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Job Trends

For decades, young people were told college was the surest route to financial success as an adult. Get a degree, get a good job.

However, this formula seems to be broken. During the recession, jobs for recent college graduates were scarce, causing many to continue their higher education and sink deeper into student loan debt. With minimal wage hikes for some white-collar professions, not all college degrees are paying for themselves. In many cases, they can even be a liability.1

On the other hand, skilled trade industries continue to elevate their wages due to a shortage of available workers. Today’s high school graduates may find well-paying jobs with benefits right off the bat, particularly if they have motivation and well-rounded resumes. Perhaps most importantly, they must be willing to work hard and learn a new skill. These workers may not earn as much as a college graduate throughout their lifespan, but there’s also nothing stopping them from going to college later.2

The employment market continues to change, behooving job seekers to be more flexible with goals and expectations. For example, the construction and health/personal-care industries are expected to account for a third of all new jobs through 2022.3

Some cities in lesser-populated areas of the country are actively recruiting people to relocate and fill jobs in specialized labor industries. The city of Hamilton, Ohio, offers a $5,000 moving bonus to help pay student loans, while Grant County, Indiana, offers $5,000 toward buying a home.4

The trend is also positive for older workers. A new survey revealed 77 percent of employers believe workers age 50 and up as are more engaged in their job and offer greater experience and range of skills than their younger counterparts.5

The growing demand for older workers may be an important factor in your retirement planning. It may not be necessary to fully fund your nest egg and then retire “cold turkey.” Instead, many employers are starting to understand the value of flexible employment, both from an overhead cost to a productivity perspective. Therefore, older workers may be able to negotiate lower pay to supplement retirement income — delaying full retirement — via flexible work arrangements or contract employment.6

Some older people have also taken advantage of new community and online classes teaching coding and computer programming skills. Some are developing new skills to start second careers or use in volunteer opportunities. Learning a new hobby, such as making personalized electronic cards for family members, can help aging brains stay sharp.7

If you’d like help reviewing your retirement income strategy and discussing ways to incorporate earned income, please don’t hesitate to give us a call.


Content prepared by Kara Stefan Communications.

1 Kavya Vaghul. The Washington Center for Equitable Growth. “The student loan crisis is fueled by a weak labor market.” https://equitablegrowth.org/the-student-loan-crisis-is-fueled-by-a-weak-labor-market/. Accessed June 16, 2018.

2  Jon Marcus. The Hechinger Report. April 23, 2018. “High-paying jobs go begging while high school grads line up for bachelor’s degrees.” http://hechingerreport.org/high-paying-jobs-go-begging-while-high-school-grads-line-up-for-bachelors-degrees/. Accessed June 16, 2018.

3 Ibid.

4 David Harrison and Shayndi Raice. The Wall Street Journal. April 30, 2018. ” How Bad Is the Labor Shortage? Cities Will Pay You to Move There.” https://www.wsj.com/articles/how-bad-is-the-labor-shortage-cities-will-pay-you-to-move-there-1525102030. Accessed June 16, 2018.

5 Joanna Hughes. The Job Network. “Hiring Trends Show Older Workers in Demand.” https://www.thejobnetwork.com/hiring-trends-show-older-workers-in-demand/. Accessed June 16, 2018.

6 Eric Titner. The Job Network. “Trends that older workers need to watch for in 2018.” https://www.thejobnetwork.com/trends-that-older-workers-need-to-watch-for-in-2018/. Accessed June 16, 2018.

7 Vivian Marino. The New York Times. Sep. 22, 2017. “Some People Learn to Code in Their 60s, 70s or 80s.” https://www.nytimes.com/2017/09/22/your-money/some-people-learn-to-code-in-their-60s-70s-or-80s.html?utm_sq=fs1lzdnev7. Accessed June 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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Long-Term Care Update

Long-term care continues to be a challenging issue in the U.S. It appears the second wave of baby boomers is even more determined to “age at home,” while at the same time, they are more likely to suffer from multiple chronic conditions, such as heart disease and diabetes.1 This confluence of factors makes it all the more difficult to come up with solutions for long-term care.

To complicate matters, insurers that offer long-term care (LTC) insurance have become more particular about offering coverage. According to the American Association for Long-Term Care Insurance, more people are being denied coverage across the spectrum of age brackets. The following shows the percentage of applicants declined coverage in 2017:2

  • Below age 50: 20%
  • 50- to 59-year-olds: 22%
  • 60- to 69-year-olds: 30%
  • 70- to 79-year-olds: 44%

Not only have sales of traditional LTC policies decreased over the last 17 years (currently one-tenth of the sales in 2000), but there are now far fewer insurers in the marketplace.3

Although we often spend a lot of time on planning for retirement, we don’t always devote substantial time and resources to how to pay for potential long-term care expenses. We should. Like it or not, long-term care is expensive and likely to take up a large portion of our household budgets later in life. Some insurance products such as life insurance and annuities provide various options you may want to consider. We’d be happy to discuss your options based on your unique situation.

People are living longer but continue to develop health conditions that require caregiving as they age. As a result, LTC premiums continue to rise. However, traditional LTC premiums are considered a medical expense. For an individual who itemizes tax deductions, medical expenses can be deductible if certain qualifications are met. The amount of LTC insurance premiums that can be treated as a medical expense is subject to limitations based on the insured’s age.4

Also consider activating a chronic illness or long-term care rider that may be attached to your term life or permanent life insurance policy, as these riders can assist with the costs of long-term care should the need arise. Note that the ability to use this option is subject to specific contract terms. Also, benefits are generally treated as accelerated death benefits, which will reduce the overall death benefit of your life insurance policy.

Pets have LTC needs, too

One of the greatest comforts for seniors who find themselves more and more homebound is the company of a pet. As such, it’s important to consider the long-term care needs of your pets as they grow older as well. Dogs are considered geriatric at age 10, but a vet may start talking about senior care around age seven, particularly for large-breed dogs. These changes may involve nutrition, dental care and exercise needs and even running lab work to check for potential age-related problems.5

While outdoor cats are subject to environmental hazards that cannot be controlled by a vet, indoor cats generally have longer lifespans. Felines are considered to be entering old age at about 9 years old, with the average lifespan from 12 to 18 years. In fact, trends in veterinary medicine are attributed to longer lifespans in cats these days.6

Unfortunately, the older we get, the more difficult it is to get to regular checkups for ourselves, let alone our pets. One vet facility in the Tampa Bay-area of Florida offers a mobile clinic that brings veterinarian services to pet-owning seniors, whether living at home or in an assisted living facility.7

Also, remember to keep your pets in mind when you write or update your will. It’s important to have conversations with family and friends to help ensure that your pets will have a loving home should you pass away before them.

 

Content prepared by Kara Stefan Communications.

1 Susannah Luthi. Modern Healthcare. June 5, 2018. “Azar touts new SNF pay model for making long-term care sustainable.” http://www.modernhealthcare.com/article/20180605/NEWS/180609963. Accessed June 9, 2018.

2 American Association for Long-Term Care Insurance. May 10, 2018. “It’s Harder To Health Qualify For Long-Term Care Insurance, Start Earlier.” http://www.aaltci.org/news/long-term-care-insurance-association-news/its-harder-to-health-qualify-for-long-term-care-insurance-start-earlier. Accessed June 15, 2018.

3 Greg Iacurci. Investment News. May 11, 2018. “Insurers becoming more stringent with long-term-care policies.” http://www.investmentnews.com/article/20180511/FREE/180519978/insurers-becoming-more-stringent-with-long-term-care-policies. Accessed June 10, 2018.

4 American Association for Long-Term Care Insurance. “Long-Term Care Insurance Tax-Deductibility Rules – LTC Tax Rules.” http://www.aaltci.org/long-term-care-insurance/learning-center/tax-for-business.php. Accessed June 15, 2018.

5 Joey Turner. Globalanimal.org. June 6, 2018. “Tail-wagging tips on caring for older pets.” https://www.globalanimal.org/2018/06/06/how-to-care-for-older-pets/44957/. Accessed June 10, 2018.

6 Ibid.

7 Kelly Ring. Fox News 13. June 5, 2018. “Mobile service brings veterinary care to senior pet owners.” http://www.fox13news.com/news/what-s-right-with-tampa-bay/mobile-service-brings-veterinary-car-to-senior-pet-owners. Accessed June 9, 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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Various Types of “Economies”

As recently as five years ago, few people had heard of emerging businesses like Airbnb and Uber that allow proprietors to share their personal residences and cars to generate income. This business model is now commonly referred to as the “sharing economy.” 1

However, just as capitalism morphs, so does the concept of sharing. For example, some Uber drivers actually lease an upscale car to charge higher fares that compete with luxury driving services.2

The Great Recession played a hand in encouraging unemployed workers to find innovative sources of income when jobs were scarce, and the sharing economy has been seen as influential in our overall economy’s recovery. It’s worth considering how we can better prepare ourselves for potential economic declines via job innovation, vigilant savings habits and protecting a portion of our retirement assets through guaranteed insurance products. If you’d like help devising a strategy using a variety of insurance products to help you work toward your long-term retirement income goals, please call us to schedule a meeting.

In addition to the sharing economy, today’s world is home to a wide array of economic varieties, including:

Sharing Economy

As mentioned, this model focuses on sharing or renting under-utilized assets. One of the primary concerns with this model is trusting others to take care of your personal assets. Some proprietors require an upfront deposit to help defray the cost of breakage or stolen goods. Insurance companies also have gotten into this business by developing policies for reimbursement.3

On-Demand Economy

This model focuses on providing goods and services on an as-needed basis. For example, in situations where a short-term rental is cheaper than buying — such as owning a car in a large metropolitan city — it can be more cost effective and convenient to use Uber transportation rather than own a car. This is true in expensive cities including New York City, Chicago, Los Angeles, and others, particularly when including expenses like gas and insurance. 4

Peer Economy

This economic model is based on the creation of products, delivery of services, funding and more by peer-to-peer (P2P) networks. These peer-lending platforms can help bolster economic progress, particularly in a rising interest-rate environment. For example, a small business seeking capital may be able to use an online P2P lending platform that matches borrowers to lenders. This can help a business owner acquire a less expensive loan more quickly than through a traditional financial institution.5

Crowd Economy

The crowd economy enlists the larger population or a subset to generate funding, information, resources and more. This particularly interesting phenomenon has infinite applications. For example, the city of Akron, Ohio, is providing CPR training to the general public in hopes that crowd-sourcing certain emergency service skills will lead to more victims getting immediate help until paramedics arrive.6 Crowd-sourcing also is a good way to find undiscovered talent. Instead of hiring an advertising agency to produce promotional artwork for an annual film festival, the organizers may hold an open competition for the public, tapping local artists whose talent may otherwise go unnoticed.7

Statistics indicate that the sharing economy and its various iterations are producing big revenues. A recent U.S. study found that on-demand workers generated more than $110 billion in the 15 largest metropolitan areas, including New York City, Los Angeles, Miami, Chicago, San Francisco and Washington, D.C.8

 

Content prepared by Kara Stefan Communications.

1 April Rinne. World Economic Forum. Dec. 13, 2017. “What exactly is the sharing economy?” https://www.weforum.org/agenda/2017/12/when-is-sharing-not-really-sharing/. Accessed June 2, 2018.

2 Ibid.

3 Matthew Wall. BBC News. June 1, 2018. “‘I bought my mum a flat just by renting out my camera kit.'” https://www.bbc.com/news/business-44301183. Accessed June 2, 2018.

4 Megan Rose Dickey. TechCrunch.com. May 30, 2018. “Here’s where it’s cheaper to take an Uber than to own a car.” https://techcrunch.com/2018/05/30/heres-where-its-cheaper-to-take-an-uber-than-to-own-a-car/. Accessed June 2, 2018.

5 Craig Asano and Michael King. The Globe and Mail. May 30, 2018. “Peer-to-peer lending will help small businesses stay afloat.” https://www.theglobeandmail.com/business/commentary/article-peer-to-peer-lending-will-help-small-businesses-stay-afloat/. Accessed June 2, 2018.

6 Doug Livingston. Akron Beacon Journal. May 31, 2018. “Akron is ‘crowd-sourcing’ CPR.” https://www.ohio.com/akron/news/akron-is-crowd-sourcing-cpr. Accessed June 2, 2018.

7 Michael Beiermeister. WBKB11.com. June 1, 2018. “Thunder Bay Film Society Crowdsourcing Cover Art for 2018 Sunrise 45 Film Festival.” http://www.wbkb11.com/thunder-bay-film-society-crowdsourcing-cover-art-for-2018-sunrise-45-film-festival. Accessed June 2, 2018.

8 Benjamin Mann. JD Supra. May 24, 2018. “The Gigs Get Bigger: Recent Data Shows the On-Demand Economy is Growing Into New Areas.” https://www.jdsupra.com/legalnews/the-gigs-get-bigger-recent-data-shows-85361/. Accessed June 2, 2018.

 

Guarantees and protections provided by insurance products including annuities are backed by the financial strength and claims-paying ability of the issuing insurer.

 

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

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

 

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Family Business Considerations

 

Family businesses that manage to survive generation after generation leave not only a family legacy, but also the potential for tremendous wealth. For example, Arkansas-based Walmart is presently the largest business in the world in terms of revenue, earning more than $485 billion in 2017. In 1992, founder Sam Walton passed away and left his retail empire in the hands of seven heirs.1

Presently, the Walton family business outranks the wealth of the Koch Industries energy group, which is the second-largest privately owned company. Next in line in terms of individual wealth of business founders are Jeff Bezos (Amazon), Bill Gates (Microsoft) and Warren Buffett (Berkshire Hathaway).2

These are just samples of the scope of wealth an entrepreneur can amass. However, most small business owners do well just to keep their heads above water. For those who would like to pass their business on to family members, there are basic business management strategies to keep in mind.3 If we can help you develop an insurance strategy to help protect your business, your key executive staff or your legacy, please give us a call.

On a day-to-day basis, successful family-owned entities generally follow some well-honed principles to keep family politics out of the business. For example, the patriarch and his four daughters who run the six-generation family-owned business D.G. Yuengling & Son Inc. have many varying opinions. To keep the business humming, they agree that it’s OK to disagree: “Diversity of opinion is what keeps family businesses strong and spurs collaboration.”4

It’s also a good idea to keep family and business separate. This means scheduling regular, in-office staff meetings so that family dinners can focus on just that — family. It’s important, too, that everyone has distinct roles and responsibilities. It’s difficult enough when duties overlap among workers, but in a family business this can lead to an all-out sibling brawl. When jobs and job titles are doled out to family members based on their natural strengths and interests, each employee can take ownership and be held accountable, as well as enjoy the pride and satisfaction for their individual contributions.5

For some families, entering the family business may take time. Even beyond a formal education, it may be important to first seek non-family job experience before “boomeranging” back to the fold. This scenario worked well for the three generations that run Cleaver Farm and Home — a building-supply distributor in Kansas. The business has managed to expand as each generation of family members took charge. For the current generation of brothers, launching their own career paths allowed them to return to their family roots and give their own children the sort of childhood they enjoyed.6

Bear in mind, too, that younger generations can bring new skill sets to the family business.

For example, a 17-year-old prodigy whose family has owned a metalworking company since the late Middle Ages has introduced technology to the fold. Anton Klingspor added exponential growth in his family’s business through various technological tools like LinkedIn Lead Builder and Facebook Workplace to improve team collaboration and communication.7

As a business grows larger and more complex, the family may need to look outside the fold for specific skills and experience. It’s important to engage knowledgeable professionals and establish formal business and family governance systems to help manage risks and enjoy a more sustainable foundation for future success.8

Content prepared by Kara Stefan Communications.

1 Lianna Brinded. Quartz. May 14, 2018. “The richest family in the world beat the Koch brothers, Bezos, Gates, and Buffett.” https://qz.com/1276872/the-richest-people-in-the-world-walton-family-koch-brothers-bill-gates-jeff-bezos-warren-buffett/. Accessed May 28, 2018.

2 Ibid.

3 Hilary Sheinbaum. Forbes. April 30, 2018. “How The 4 Yuengling Sisters Manage The Family Business.” https://www.forbes.com/sites/hilarysheinbaum/2018/04/30/how-4-sisters-manage-the-family-business-and-still-get-along-and-you-can-too/#198c9d0262ca. Accessed May 28, 2018.

4 Ibid.

5 Amy George. Inc. Jan. 17, 2018. “How to Build a Family Business That Lasts for Generations, According to Bravo TV Star Tabatha Coffey.” https://www.inc.com/amy-george/how-to-build-a-family-business-that-lasts-for-generations-according-to-bravo-tv-star-tabatha-coffey.html. Accessed May 28, 2018.

6 Raney Rapp. Farm Talk. May 15, 2018. “Cleaver Farm and Home celebrates three generations of family business.” http://www.farmtalknewspaper.com/news/cleaver-farm-and-home-celebrates-three-generations-of-family-business/article_7796c170-584b-11e8-8ed6-27bc3ee8f20b.html. Accessed May 28, 2018.

7 John White. Inc. Sept. 7, 2017. “How This 17-Year-Old Used an Entrepreneurial Mindset to Grow His Family Business to $300-Million.” https://www.inc.com/john-white/lessons-from-a-gen-zer-on-how-to-grow-a-200-year-o.html. Accessed May 28, 2018.

8 Marleen Dielemen. Forbes. May 25, 2018. “4 Types Of Family Businesses You’ll See In Asia And How To Govern Each Effectively.” https://www.forbes.com/sites/nusbusinessschool/2018/05/25/4-types-of-family-businesses-youll-see-in-asia-and-how-to-govern-each-effectively/#5147434e659f. Accessed May 28, 2018.

Guarantees and protections provided by insurance products are backed by the financial strength and claims-paying ability of the issuing insurer.

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

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

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The Psychology of Economics

 

Countries with a longstanding track record of economic stability and security tend to have the happiest citizens, reports journalist Dan Buettner, who has studied what makes people happy. Education and health care are two primary reasons why, combining to create an upwardly mobile lifecycle.1

Mothers with higher education levels tend to have fewer children, and those children tend to be healthier and more productive adults, Buettner says. In turn, they often become successful parents and make more well-informed voting decisions. This enables the next generation to make even higher social and economic gains.2

With this in mind, it’s worth considering how we can make education and health care more affordable within our own households. College tuition is expected to continue experiencing higher inflation levels than most other household expenses.3 Health insurance and medical inflation is expected to outpace overall economic inflation this year for the first time since 2010.4 If you’re looking for ways to help prepare for future health care and higher education costs for you and your loved ones, please set up a time to visit with us.

Another interesting, emerging economic trend is that of human workers versus automation. While we can debate the merits of cost savings versus human judgment, there’s an underlying theory that technology is not necessarily the key to future economic growth. In fact, in a departure from encouraging more students to study the STEM disciplines (science, technology, engineering and math), there’s a new movement to better understand the drivers of human behavior and how we might interact with technology in the future.5

If you look at recent trends in consumer-driven technology, there is a discernible shift away from high-tech products and services. For example, independent bookstores and print books are experiencing a revival after years of competing with the rising popularity of online bookstores and eReaders.6 And, remarkably, instant-print cameras have become fashionable again and experienced a 30 percent growth in sales in 2017.7

Content prepared by Kara Stefan Communications.

1 Knowledge@Wharton. March 2, 2018. “What Can We Learn from the World’s Happiest People?” http://knowledge.wharton.upenn.edu/article/blue-zones-happiness/. Accessed May 18, 2018.

2 Ibid.

3 Venessa Wong. CNBC. March 17, 2017. “In 18 years, a college degree could cost about $500,000.” https://www.cnbc.com/2017/03/17/in-18-years-a-college-degree-could-cost-about-500000.html. Accessed June 7, 2018.

4 Fortune. Feb. 15, 2018. “Healthcare Prices to Outpace Inflation for the First Time Since 2010.http://fortune.com/2018/02/15/healthcare-prices/. Accessed May 18, 2018.

5 Shon Burton. MarketWatch. May 31, 2018. “Opinion: Coding skills won’t save your job – but the humanities will.” https://www.marketwatch.com/story/coding-skills-wont-save-your-job-but-the-humanities-will-2018-05-17. Accessed May 18, 2018.

6 Alex Preston. The Guardian. May 14, 2018. “How real books have trumped ebooks.” https://www.theguardian.com/books/2017/may/14/how-real-books-trumped-ebooks-publishing-revival. Accessed June 4, 2018.

7 Chaim Pikarski. Twice. Feb. 20, 2018. “What’s driving the instant photo revival?” https://www.twice.com/blog/whats-driving-instant-print-photo-revival. Accessed May 18, 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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For Some Retirees, Home is Where the Debt is

Today’s pre-retirees and retirees tend to have far more debt than those in years past. In addition to factors like credit card payments and medical expenses, this generation is seeing the effects of higher home prices and easily obtained low down-payment mortgages in the early 2000s.1

Between 2003 and 2016, Americans 60 and older nearly tripled their household debt — composed of mortgages, home equity loans, auto loans, student loans and credit cards.2 According to the Employee Benefit Research Institute, households headed by a person age 75 or older held an average debt load of $36,757 in 2016.3

If you’re still carrying a fair amount of debt and nearing retirement, we can help you review your household budget to help plan for a more confident retirement. Please give us a call if you’d like to schedule a meeting.

One of the challenges in the new tax law is the interest-cap deduction on mortgage loan payments, meaning homeowners with high mortgage balances may be required under the new law to deduct less mortgage interest. The mortgage limit on new homes purchased is $750,000, while the limit on mortgages purchased before Dec. 15, 2017, remains $1 million.These numbers are important if downsizing is part of your debt-reduction strategy.4

Another major contributor to debt is the rising cost of sending children to college. Of the 3.5 million Americans who owe an average of $24,000 in Parent PLUS student loan debt, about half of them are parents older than age 50. Worse yet, the number of parents with student loans is rising at a faster rate than students.5 Unfortunately, all those debt payments could be used to save for retirement.

The No. 1 reason individuals file for bankruptcy is medical debt.6 Whether nearing retirement or already there, unexpected health care costs can seriously curtail retirement funds. It’s a good idea to work with a financial professional to develop a strategy for paying potential health care costs down the road.

 

Content created by Kara Stefan Communications.

1 Rebecca Moore. PlanAdvisor. Jan. 10, 2018. “Debt Causing Financial Vulnerability for Pre-Retirees.” https://www.planadviser.com/debt-causing-financial-vulnerability-pre-retirees/. Accessed May 11, 2018.

2 Michelle Singletary. The Washington Post. Feb. 26, 2018. “Should you retire your debt before retiring?” https://www.washingtonpost.com/news/get-there/wp/2018/02/26/should-you-retire-your-debt-before-retiring/?noredirect=on&utm_term=.d3d26dc8cda2. Accessed May 11, 2018.

3 Annie Nova. CNBC. May 9, 2018. “Almost half of Americans don’t expect to have enough money to retire comfortably — but there’s some good news.https://www.cnbc.com/2018/05/09/almost-half-of-americans-dont-expect-to-have-enough-money-to-retire-comfortably–but-theres-some-good-news.html. Accessed May 11, 2018.

4 Anthony P. Curatola. MarketWatch. May 10, 2018. “Watch for these pitfalls if you want to deduct mortgage interest under the new tax law.” https://www.marketwatch.com/story/watch-out-for-these-pitfalls-if-you-want-to-deduct-mortgage-interest-under-the-new-tax-law-2018-05-09. Accessed May 11, 2018.

5 Kathy A. Bolten. Des Moines Register. April 2, 2018. “Thousands of Iowa parents are going into debt to pay for their kids’ college (and they probably shouldn’t).” https://features.desmoinesregister.com/news/parent-plus-student-loans-college-debt/. Accessed May 11, 2018.

6 Sharon Epperson. CNBC. Nov. 16, 2017. “Don’t let surprise medical bills drain your retirement.” https://www.cnbc.com/2017/11/15/dont-let-surprise-medical-bills-drain-your-retirement.html. Accessed May 11, 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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Medicare News

Earlier this year, Congress passed a last-minute budget deal that included provisions affecting Medicare benefits. Specifically, one provision will permit certain therapies to continue beyond the previous caps, subject to conditions. All therapy (physical, speech and occupational) must continue to be classified as “reasonable and necessary to treat the individual’s illness or injury.” 1

 

There had been ambiguity in the past as to whether Medicare would continue paying for sessions without measurable improvement. Now, however, therapy sessions may continue per the provider’s recommendation. Retroactive for this year, once therapy billing has reached $2,010 (about 20 sessions at $100 per visit), a provider must add an extra billing code to ensure payment. However, if total expenses subsequently pass a $3,000 threshold, they may be subject to medical reviews and audits.2

 

The federal budget agreement also accelerated the share-cost reduction during the so-called “doughnut hole” period in Medicare drug plans. Starting one year earlier — in 2019 — Medicare beneficiaries will pay 25 percent (instead of 35 percent) of drug expenses once they reach the stated annual limit (currently $3,750 in 2018).3

 

Medicare rules are always changing. It’s a lot like trying to make retirement planning decisions throughout your career — the bar is a moving target. One potential solution is to over-plan and overfund your share of expected health care expenses in retirement. If you’re looking for ways to help plan for possible increased health care expenses in the future, contact us.  We’d be happy to discuss your options based on your unique situation.

 

In April, the Centers for Medicare & Medicaid Services (CMS) issued a final ruling with updates for Medicare Advantage (MA) plans to provide more choices. Specifically, the rule expands the definition of “primarily health-related” benefits to cover products and services not considered direct medical treatments. Examples include air conditioners for people with asthma, healthy groceries, rides to medical appointments and home-delivered meals. Paid benefits also may include home modifications for mobility and balance, such as installing a wheelchair ramp or bathroom grab bars. Plans may offer benefits to help pay home aides who help with dressing, eating and other personal, daily-living care. MA plans must submit their bids for CMS approval by June 4 to begin offering these benefits in 2019.4

 

The new CMS rule also includes initiatives to address the national prescription opioid epidemic. Specifically, Medicare Part D plans now limit new opioid prescriptions for acute pain management to no more than a seven-day supply. The Overutilization Monitoring System (OMS) is expanding, increasing pharmacist accountability for patients already taking opioids.5

 

The CMS rule is part of a hardline approach to combating the opioid crisis. The White House has established a Safer Prescribing Plan initiative with specific goals that include cutting nationwide opioid prescription fills by one-third within three years.6

 

Content created by Kara Stefan Communications.

 

1 Judith Graham. Kaiser Health News. March 29, 2018. “Scrutinizing Medicare Coverage For Physical, Occupational And Speech Therapy.” https://khn.org/news/scrutinizing-medicare-coverage-for-physical-occupational-and-speech-therapy/. Accessed May 4, 2018.

2 Ibid.

3 Susan Jaffe. Kaiser Health News. March 14, 2018. “Lifting Therapy Caps Is A Load Off Medicare Patients’ Shoulders.” https://khn.org/news/lifting-therapy-caps-proves-a-load-off-medicare-patients-shoulders/. Accessed May 4, 2018.

4 Bruce Japsen. Forbes. April 5, 2018. “How Trump’s New Medicare Rules Boost Amazon And Walmart.” https://www.forbes.com/sites/brucejapsen/2018/04/05/how-trumps-new-medicare-rules-boost-amazon-and-walmart/#600a42d6786c. Accessed May 4, 2018.

5 CMS. Fact Sheets. April 2, 2018. “2019 Medicare Advantage and Part D Rate Announcement and Call Letter.” https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Fact-sheets-items/2018-04-02-2.html. Accessed May 4, 2018.

6 The White House. Fact Sheets. March 19, 2018. “President Donald J. Trump’s Initiative to Stop Opioid Abuse and Reduce Drug Supply and Demand.” https://www.whitehouse.gov/briefings-statements/president-donald-j-trumps-initiative-stop-opioid-abuse-reduce-drug-supply-demand/. Accessed May 4, 2018.

 

We are able to provide you with information but not guidance or advice related to Medicare. 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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Consider Having a Backup Plan

When looking ahead in anticipation of Social Security benefits, many people expect to wait until an average age of 66 to make a claim.1

 

However, Nationwide Retirement Institute’s fifth annual Social Security survey found many retirees start drawing Social Security at the earliest possible age of 622 — frequently the result of being laid off or health issues.

 

Thirty-six percent of respondents reported health problems got in the way of living the retirement they expected, and of those, 80 percent say health problems occurred as many as five or more years earlier than expected.3

 

This tells us something we already know but are constantly reminded of: Life does not always go as planned. Many financial professionals tell their clients one of the most effective ways to help ensure enough income throughout retirement is to continue working through their 60s. This may not be preferable, but it’s an option.

 

Others may plan to work longer but end up retiring for reasons beyond their control. It’s good to have a contingency plan. As an independent financial services firm, we help people create retirement income strategies using a variety of insurance products to custom suit their needs and objectives. Give us a call if you’re interested in finding out more.

 

It’s important to have a backup plan because there are many challenges for people working longer. For example, as jobs move further into technology, artificial intelligence and automation, new job skills are constantly required. It’s good to challenge the brain, but young college graduates typically have a firmer grasp on today and tomorrow’s technology — it’s a steep learning curve.4

 

A Washington Post article recently referred to the “gray ceiling.” As women have faced the “glass ceiling” as an obstacle to career advancement, age discrimination is sometimes manifested in the hiring, continued employment, development and advancement of older workers.5

 

Fortunately, recent workforce trends have made it easier for older workers to continue earning income past traditional retirement age. Many employers have embraced the work model of the “gig economy,” staffing up (and down) as needed with independent contractors. Older workers have proven to be well-suited for this type of employment due to their laser-like experience in certain roles, reliability and stability. A recent study suggests older white-collar professionals are driving the growing demand for gig workers among businesses in certain industries.6

 

While employers may embrace the gig economy to add and drop staff as needed, remember workers can do the same. Establishing yourself as a freelancer or independent contractor gives you the freedom to work as much or as little as needed.7 You can take off a month to go on vacation, or six months to fly south for the winter. You can also take on work only when you have big bills coming up, like homeowner’s insurance or property taxes.

 

A 2017 survey found one-third of future retirees are planning part-time work to provide at least 25 percent of their household income. Besides income, many gig workers ages 51 to 70 say a primary reason for freelancing is simply to stay active in retirement.8

 

Content prepared by Kara Stefan Communications.

 

1 Nationwide Retirement Institute. April 2018. “Social Security 5th Annual Consumer Survey.” https://nationwidefinancial.com/media/pdf/NFM-17422AO.pdf. Accessed May 10, 2018.

2 Ibid.

3 Ibid.

4 James Manyika, Susan Lund, Michael Chui, Jacques Bughin, Jonathan Woetzel, Parul Batra, Ryan Ko and Saurabh Sanghvi. McKinsey Global Institute. November 2017. “What the future of work will mean for jobs, skills, and wages.” https://www.mckinsey.com/featured-insights/future-of-organizations-and-work/what-the-future-of-work-will-mean-for-jobs-skills-and-wages#part%205. Accessed May 1, 2018.

5 Susan Williams. Booming Encore. March 2018. “Older Workers Watch Your Head – Breaking Through the Gray Ceiling.” http://www.boomingencore.com/older-workers-watch-head-breaking-gray-ceiling/. Accessed May 1, 2018.

6 Valerie Bolden-Barrett. HR Dive. Oct. 3, 2017. “Older workers — not millennials — are driving the gig economy.” https://www.hrdive.com/news/older-workers-not-millennials-are-driving-the-gig-economy/506349/. Accessed May 1, 2018.

7 Elaine Pofeldt. Forbes. Aug. 30, 2017. “Why Older Workers Are Embracing the Gig Economy.” https://www.forbes.com/sites/elainepofeldt/2017/08/30/why-older-workers-are-embracing-the-gig-economy/#642f904a42ce. Accessed May 1, 2018.

8 Ibid.

 

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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Technology Pros and Cons

Not all innovations are initially successful. Think about the driverless car. It sounded like a great idea — helping the disabled and elderly retain some independence — until the first pedestrian fatality involving a driverless car occurred in Arizona this year.1

Driverless technology may be a work in progress, but it may still have advantages. After all, the technology could reduce the number of cars on the road and their greenhouse gas emissions. America’s parking lots consume more land than Delaware and Rhode Island combined, and the average privately owned car in the U.S. is used only 5 percent of the time, sitting parked the rest of the time.

We deal with the pros and cons of new technology every day. We love our smartphones, often relying on them too much — like when the battery goes dead and GPS navigation disappears. After all, who carries a map in their car these days? These lessons can be applied to other aspects of life, like carrying insurance for an item we no longer use, such as a boat or a lost piece of jewelry. Take stock and see if there are goods, services or habits you do not need and are costing you money. Sometimes our conveniences create more problems than they solve. 

While you’re in the mood to take stock, consider giving us a call to review your current retirement income strategy. We will be happy to help you make sure it aligns with your goals for retirement.

Social media is another area that has revealed both pros and cons. It has been a wonderful invention for keeping family, friends and colleagues in touch, regardless of location. Then Facebook announced that 87 million users’ data was used by a political consulting and data brokerage firm.3 One of the data scandal’s most interesting revelations was, while a social media user may carefully control who sees his or her personal information, any time we friend, follow or otherwise link with other people exposes information to marketers who target the followed individuals.4

Other “conveniences” also may have questionable implications. Amazon recently announced it was adding an option to deliver packages to a purchaser’s locked car, in addition to the in-home delivery service launched last year. The new car delivery service uses an Amazon Key app with connection technologies common in new vehicles.5 Trusting a delivery person with access to your empty home or car — what possibly could go wrong?

Despite constant concerns about privacy and security in technology and personal data, one of the most irritating issues is keeping track of passwords. It seems we are constantly inundated with requests to change them, so much so it’s nearly impossible to keep up with which websites have which passwords. While most people recognize the need to exercise caution, two of the most common passwords used today are still “123456” and “Password.”6

Content prepared by Kara Stefan Communications.

1 Anita Balakrishnan and Deirdre Bosa. CNBC. March 19, 2018. “Uber halts self-driving car tests after first known death of a pedestrian.” https://www.cnbc.com/2018/03/19/uber-self-driving-car-fatality-halts-testing-in-all-cities-report-says.html. Accessed April 27, 2018. 

2 Ely Razin. Forbes. March 11, 2018. “How Driverless Cars Could Disrupt The Real Estate Industry.” https://www.forbes.com/sites/elyrazin/2018/03/11/how-driverless-cars-could-disrupt-the-real-estate-industry/#61039ab013c1. Accessed April 27, 2018. 

3 Nadeem Badshah. The Guardian. April 8, 2018. “Facebook to contact 87 million users affected by data breach.” https://www.theguardian.com/technology/2018/apr/08/facebook-to-contact-the-87-million-users-affected-by-data-breach. Accessed April 27, 2018. 

4 Knowledge@Wharton. March 22, 2018. “Why the Cambridge Analytica Scandal Is a Watershed Moment for Social Media.” http://knowledge.wharton.upenn.edu/article/fallout-cambridge-analytica/. Accessed April 27, 2018. 

5 Andrew J. Hawkins. The Verge. April 24, 2018. “Amazon will now deliver packages to the trunk of your car.” https://www.theverge.com/2018/4/24/17261744/amazon-package-delivery-car-trunk-gm-volvo. Accessed April 27, 2018. 

6 Matt Burgess. Wired. Jan. 2, 2018. “In 2018, it’s finally time to ditch those bad tech habits.” http://www.wired.co.uk/article/technology-resolutions-2018-improve-digital. Accessed April 27, 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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Notes on U.S. Infrastructure

The American Society of Civil Engineers has given the U.S. an overall infrastructure grade of D+. Throughout the next decade, it will take more than $4.5 trillion to fix our aging infrastructure — including upgrades to roads, mass transit, wastewater treatment plants and the electrical grid.1

We’ve reached the mission-critical stage. One industry analyst observed, “We’re at the point where our infrastructure is becoming an impediment to productivity and long-term economic growth.”2

The idea of national infrastructure may remind us of personal retirement preparation. If you are still working and thinking about retirement options, consider your own “infrastructure” situation. First, are you considering relocating or downsizing, or are you committed to aging in your own home? If you prefer the latter, it’s a good idea to check out your home from top to bottom to see whether you need any major repairs or maintenance while you’re still earning a paycheck.

This inspection should include considering a new roof, checking for mold buildup in your crawl space and researching new windows or other energy-efficient features that can help lower your utility bills. Even replacing older appliances could impact your household budget once you’re living on a fixed income.

Given our dramatic weather pattern swings, we should also prepare for the possibility of a natural disaster that could affect our daily living. Consider how you might plan for a long-term disruption in power or clean water supplies, such as installing a generator, solar panels, tiles and/or a battery pack. While it may seem farfetched, remember that the citizens of Puerto Rico probably never thought they would have to adapt for long-term power outages, as seen after Hurricane Maria.3

One way the U.S. is trying to address some of these issues is by incorporating green stormwater infrastructure (GSI) in sewer overflow control and integrated wet-weather plans. The idea is to evaluate the performance of GSI systems for future development.4

With all the discussion about funding at the federal level, one little-known fact is how much infrastructure is controlled at the local level. In fact, 40 percent of the nation’s bridges and 46 percent of all public roads are owned and maintained by counties. Furthermore, counties help fund one-third of the nation’s airports and 78 percent of public transportation programs.5

The news isn’t all bad. According to the World Economic Forum, the U.S. international ranking for overall infrastructure quality improved from 25th to 12th place last year out of 138 countries. However, when it comes to specific categories, we show mixed results — the U.S. ranks second in road infrastructure spending but ranks 60th for road safety. The U.S. also lags behind other developed countries when it comes to infrastructure resilience and future sustainability.6

Content prepared by Kara Stefan Communications.

1 Merrill Lynch. 2018. “Getting a Bigger Bang for the Infrastructure Buck.” https://www.ml.com/articles/getting-a-bigger-bang-from-the-infrastructure-buck.html#financial-research-and-insights. Accessed April 20, 2018.

2 Ibid.

3 Camilla Domonoske. NPR. April 18, 2018. “Puerto Rico Loses Power — Again.” https://www.npr.org/sections/thetwo-way/2018/04/18/603569966/puerto-rico-loses-power-again. Accessed April 20, 2018.

4 Water Environment Federation. April 4, 2018. “Data analyses confirm GSI value in overflow control.” http://stormwater.wef.org/2018/04/data-analyses-confirm-gsi-value-overflow-control/. Accessed April 20, 2018.

5 Mary Scott Nabers. Infrastructure USA. April 9, 2018. “County government — a critical component of America’s greatness.” https://www.infrastructureusa.org/county-government-a-critical-component-of-americas-greatness/. Accessed April 20, 2018.

6 Hiba Baroud. PBS News Hour. Feb. 18, 2018. “Measuring up U.S. infrastructure against other countries.” https://www.pbs.org/newshour/nation/measuring-up-u-s-infrastructure-against-other-countries. Accessed April 20, 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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