article. Journalistic standards, such as those taught in journalism school, are not generally observed or heeded across all media outlets.

In response to our new culture of “fake news,” “alternative facts” and willful disinformation, social media websites such as Facebook and Twitter have launched efforts to fact-check information shares on their platforms. Facebook recently announced that it now has 27 fact-checking partners across the world that use various tools to analyze pictures and videos to help identify and remove false content. Both Facebook and Twitter also rely on users to report shared content that is false or abusive.3

These efforts come in the wake of the vast spread of disinformation across websites. A recent study revealed that Facebook users were exposed to “fake news” articles generated from 570 sites up until and just shortly after the 2016 U.S. presidential election.4

Also, be aware that quiz answers, videos, shared posts, “likes” and comments are used to help develop data profiles about each user, which are in turn sold to advertisers for better targeted marketing messages.5 It’s important for users to become better educated about how their information is compiled and used to help mitigate the spread of false information.6

Content prepared by Kara Stefan Communications.

1 Biography.com. “Walter Cronkite Biography.” https://www.biography.com/people/walter-cronkite-9262057. Accessed Sept. 16, 2018.

2 David Bauder. Associated Press. Aug. 16, 2018. “As our media environment blurs, confusion often reigns.” https://apnews.com/127fe8b09ae74a57826ab5953922e711. Accessed Sept. 14, 2018.

3 Edward Alvarez. Engadget. Sept. 13, 2018. “Facebook is fact-checking photos and videos to fight fake news.” https://www.engadget.com/2018/09/13/facebook-fake-news-pictures-videos-fact-checking/. Accessed Sept. 16, 2018.

4 Will Oremus. Slate.com. Sept. 14, 2018. “Facebook’s Crackdown on Misinformation Might Actually Be Working.” https://slate.com/technology/2018/09/facebook-fake-news-getting-better-study.html. Accessed Sept. 16, 2018.

5 Knowledge@Wharton. Sept. 6, 2018. “Advertising in Crisis: How the Turmoil Threatens All Media.” http://knowledge.wharton.upenn.edu/article/auletta-frenemies/. Accessed Sept. 16, 2018.

6 Lion Gu, Vladimir Kropotov, Fyodor Yarochkin, Jonathan Leopando and John Estialbo. Trend Micro. June 13, 2017. “Fake News and Cyber Propaganda: The Use and Abuse of Social Media.” https://www.trendmicro.com/vinfo/us/security/news/cybercrime-and-digital-threats/fake-news-cyber-propaganda-the-abuse-of-social-media. Accessed Sept. 16, 2018.

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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Insights Into Medigap

Many Americans who enroll in original Medicare also purchase a supplemental insurance policy, colloquially known as “Medigap.” Medigap covers some or all of the out-of-pocket costs associated with original Medicare — deductibles, copayments and coinsurance — helping to reduce financial risk. However, there is a wide array of Medigap plans with a variety of different benefits. To help simplify it for consumers, Medigap plans are labeled by letter (A, B, C, D, F, G, K, L, M and N).1

An important fact regarding Medigap to keep in mind is that an enrollee is guaranteed to qualify for coverage only during the first six months after initially enrolling in Medicare. After that, insurers are permitted to conduct medical underwriting, which means they can charge higher premiums based on your health history and any pre-existing medical conditions. However, once you purchase a Medigap policy, federal law guarantees renewability as long as you consistently pay your premiums.2

Currently, only Connecticut, Massachusetts, Maine and New York have laws that require insurers to issue Medigap policies regardless of health status.3

The Initial Enrollment Period, or IEP, for Medicare lasts seven months, beginning three months before you turn 65 years old, including the month you turn 65 and the following three months. If you have already started drawing Social Security benefits by then, you may be automatically enrolled in Original Medicare (Part A and Part B).4 Things can get complicated if you continue working past age 65 and have employer-sponsored health care coverage. If you need help deciphering all of the fine print and regulations, we may be able to suggest resources to help.

Each year, about 10 million people buy Medigap policies to accompany their Medicare plans. While exact benefits vary by policy, Medigap usually covers all or most expenses that are covered by Medicare but not paid in full by Parts A and B (Part B pays only 80 percent of covered expenses).5 The cost for Medigap policies varies based on a number of factors.

The most comprehensive Medigap policies are Plans C and F, which offer 100 percent coverage of Part A coinsurance charges and hospital costs up to a year after Medicare benefits are exhausted. They also pay 100 percent of Part B coinsurance or copayment amounts, hospice care coinsurance, skilled nursing facility coinsurance, and deductibles for Part A and B. Be aware that, starting in 2020, Medigap C and F plans will be phased out for new buyers; current policyholders will be able to retain their plans, but premiums could increase. At that time, Medigap D and G plans will offer the most comprehensive coverage.6

Here’s something to remember: If you’ve been paying for a Medicare Advantage plan and then decide to switch to original Medicare during open enrollment season, you may be declined Medigap coverage due to your medical history. Therefore, the older you get, the more important it is to consider sticking with one plan (Medicare Advantage) or the other (Medicare plus Medigap).

In 2017, 65-year-old policyholders bought more than a third of all new Medigap policies. Among them, Plan F was the most popular, representing slightly more than 46 percent of the total sales premium.7

 

Content prepared by Kara Stefan Communications.

1 Darla Mercado. CNBC. July 31, 2018. “Why you may not be able to count on this additional Medicare coverage.” https://www.cnbc.com/2018/07/31/why-you-may-not-be-able-to-count-on-this-additional-medicare-coverage.html. Accessed Sept. 4, 2018.

2 Ibid.

3 Judith Graham. Kaiser Health News. July 26, 2018. “No Gaps In Understanding: Here’s Your Primer On Medigap Coverage.” https://khn.org/news/no-gaps-in-understanding-heres-your-primer-on-medigap-coverage/. Accessed Sep. 4, 2018.

4 Justin Adsit. Forbes. Aug. 15, 2018. “Medicare Enrollment Periods And Deadlines: When Should You Sign Up?” https://www.forbes.com/sites/forbesfinancecouncil/2018/08/15/medicare-enrollment-periods-and-deadlines-when-should-you-sign-up/#767e5787541d. Accessed Sept. 4, 2018.

5 Philip Moeller. PBS Newshour. July 18, 2018. “How do Medigap plans work? Here’s a tutorial.” https://www.pbs.org/newshour/economy/making-sense/how-do-medigap-plans-work-heres-a-tutorial. Accessed Sept. 4, 2018.

6 Mark Miller. Reuters. July 19, 2018. “U.S. Medigap plans fall short on protections for pre-existing conditions.” https://www.reuters.com/article/us-column-miller-medigap/u-s-medigap-plans-fall-short-on-protections-for-pre-existing-conditions-idUSKBN1K91IK. Accessed Sept. 4, 2018.

7 Genre.com. August 2018. “Medicare Supplement – Highlights of 2017 U.S. Market Survey.” http://www.genre.com/knowledge/publications/surveylhmedsuppsummary18-en.html. Accessed Sept. 4, 2018.

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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Odds for Divorce

Every couple who decides to marry runs some risk of divorce in the future. The only way to definitively avoid divorce is to remain single, but plenty of people are willing to take their chances.

Among the many unintended consequences of divorce is the toll it can take on a couple’s finances. Of divorced women, 46 percent reported in an online survey that divorce brought with it financial surprises. Those included having no idea how much the household carried in debt, such as mortgages, auto loans, 401(k) loans, student loans and credit cards. Many assumed their child support and/or alimony would be more substantial or last longer; that they would be able to keep the family home; or that they wouldn’t have to return to the workforce.

As for the cost of actually filing for divorce, here are some averages from a nationwide survey by legal site Nolo.com:2

  • $250 per hour for a divorce attorney
  • $6,000 to $7,000 for divorce mediation
  • $175 to $700 for legal document preparation (for an uncontested divorce)
  • $200 to $500 for online divorce services (paperwork assistance without court filing)
  • $12,800 average spent on divorce per couple

While it’s always advisable to have legal assistance during a divorce, that’s not the only advice you should seek. Both spouses should work with a financial professional to understand the combined household assets. It’s important to consider things like withdrawal accessibility, tax liabilities and early withdrawal penalties. Also, it’s best to view finances from a “big picture” point of view instead of a single asset at a time, including insurance resources.3 Let us know if we can help you with any questions you might have about your insurance policies.

Of course, the best way to avoid the expense and hassle of divorce is not to get one. Recent studies have revealed some interesting statistics related to marriages that end in divorce, which couples may wish to consider when planning their nuptials.

For example, statistician Nathan Yau tracked divorce rates by profession, using U.S. Census data, and found that people in certain professions have a greater likelihood of divorcing, while others are less likely to end up there. Actuaries are the least likely to get a divorce — presumably because of their experience predicting risk and managing uncertainty — according to Yau’s analysis. Other professions with lower divorce rates include scientists, clergy, software developers and physical therapists. Professions with the highest divorce rates include casino managers, bartenders and flight attendants.4

Another study found that couples can reduce their chances of divorce in the wedding planning phase. For instance, a marriage has the best chance of lasting when the couple:5

  • Spends less money on the engagement ring (less than $2,000)
  • Spends less money on the wedding – weddings costing less than $1,000 have a better chance than those costing more than $20,000
  • Goes on a honeymoon
  • Does not let their partner’s physical appearance factor into their decision to marry

 

 

 

Interestingly, more divorces are filed in March and August than any other months. Some theorize that couples don’t want to spoil the holiday season or summer vacation by announcing their intentions. Besides, some couples believe that spending more family time together during those holidays may help save the marriage.6

 

Content prepared by Kara Stefan Communications.

1 Laurie Itkin. Forbes. July 15, 2018. “The 6 Nasty Financial Surprises For Divorcing Women.” https://www.forbes.com/sites/nextavenue/2018/07/15/the-6-nasty-financial-surprises-for-divorcing-women/#12e3a69524b9. Accessed Aug. 31, 2018.

2 Heather Skyler. Supermoney.com. July 10, 2018. “The Average Cost of Divorce and 5 Major Financial Mistakes to Avoid.” https://www.supermoney.com/2018/01/average-cost-divorce-5-major-financial-mistakes-avoid/. Accessed Aug. 31, 2018.

3 Ibid.

4 Leah Fessler. Quartz. Aug. 23, 2017. “The occupations with the highest and lowest divorce rates in the US.” https://qz.com/1069806/the-highest-and-lowest-divorce-rates-in-america-by-occupation-and-industry/. Accessed Aug. 31, 2018.

5 Chelsea Ritschel. Independent. July 6, 2018. “Couples Who Spend More on Their Weddings Are More Likely To Divorce, Study Finds.” https://www.independent.co.uk/life-style/love-sex/wedding-cost-marriage-divorce-ring-how-much-price-study-a8435646.html. Accessed Aug. 31, 2018.

6 Diana Bruk. Observer. June 7, 2017. “New Study Shows Most Divorces Happen in These Two Months.” http://observer.com/2017/06/university-of-washington-study-shows-most-divorces-happen-in-march-august/. Accessed Aug. 31, 2018.

We are not permitted to offer legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal 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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Succeeding as an Entrepreneur

There’s an age-old insight that’s often cited when referencing entrepreneurship: “90 percent of startups fail.” In fact, that may not be the case. According to new research by Cambridge Associates — assessing more than 27,000 venture-backed startups — the average failure rate was 60 percent.1

It could be that new technologies and the ability to reach a target niche of online customers have allowed businesses more options and opportunities for success. However, it still takes a certain spark to become a successful business owner.

We often recommend that clients work longer before considering retirement, if possible. This not only helps accrue a larger nest egg but also helps avoid boredom that could set in with a longer retirement. For this reason, many people consider working in an entirely different area than their regular career — including starting their own business.

Winning Traits

According to Eva Chan and Jane Lee, who founded Launch Pop and are focused on helping jumpstart other entrepreneurs, there are a few basic categories of new business owners, each offering certain personality traits beneficial to startup success. Examples include:2

  • The Detail Master: The consummate detail-oriented person — good at addressing each small detail but at risk of getting bogged down and moving too slowly.
  • The Hulk: A real go-getter — he or she may have the passion and drive to get a business up and running but could find managing people and details a bit challenging.
  • The Pivot Master: Adept at recognizing and acting on timely opportunities but may not spend enough time planning and testing the business idea.

Ultimately, the people who seem to have the greatest long-term entrepreneurial success tend to have a mix of these characteristics.

Winning Skills

In addition to the right combination of personality traits, successful entrepreneurs wear many hats and use many skillsets to get a business off the ground. The most important skills include:3

Sales: The ability to find target customers and keep them coming back. According to serial entrepreneur Mark Cuban: “Sales cures all. There’s never been a company that succeeded without sales.”4

Planning: Entrepreneurs need to be realistic about what they can take on and accomplish with a new business; this requires establishing a budget and timeline for reaching specific goals.

Communication: Business owners must speak the required language to a variety of audiences, from vendors and customers to bankers and investors.

Customer Focus: Whether their experiences are positive or unpleasant, a business owner must be focused on customer wants, needs and what will keep them coming back.

Curiosity: They must be curious about what their competitors are doing, what technology and processes could help streamline their entity, and they must use their imagination to help differentiate their business.

Entrepreneurs who are concerned that personality and skills aren’t enough to get their business up and running can consider taking an online class on startups from the likes of Facebook’s Mark Zuckerberg or Dropbox co-founder and CEO Drew Houston. These two are among the instructors of Y Combinator’s Startup School in Silicon Valley, which offers a 10-week online course for high-growth startup founders.5

Winning Tactics

Entrepreneurs ready to unveil that new venture can keep in mind the following marketing tactics:6

  • Color improves brand recognition by up to 80 percent.
  • Email marketing has a 122 percent median return on investment — four times higher than social media, direct mail or paid search.
  • Content marketing yields three times more leads than paid searches.
  • By 2021, mobile e-commerce will account for 54 percent of all online sales.

Interested in starting your own business but don’t have a novel idea to start one? Take a critical look at the businesses around you. From a customer perspective, what are they doing wrong? How could you do it better? One young entrepreneur started her own fitness center after hating a yoga class. She combined the types of exercise she did like into a new fitness boutique — and found an audience who agreed.7

Combining these talents, skills and tactics could lead to a winning formula for those entrepreneurs willing to put in the work to succeed — and may spark some ideas if you’re looking for a new venture in retirement.

 

Content prepared by Kara Stefan Communications.

1 Ashley Crouch. Forbes. July 12, 2018. “How To Leverage Your Personality For Success, According To The Creators Of Launch Pop.” https://www.forbes.com/sites/ashleycrouch/2018/07/12/how-to-leverage-your-personality-for-success-according-to-launch-pop/#49c7608a708f. Accessed Aug. 23, 2018.

2 Ibid.

3 Murray Newlands. Regions Bank. “5 Most Important Business Skills Every Entrepreneur Must Have.” https://www.regions.com/Insights/Small-Business/Operations/5-Most-Important-Skills-Every-Entreprenuer-Must-Have. Accessed Aug. 23, 2018.

4 Minda Zetlin. Inc. Aug. 23, 2017. “Mark Cuban Says This Is the 1 Mistake New Entrepreneurs Always Make.” https://www.inc.com/minda-zetlin/mark-cuban-sanyin-siang-entrepreneurship-mistakes-funding-vcs-sales.html?cid=sf01001. Accessed Aug. 23, 2018.

5 Sean Wise. Inc. Aug. 23, 2018. “5 Online Courses Every Entrepreneur Should Take (and How to Get the Most Out of Them).” https://www.inc.com/sean-wise/5-online-courses-every-entrepreneur-should-take-and-how-to-get-most-out-of-them.html?cid=sf01001. Accessed Aug. 23, 2018.

6 Gabriel Shaoolian. Forbes. Aug. 10, 2018. “10 Marketing, Web Design & Branding Statistics To Help You Prioritize Business Growth Initiatives.” https://www.forbes.com/sites/gabrielshaoolian/2018/08/10/10-marketing-web-design-branding-statistics-to-help-you-prioritize-business-growth-initiatives/amp/. Accessed Aug. 23, 2018.

7 Jeff Bercovici. Inc. September 2018. “This Entrepreneur Built One of America’s Fastest-Growing Fitness Companies for People Who Hate Yoga.” https://www.inc.com/magazine/201809/jeff-bercovici/2018-inc-5000-y7-studio-yoga-fitness-trends.html?cid=sf01001. Accessed Aug. 23, 2018.

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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Travel Ideas: Travelers Benefit from Industry Trends

Many areas of the U.S. experienced sweltering heat throughout this past summer. As the seasons change, now is a great time to take a vacation and enjoy the cooler air.

Plan to get away

If you’re looking to avoid the crowds, consider locations not necessarily off the beaten path but adjacent to popular hotspots. For example, if you’re hankering for a colorful autumn trip to New England to catch the leaf show, consider places like Washington, Connecticut, or Bernardsville in Northern New Jersey.1

Book the details

When booking flights and accommodations, online travel agencies, such as Travelocity or Kayak, can be a good way to compare rates. However, once you decide on a venue it may be a better idea to book directly with the airline or hotel. This makes you an official customer of the company (instead of the online agency), which can help garner a bit more responsiveness and personal attention, especially if something goes wrong. Also, industry-rate parity rules require online agencies publish a rate also available at the airline or hotel.2

Budget for travel

Whether you’re still working or already retired, getting away for brief or extended trip is an effective way to break up daily living and get a fresh perspective on life, so it’s important to include a travel line item in your annual budget. You can put a little aside each month, earmark annual windfalls such as tax refunds or use retirement plan required minimum distributions (RMDs) to indulge in the occasional break away from home. If we can help you create a budget that includes regular travel ventures, please give us a call.

Find home away from home

The upscale hotel industry has experienced a fair amount of disruption in recent years, to the benefit of travelers. For example, Airbnb, which started out as a cheap alternative to your average motel, has evolved from air mattress accommodations to competition at the luxury level. The upscale market comprises well-known hoteliers such as Hyatt and the Four Seasons, small boutique hotels and, now, Airbnb Plus — a new high-end service that vets homes and hosts to ensure a high-quality experience.3

Perhaps due to the influence of the shared economy, even upscale travelers appear to be seeking the comforts and local experiences traditionally associated with renting a home. High-end hotels are making similar accommodations by integrating their restaurants into the lobby space to create a more social atmosphere and stocking rooms with regional amenities, such as locally sourced soap.4

Go green on the road

In keeping with the trends toward green innovation and environmental sustainability, some high-end hotels have begun to pare down standard luxury amenities. While rooms may still be big and the service exquisite, sustainable details may include organic, minimalist aesthetics, and low-waste and energy-efficient utilities such as filtered tap water.5

Savor the relaxation

The satisfying glow of staying at a high-end yet environmentally conscious hotel may continue if you incorporate outdoor activities as part of your vacation itinerary. Research shows that spending time in nature has been linked to a reduction in stress, anxiety and depression.6 After all, if your travel plans are designed to provide rest and relaxation, a bit of nature alongside your luxury accommodations could be a prime combination ticket.

 

Content prepared by Kara Stefan Communications.

1 Forbes. Aug. 17, 2018. “19 Perfect Destinations To Welcome Fall.” https://www.forbes.com/sites/forbestravelguide/2018/08/17/19-perfect-destinations-to-welcome-fall/#2b62697158eb. Accessed Aug. 17, 2018.

2 David Lund. Hospitality.net. Aug. 15, 2018. “Hospitality Financial leadership – Why Your average Joe Should never Use an OTA – and…Why He Will Never Stop Using Them!” https://www.hospitalitynet.org/opinion/4089603.html. Accessed Aug. 16, 2018.

3 Aislyn Greene. AFAR. Feb. 22, 2018. “Everything You Need to Know About Airbnb’s New High-End Services.” https://www.afar.com/magazine/everything-you-need-to-know-about-airbnbs-new-high-end-services. Accessed Aug. 16, 2018.

4 Joe Pinsker. The Atlantic. Sept. 21, 2017. “How the Hotel Industry Views Its Future (and Airbnb).” https://www.theatlantic.com/business/archive/2017/09/hotels-magazine-industry-airbnb/540525/. Accessed Aug. 16, 2018.

5 Nicole Martinez. Urban Land Magazine. July 2, 2018. “How Two New Florida Hotel Concepts Are Competing with Airbnb, Marriott.” https://urbanland.uli.org/development-business/two-new-florida-hotel-concepts-competing-airbnb-marriott/. Accessed Aug. 16, 2018.

6 Harvard Medical School. July 1, 2018. “Sour mood getting you down? Get back to nature.” https://www.health.harvard.edu/mind-and-mood/sour-mood-getting-you-down-get-back-to-nature. Accessed Aug. 16, 2018.

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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Where Americans Stand on Personal Debt

On one hand, low interest rates are good for those borrowing money. On the other hand, easy cash can lead to excess debt — a place far too many Americans find themselves. 

Today, the median credit card debt is $2,000 per person, the median student loan debt is around $9,000 and the median mortgage debt is just less than $60,000.1 Concerningly, today’s pre-retirees appear to be carrying more debt and are less financially secure than pre-retirees 25 years ago.2

One of debt’s biggest disadvantages is that it can hamper savings efforts. It’s difficult to spread discretionary income between savings and debt, and difficult to get ahead if you’re constantly making high payments on loans. Insurance can potentially help in a couple of ways. First, through the use of an annuity, it’s possible to use a portion of your current retirement assets to help create future retirement income, allowing you to use your current income to help pay off debt.

Second, life insurance policies with a death benefit provide an extra layer of financial confidence for loved ones, helping to pay off any debts should you pass away before they are paid. If you would like to discuss insurance options related to your current debt load and long-term retirement income goals, please give us a call.

Studies show that more than a third (38 percent) of Americans use their tax refunds to help pay off debt.3 This may be a good plan, since it often can be difficult to make extra payments toward debt when you’re on a tight budget. However, it’s also a good idea to try to balance your tax withholdings to match your tax liability by the end of the year. In doing so, you may be able to squeeze out some extra income each month to apply toward debt.

One way people may fall into debt is through medical expenses. As high-deductible health plans and co-insurance policies rise in popularity, even those with coverage can find themselves with insurmountable health care bills. Interestingly, while we might associate medical debt with older people who tend to have more serious health conditions, it turns out that the millennial generation tends to rack up more medical debt than other demographics.4

One in six Americans say they’ve had past-due medical bills show up on their credit report, even though 53 percent of those bills are less than $600 each.5 Physicians and hospitals, unlike traditional lenders, typically do not directly report unpaid bills to credit reporting agencies. These bills only affect your credit score when reported by a collection agency, so it’s important to negotiate a payment plan with the medical provider so that the debt doesn’t move into collection procedures.6

Another credit report misperception: Carrying a balance will improve your credit score.7 Instead, you can improve your score by using a credit card and paying the balance off on time each month.

One strategy to help budget your money and pay off bills is the 50-20-30 rule, which allots 50 percent of your income for needs, 30 percent for wants and 20 percent for savings. Here is a further breakdown of how to allocate available after-tax income:8

  • 50% — rent/mortgage, food, bills, minimum debt payments and other essentials
  • 30% — dining, entertainment, etc.
  • 20% — savings, investment, etc.

 

 


Content prepared by Kara Stefan Communications.

1 Andrew DePietro. CBS News. Feb. 21, 2017. “The No. 1 thing Americans plan to do with their tax refund.” https://www.cbsnews.com/news/the-no-1-thing-americans-plan-to-do-with-their-tax-refund/. Accessed Aug. 10, 2018.

2 Annamaria Lusardi, Olivia S. Mitchell and Noemi Oggero. Pension Research Council. September 2017. “Debt and Financial Vulnerability on the Verge of Retirement.” https://pensionresearchcouncil.wharton.upenn.edu/wp-content/uploads/2017/09/WP-2017-15-Lusardi-et-al.pdf. Accessed Aug. 10, 2018.

3 Andrew DePietro. CBS News. Feb. 21, 2017. “The No. 1 thing Americans plan to do with their tax refund.” https://www.cbsnews.com/news/the-no-1-thing-americans-plan-to-do-with-their-tax-refund/. Accessed Aug. 10, 2018.

4 Laura Santhanam. PBS. July 26, 2018. “Millennials rack up the most medical debt, and more frequently.” https://www.pbs.org/newshour/health/millennials-rack-up-the-most-medical-debt-and-more-frequently. Accessed Aug. 10, 2018.

5 Ibid.

6 Donna Rosato. Consumer Reports. July 26, 2018. “What Medical Debt Does to Your Credit Score.” https://www.consumerreports.org/credit-scores-reports/what-medical-debt-does-to-your-credit-score/. Accessed Aug. 10, 2018.

7 Riley Griffin. Financial Advisor Magazine. July 2, 2018. “Millions of Americans Make a Costly Mistake When Paying Credit Card Bills.” https://www.fa-mag.com/news/millions-of-americans-make-a-costly-mistake-when-paying-credit-card-bills-39544.html. Accessed Aug. 10, 2018.

8 Julie Compton. NBC News. July 6, 2018. “How the 50-20-30 rule can help you get out of debt and save money.” https://www.nbcnews.com/better/business/how-50-20-30-rule-can-help-you-get-out-ncna889476?cid=sm_npd_nn_tw_ma. Accessed Aug. 10, 2018.

Annuities are insurance contracts designed for retirement or other long-term needs. They provide guarantees of principal and credited interest, subject to surrender charges. Annuity and life insurance guarantees and protections are backed by the financial strength and claims-paying ability of the issuing insurance carrier.

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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How Life Varies in Different States

Different strokes for different folks. One of the many advantages of living in the United States is there are so many different places to live. You can opt for the mountains or live by the sea. You can live in open country and rural farmlands, bustling cities or remote forested areas. Hot, cold or temperate climates — whatever suits your style of living. The U.S. has it all. Here’s a sampling of how different life can be depending on where you choose to live.

Take home prices and incomes, for example. In Washington, D.C., the median home price is about $620,000, and the median income is $71,000. However, in Kentucky those numbers are $190,000 and $45,000, respectively. In California, the median home price is $549,000, and the median income is $66,637, while in Massachusetts, the median home price is $470,000 and the median salary is $111,453.1

However, one’s style of living may not be so much about how much you earn as how much you bring home. To that end, it’s worth considering state taxes. Currently, Alaska has the lowest effective state and local tax at 5.67 percent. The highest is Illinois at 14.89 percent. Fifteen states have rates above 12 percent, largely in the central and northeast areas of the country, including Mississippi, Michigan, Iowa, New York, Pennsylvania and Connecticut.2

Beyond the income you earn and the amount available after taxes, a key factor is how far your money goes in your local area. Apparently, the three U.S. cities with highest cost of living are Waterbury, Connecticut; Babylon, New York; and Mountain View, California.3

When planning for retirement, you may want to think about relocating if you’re concerned that your lifestyle will drop considerably after you stop earning a paycheck. Some people sell their costly homes in large cities or other expensive areas of the country to relocate somewhere much cheaper, where they can use those home equity proceeds to enhance their retirement lifestyle. If you’d like some assistance in assessing your retirement income strategy and how insurance products may fit into that strategy, we’re here to help.

If politics drive your state of choice, it might be worth checking out which way people in certain areas lean. According to an assessment by The Economist, Mesa, Arizona is the most conservative city in America. The most liberal? San Francisco.4

This year’s rankings from U.S. News & World Report revealed that North Dakota comes in at No. 1 for the best quality of life, largely due to the state’s natural beauty and small, villagelike communities. The top five is rounded out with Minnesota, Wisconsin, New Hampshire and South Dakota. If you’ve noticed they all have strikingly colder climates, the theory goes that cold weather creates tighter-knit communities — and the quality of our relationships is what makes for a high quality of life. Interestingly, the five worst states for quality of life all have dense populations: Texas, Illinois, Indiana, New Jersey and California.5

Researchers from the Institute for Health Metrics and Evaluation published a study in JAMA with findings on the states with the best and worst statistics for disease and mortality. It turns out that people born in Hawaii are most likely to have a long life expectancy, compared to all other states. West Virginia, Mississippi and Alabama rank highest in people dying between the ages of 20 and 55, while New York, California and Minnesota ranked the lowest in this category.6

 

Content prepared by Kara Stefan Communications.

1 Ian Salisbury. Money Magazine. Aug. 3, 2018. “This Map Shows the Salary You’d Need to Buy an Average Home in Every State.” http://time.com/money/5355518/home-price-salary-every-state/. Accessed Aug. 3, 2018.

2 John S Kiernan. WalletHub.com. March 3, 2018. “2018 Tax Rates by State.” https://wallethub.com/edu/best-worst-states-to-be-a-taxpayer/2416/. Aug. 3, 2018.

3 Expatistan. “Cost of living in United States.” https://www.expatistan.com/cost-of-living/country/united-states. Accessed Aug. 3, 2018.

4 Forbes. “The most and least conservative cities in America.” https://www.forbes.com/pictures/gfii45img/most-conservative-no-1/#3bc06b62792a. Accessed Aug. 3, 2018.

5 Grace Donnelley. Fortune. Feb. 28, 2018. “These States Offer the Best and Worst Quality of Life.” http://fortune.com/2018/02/28/states-best-worst-quality-of-life/. Accessed Aug. 3, 2018.

6 Jacqueline Howard. CNN. April 11, 2018. “The states where disease and death are highest: A visual guide.” https://www.cnn.com/2018/04/10/health/states-life-expectancy-study/index.html. Accessed Aug. 3, 2018.

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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New Medical Research

Chemotherapy may be highly effective in treating cancer, but its side effects also can be a nightmare for patients. Medical researchers have long tried to determine how to successfully cure cancer without chemotherapy, and a recent study yielded some very positive results.1

In the largest-ever study on breast cancer treatment, funded by the National Cancer Institute and other groups, researchers discovered that the majority of women with the most common form of early-stage breast cancer can safely skip chemotherapy without hurting their chances of beating the disease. In most cases, surgery and hormone therapy have proven to be successful alternatives. This revelation could spare up to 70,000 U.S. patients a year from the ordeal of chemotherapy.2

Even if a patient survives the disease, medical expenses may still lead to serious financial problems. Advances in genetic screening help bring awareness to those predisposed for certain medical conditions.3 This can be frightening, but also empowering, allowing greater control of related components such as planning financially for the future. If you’re concerned about the long-term costs associated with a serious medical condition, we’re always happy to help you explore various insurance options.

For example, supplemental insurance plans may help offset the burden of high out-of-pocket expenses including:4

  • Hospital indemnity insurance
  • Critical illness insurance
  • Disease-specific insurance (e.g., cancer, heart attack, stroke)

Researchers recently discovered that pancreatic cancer patients whose disease had not spread had a longer life expectancy when taking a four-drug combination instead of a traditional single cancer drug. While there is no effective screening for pancreatic cancer, about 15 percent of patients diagnosed early are good candidates for surgery and this promising new form of treatment.5

Of course, the best way to save money on serious medical conditions is to not develop one in the first place. On that front, many studies suggest diet and exercise meant to reduce the risk of cancer and other diseases, including the World Cancer Research Fund’s suggestion to avoid processed meats and alcohol. Meats such as bacon, salami, hot dogs and some sausages are correlated with an increased risk of colorectal cancer, while alcohol is linked to a variety of different cancers, including mouth, throat, esophagus, liver, breast, stomach and colon.6

If you really want to be vigilant about avoiding developing a serious disease, consider joining the 7.3 million vegetarians in the U.S. — more than 3 percent of the population. Another 22.8 million people — approximately 10 percent of U.S. adults — eat a mostly vegetarian diet. Not only can this strategy help reduce the risk of developing heart disease, cancer and diabetes, but vegetarians (no meat, poultry or fish) and vegans (no meat, poultry, fish or dairy) also tend to enjoy high energy levels, shiny hair, strong nails and less fitful sleep.7

 

Content prepared by Kara Stefan Communications.

1 CBS News. June 4, 2018. “Many breast cancer patients can safely skip chemotherapy, major study finds.” https://www.cbsnews.com/news/many-breast-cancer-patients-can-safely-skip-chemotherapy-major-study-finds/. Accessed July 13, 2018.

2 Ibid.

3 Dr. Lisa Albaid. Los Angeles Times. July 5, 2018. “Genetic screening can inform women of their breast and ovarian cancer risks.” http://www.latimes.com/socal/daily-pilot/opinion/tn-dpt-me-commentary-genes-20180705-story.html. Accessed July 13, 2018.

4 Mila Araujo. The Balance. March 16, 2018. “The Basics of a Supplemental Health Insurance Plan.” https://www.thebalance.com/the-basics-of-a-supplemental-health-insurance-plan-2645664. Accessed July 13, 2018.

5 CBS News. June 4, 2018. “Study finds rare advance in treatment of pancreatic cancer.” https://www.cbsnews.com/news/study-finds-rare-advance-in-treatment-of-pancreatic-cancer/. Accessed July 13, 2018.

6 Jamie Ducharme. Time. May 26, 2018. “Cancer Group Recommends Ditching Bacon and Booze to Stay Cancer-Free.” http://time.com/5292566/world-cancer-research-fund-report/. Accessed July 13, 2018.

7 Newsweek. “Vegetarian diet: This is what happens to your body when you go vegetarian.” http://www.newsweek.com/vegetarian-happen-body-go-vegan-health-fitness-list-slideshow-1023675. Accessed July 12, 2018.

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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A ‘Rising Tide’ Lifts Women

There’s an old saying: A rising tide lifts all boats. Applied to the economy, this means that general improvements could benefit all participants within the economy. The same appears to be true for women.1

As the U.S. economy continues to grow, there is an influx of money available for small business startups. This is great news for female entrepreneurs struggling to find startup capital.2

The rollback of certain provisions of the Dodd-Frank Act has given many community banks and credit unions the latitude to lend more to local business owners, and the Small Business Administration is noting more loans.3 While men appear to still have greater access to funds from traditional lenders than women, the gap is finally narrowing (34 percent versus 31 percent).4

We hope that each of our clients has been able to take advantage of the strong economy, job market and real estate opportunities driven by today’s rising tide. Higher income and assets can help us raise our standard of living as well as provide a more secure financial future. If you need assistance determining ways to help protect your retirement income from being at risk during changing tides, call us to discuss strategies for securing your retirement income for the future.

Interestingly, women also are taking advantage of some of the political changes taking place today. Many see our current president as more of a businessman than a politician, allowing the field to open for a wide variety of people to run for office. A past survey revealed women who felt unqualified to run for office were less likely to “go for it” than men who believed the same. However, today’s political arena has presented a rising tide: 529 women are running for national congressional offices in the midterm elections; 78 are running for governor.5

Recent issues — such as gender income equality, increased demand for diversity and workplace harassment — have raised not just the tide, but also raised the bar for appropriate treatment of women. According to one legal consulting firm, the current landscape has created a positive environment for female lawyers to negotiate pay raises on par with their male peers.6

In many ways, the past year’s trials and tribulations have generated a new movement, leading some media outlets to label 2018 as the “Year of the Woman.” As more women are engaged in the workforce, not only have productivity and profits increased, but we’ve seen increased overall skill levels and an entirely new platform of complementary skills. Perhaps most significantly though, the rising tide of women in the workforce has raised overall wages — even for men.7

Content prepared by Kara Stefan Communications.

1 Kimberly Weisul. Inc. May 30, 2018. “7 Signs That the Investment Landscape for Women Is Finally Changing.” https://www.inc.com/kimberly-weisul/seven-signs-that-women-entrepreneurs-are-about-to-rake-in-the-dough.html?cid=sf01001. Accessed July 10, 2018.

2 Ibid.

3 Rieva Lesonsky. Small Business Trends. July 2, 2018. “Exclusive Interview: SBA Administrator Linda McMahon Says Small Business Options Improving.” https://smallbiztrends.com/2018/07/linda-mcmahon-is-optimistic-small-business.html. Accessed July 10, 2018.

4 Annie Pilon. Small Business Trends. June 18, 2018. “20 Amazing Stats on Women Entrepreneurs from SCORE.” https://smallbiztrends.com/2018/06/women-entrepreneurs-statistics.html. Accessed July 10, 2018.

5 Margaret Talbot. The New Yorker. April 18, 2018. “The women running in the midterms during the Trump era.” https://www.newyorker.com/news/news-desk/2018-midterm-elections-women-candidates-trump. Accessed July 10, 2018.

6 Miriam Rozen. The American Lawyer. June 12, 2018. “Seasoned Women Lawyers Gaining Leverage in Salary Talks.” https://www.law.com/americanlawyer/2018/06/12/you-go-girl-seasoned-women-lawyers-gain-leverage-in-salary-talks/?slreturn=20180610192104. Accessed July 10, 2018.

7 Amanda Weinstein. Harvard Business Review. Jan. 31, 2018. “When More Women Join the Workforce, Wages Rise — Including for Men.” https://hbr.org/2018/01/when-more-women-join-the-workforce-wages-rise-including-for-men. Accessed July 10, 2018.

Neither our firm nor its agents or representatives may give tax advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 

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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All About Bots

Even if you aren’t familiar with bots, you’ve likely come into contact with many of these forms of artificial intelligence, or AI. Bots are applications that perform automated tasks such as setting alarms, relaying weather forecasts or conducting online search for travel deals. Many smart phones come equipped with personal-service bots, such as the iPhone’s Siri.1

AI is ramping up in a number of ways that affect consumers’ lives — even when we don’t realize it. For example, Amazon uses AI for automated shopping suggestions and Bank of America utilizes online customer service chatbots.2

There are many areas in which a bot can either deploy specific instructions or assess historical data and make recommendations. However, there are still areas in our lives that can benefit from being handled by human interaction, such as financial decisions. We believe it’s important to work with a trusted and experienced financial professional who can offer guidance tailored to your circumstances.

For example, there’s more to buying an insurance contract than just knowing your age and expected lifespan. Many factors — such as leaving money to your loved ones, retirement income needs and goals for the future — come into play. If you are looking for some human interaction to help you assess your retirement income needs, give us a call.

As for bots, there’s a lot of chatter online and in the news about their misuse in how they spread misinformation and influence the way people think and consequently act. For example, the social media website Twitter is reported to have a preponderance of bots used as fake accounts to generate acrimony among users. According to one report, bot accounts make up 9 to 15 percent of all Twitter users. The company deletes these accounts once they are identified and has increased measures to prevent bots from signing up to the tune of around 50,000 new bot accounts a day.3

Over at Facebook, they are combating the bot-manipulated spread of fake news by using their own automated systems. Unfortunately, there are a few flaws with using AI to combat AI. For example, in the days leading up to the Fourth of July, the newspaper in a small Texas town posted a series of passages from the U.S. Declaration of Independence on its Facebook page.4

One post that cited potentially offensive-sounding language (“He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation”) was identified as hate speech and thereby removed by Facebook bots. Eventually the mistake was rectified with an apology from Facebook.5

An interesting twist in the bot phenomenon is some companies want their users to believe they’ve developed the latest bot technology, but in reality, they’ve determined it’s cheaper to hire humans to do the work rather than invest in AI capabilities. In effect, they’ve hired humans to imitate bot technology instead of the other way around. For example, a couple of startup firms that feature calendar-scheduling services actually employ humans to pretend to be chatbots for this mind-numbing task. Some of the workers were so bored by the task they reported looking forward to being replaced by actual bots.6

Content prepared by Kara Stefan Communications.

1 Sarah Mitroff. CNET. May 5, 2016. “What is a bot? Here’s everything you need to know.” https://www.cnet.com/how-to/what-is-a-bot/. Accessed July 8, 2018.

2 Ben Dickson. TheNextWeb.com. July 5, 2018. “7 surprising companies where you can work on cutting-edge AI technology.” https://thenextweb.com/artificial-intelligence/2018/07/05/companies-work-ai-technology/. Accessed July 8, 2018.

3 Maya Kosoff. Vanity Fair. June 27, 2018. “Can Twitter Purge Its Bots Without Killing Its Bottom Line?” https://www.vanityfair.com/news/2018/06/can-jack-dorsey-twitter-purge-bots-without-killing-bottom-line. Accessed July 8, 2018.

4 Simon Sharwood. The Register. July 5, 2018. “US Declaration of Independence labeled hate speech by Facebook bots.” https://www.theregister.co.uk/2018/07/05/us_declaration_of_independence_labeled_hate_speech_by_facebook_bots/. Accessed July 8, 2018.

5 Ibid.

6 Olivia Solon. The Guardian. July 6, 2018. “The rise of ‘pseudo-AI’: how tech firms quietly use humans to do bots’ work.” https://www.theguardian.com/technology/2018/jul/06/artificial-intelligence-ai-humans-bots-tech-companies. Accessed July 8, 2018.

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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