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Medicare Reform Outlook: Uncertain

With a new administration in the nation’s highest office, there is growing debate about Medicare reform.

The federal program, which helps provide health insurance to those over 65 and certain younger people with disabilities, is partially funded by participant premiums and a 1.45 percent payroll tax, matched by employers. Yet, it routinely exceeds its funding sources, according to researcher Philip Moeller.1

Lawmakers, lobbyists and entities have set forth various proposals to modernize Medicare into a program that could essentially pay for itself. One recommendation is a premium support system, in which the federal government would pay a set amount for each Medicare beneficiary toward the purchase of a health insurance plan; this is often referred to as a defined contribution or voucher approach.2

Whether the Medicare program changes, we’re prepared to help you make adjustments to your retirement income strategy to help with future health care expenses; give us a call.

Yet, the outlook on possible Medicare changes is uncertain as different voices compete on how to fix the program. One of the most prominent advocates of Medicare reform, House Speaker Paul Ryan, has set forth a plan that provides premium support, guaranteed coverage options, competitive bidding among plans and higher assistance for seniors with lower incomes or greater health care needs.3

The Committee for Economic Development has proposed similar reform incentives to expand competition among Medicare Advantage plans. Under the committee plan, seniors would receive a geographically benchmarked premium subsidy and pay for the balance of Advantage plans based on the coverage they prefer among a range of competitive options.4

As Congress considers reforming health care for the entire nation, some of the latest proposals include many of the Medicare provisions already in force through the Affordable Care Act. These include preventative screenings for certain conditions and penalizing hospitals for poor-quality care while rewarding providers for care that results in improved health outcomes.5

Despite increasing calls for Medicare reform by the Republican party, the newly installed president campaigned on a platform to leave the program as is.6 Moving forward, whether this issue heats up as a party divider remains to be seen.

Content prepared by Kara Stefan Communications

1 Philip Moeller. PBS. Nov. 16, 2016. “Column: Who’s paying the true cost of Medicare?” http://www.pbs.org/newshour/making-sense/column-whos-paying-the-true-cost-of-medicare/. Accessed Feb. 5, 2017.

2 Gretchen Jacobson and Tricia Neuman. Kaiser Family Foundation. Jul. 19, 2016. “Turning Medicare Into a Premium Support System: Frequently Asked Questions.” http://kff.org/medicare/issue-brief/turning-medicare-into-a-premium-support-system-frequently-asked-questions/. Accessed Feb. 5, 2017.

3 Paul Ryan. PaulRyan.house.gov. Jan. 30, 2017. “Medicare.” http://paulryan.house.gov/issues/issue/?IssueID=9969\. Accessed Feb. 5, 2017.

4 Committee for Economic Development. Oct. 2016. “Modernizing Medicare.” https://www.ced.org/reports/single/modernizing-medicare. Accessed Feb. 5, 2017.

5 Bruce Japsen. Forbes. Jan. 29, 2017. “As GOP Backs Off ACA Repeal, Obama’s Medicare Reforms Remain.” http://www.forbes.com/sites/brucejapsen/2017/01/29/as-gop-backs-off-full-aca-repeal-obamas-medicare-reforms-stand/print/. Accessed Feb. 5, 2017.

6 Eric Pianin. The Fiscal Times. Dec. 4, 2016. “Pence Dampens Ryan’s Call for Major Medicare Overhaul Next Year.” http://www.thefiscaltimes.com/2016/12/04/Pence-Dampens-Ryan-s-Call-Major-Medicare-Overhaul-Next-Year. Accessed Feb. 5, 2017.

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.

Higher Education Cost Inflation Helps Lead to Legitimizing of MOOCs

Almost 40 percent of high school graduates accepted for college admission ultimately do not attend the following year. The reason? College is expensive: The average college graduate emerged with about $30,000 in student loans in 2015.1

So you’ve got to wonder, is it worth it to graduate with that much debt, especially these days when job security can be a challenge? Parents all over America may ask themselves this question. After all, for decades a college education has been considered the key to getting a good job and pursuing an upper-middle-class lifestyle. But with stagnant wages, many college students may not find jobs that pay enough to cover those student loans while still paving the way for their financial future.

Thankfully, there is a movement to open up access to college education. One online education phenomenon that has exploded in popularity since 2011 is the MOOC, or “massive open online course.” They started out being free, short courses available to anyone with access to the internet. Today, many prestigious universities offer these courses, including Caltech, Harvard, MIT, Stanford, Oxford and the Sorbonne.2

With such widespread, even global, acceptance, many in education are pondering whether MOOCs offer a solution to two common problems with our higher education system: access and cost. Today, 93 percent of the global population lacks the ability to receive a higher education for geographic or economic reasons, and MOOCs can help to avoid conflict with both.3

There are several reasons why college tuition has increased so much. One is that individual states used to cover up to two-thirds of state-funded university budgets. Now they cover only about half, which means parents, students and student loans must cover that deficit. A second reason is that more money is allocated to pay for non-academic staff at colleges and universities; twice as much as in the past. A big part of that represents what many believe to be unreasonably high compensation for top university administrators, especially relative to what professors are paid.4

This may be why MOOCs have become so popular in recent years; there is less administrative and bureaucratic involvement in these courses. Between 2015 and the end of 2016, the number of users who registered for at least one massive open online course grew from 35 million to 58 million worldwide.5 More than 700 universities now offer 6,850 online courses, with business and technology being the most popular subjects. In fact, what started out as a free education movement has now added paid certificate and degree programs. This shift in business model is beginning to redefine MOOCs’ role in the education marketplace.6

Even campus-based colleges have joined the online education bandwagon. Today, most courses comprise online and classroom lectures; face-to-face and Facetime meetings with professors; online interactions with instructors and classmates for study sessions and projects; social media discussions and other web-related activities.7

As for the implications of completing a degree online, what was once a heavy stigma may be changing as more employers get their own experiences with online coursework. In fact, research has found that many online graduates from respected brick-and-mortar universities have the same chances of finding a job, getting a raise or being promoted as students who earned their degree on campus.8

Of course, any education technology, innovation or tool will have its own set of drawbacks and limits. However, it is promising to see universities adjusting the traditional model to help make college more affordable and accessible. Whether your child or grandchild prefers a traditional college education or is open to nontraditional types like MOOCs, we can help you create strategies utilizing insurance products to help put college within financial reach.

Content prepared by Kara Stefan Communications

1 Robert Ubell. IEEE Spectrum. Jan. 23, 2017. “Can MOOCs Cure the Tuition Epidemic?” http://spectrum.ieee.org/tech-talk/at-work/education/can-moocs-cure-the-tuition-epidemic. Accessed Jan. 31, 2017.

2 Rosamond Hutt. We Forum. Dec. 13, 2016. “You can now take a course at the world’s best universities for free.” https://www.weforum.org/agenda/2016/12/you-can-now-take-a-course-at-the-world-s-best-universities-for-free-here-s-how-that-happened. Accessed Jan. 31, 2017.

3 Diane Luckow. Simon Frazier University. Jan. 3, 2017. “SFU MOOC a new route for students.” https://www.sfu.ca/sfunews/stories/2017/sfu-mooc-new-route-for-students.html. Accessed Jan. 31, 2017.

4Robert Ubell. IEEE Spectrum. Jan. 23, 2017. “Can MOOCs Cure the Tuition Epidemic?” http://spectrum.ieee.org/tech-talk/at-work/education/can-moocs-cure-the-tuition-epidemic. Accessed Jan. 31, 2017.

5 Natalie Marsh. The PIE News. Jan. 4, 2017. “MOOC users reach 58 million globally.” https://thepienews.com/news/edu-tech/mooc-users-reach-58-million-globally/. Accessed Jan. 31, 2017.

6 Ibid.

7 Robert Ubell. IEEE Spectrum. Jan. 30, 2017. “What Do Employers Really Think About Online Degrees?” http://spectrum.ieee.org/tech-talk/at-work/education/what-do-employers-really-think-about-online-degrees. Accessed Jan. 31, 2017.

8 Ibid.

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

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

U.S. Housing Market Update

The 30-year fixed mortgage rate rose from 3.5 percent to 4.25 percent after the presidential election. While higher rates might deter potential homebuyers — particularly young first-timers — residential real estate is expected to continue being a seller’s market throughout 2017.1

Meanwhile, the fate of Fannie Mae and Freddie Mac remains unclear. These government-sponsored enterprises have been managed by a federal agency since the housing slump in 2008. Trump’s pick for Treasury secretary, Steven Mnuchin, has indicated that his top priority is to privatize these mortgage giants.2

The real estate market bodes particularly well for retirees who have paid off their mortgage. While many retirees prefer to stay put in their longtime homes, it may be worth considering downsizing to a smaller place that is easier to maintain. Today’s market provides a wide range of potential homebuyers willing to pay top dollar for homes in areas with low inventory.3

Many retirees looking to downsize are in the same boat as other homebuyers: Plenty of motivation but not enough options from which to choose. In this situation, many are considering new construction, including the lower-cost “tiny house” trend.4

Those in the market for a new home can even custom build a smaller home designed to make life easier as they age, featuring no stairs, wide hallways, easily accessed storage areas and some of the new smart-home technological conveniences to help them stay in touch with loved ones.5

For those who haven’t retired, or aren’t prepared to downsize just yet, one possibility may be purchasing a smaller home now and using it for rental income until they’re ready.6

Be sure to consult with a professional real estate agent or broker to help decide what’s best for your unique situation.

Content prepared by Kara Stefan Communications

1 Diana Olick. CNBC. Dec. 13, 2016. “How rising mortgage rates may not matter for housing.” http://www.cnbc.com/2016/12/13/how-rising-rates-may-not-matter-for-housing.html. Accessed Feb. 8, 2017.

2 Holden Lewis. Bankrate.com. 2017. “What’s in store for housing market in 2017?” http://www.bankrate.com/finance/mortgages/housing-trends-1.aspx. Accessed Jan. 24, 2017.

3 Yuqing Pan. Realtor.com. Jan. 16, 2017. “Sold Out: These 10 U.S. Cities Have the Biggest Housing Shortages.” http://www.realtor.com/news/trends/top-10-housing-markets-constrained-by-tight-inventory/. Accessed Jan. 24, 2017.

4 Kiplinger. 2017. “10 Great Tiny Homes for Retirees.” http://www.kiplinger.com/slideshow/retirement/T010-S001-great-tiny-homes-for-retirees/index.html. Accessed Jan. 24, 2017.

5 TD Bank. Realtor.com. Sept. 18, 2015. “Is New Construction for You?” http://www.realtor.com/advice/buy/is-new-construction-for-you/. Accessed Jan. 24, 2017.

6 Bankrate. Aug. 2, 2016. “Funding retirement with rental income.” http://www.bankrate.com/finance/retirement/funding-retirement-with-rental-income-1.aspx. Accessed Feb. 22, 2017.

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

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

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Prescription for Retail Therapy

How much do you use of what you buy? Research reveals that Americans throw away 30 percent to 40 percent of the food they purchase.1 That’s just food, most of which you see daily and toss out regularly as it goes bad. But what about the things that don’t go bad — the sports equipment in the hall closet, the coat you bought for one trip or the shoes you love but never wear?

Why do we buy so much?

Maybe it’s because shopping carts are bigger. That’s right; today’s average shopping cart is three times as big as when they were first introduced in 1938.2 Here’s another interesting tidbit: Customers buy more impulse items when they grab a handheld shopping basket instead of a cart.3 Perhaps that’s because we go into a store knowing we want only one or two items but get a higher sense of fulfillment if we add just one or two more to the basket — because there’s room, and we can.

Retailers conduct research on how to encourage consumers to spend more money. There’s an entire industry devoted to studying shopping habits. Therefore, the more you know, the better you can identify retail traps. It’s not that you shouldn’t buy things; it’s that you shouldn’t buy things you don’t want or need, so it’s good to identify when you’re about to fall into a retailer’s trap. After all, the less you buy, the more you save. And the more you save, the better we can help you explore ways to create a retirement income strategy that you can have confidence in.

One nice perk some stores offer is a place to sit and rest. It’s good for bored children, patient spouses and weary shoppers laden with packages. But you should know that some stores, such as IKEA, set up displays of items that aren’t selling that well near these sitting areas.4 Apparently, staring at an item long enough while in repose can trigger an interest in buying it.

Some people use shopping like comfort food, as a way to temporarily make them feel better after a bad day or stressful situation. This is affectionately called “retail therapy.”5 In fact, studies show that about 62 percent of Americans tend to self-soothe by shopping. Scientists say we feel better because our brain releases a chemical called dopamine when we encounter something novel or exciting. However, it’s worth mentioning that dopamine levels spike higher when you anticipate making a purchase, and lower after you’ve made it.6 In other words, you can get a good feeling by shopping but not always when making a purchase. Good to know.

It’s also interesting to note the difference between impulsive shopping and compulsive shopping. Impulsive is shopping or buying on a whim, whereas compulsive is more planned out and designed to accomplish a goal, if only to feel better. Compulsive shoppers are more likely to get into financial trouble by shopping too much or too often.7 Interestingly, people tend to shop more compulsively when they are with friends as opposed to relatives.8 This could be indicative of shopping for approval or to fit in with your friends, versus trying not to be judged by your relatives.

 

Content prepared by Kara Stefan Communications

1 United Nations Environment Programme. 2017. “Food Waste: The Facts.” http://www.worldfooddayusa.org/food_waste_the_facts. Accessed Jan. 16, 2017.

2 Ali Newton. Display Centre. Dec. 14, 2016. “5 Display Tricks Supermarkets Use To Sell More.” http://displaycentre.co.uk/5-tricks-supermarkets-use-sell-blog/. Accessed Jan. 16, 2017.

3 Ibid.

4 Quentin Fottrell. MarketWatch. Dec. 10, 2016. “10 Psychological Retail Tricks That Make You Spend More Money.” http://www.marketwatch.com/story/10-retail-tricks-that-make-you-spend-more-2013-12-04. Accessed Jan. 16, 2017.

5 Marianna Glynska. The Huffington Post. May 10, 2016. “Going Shopping: Stress Relief or Necessary Burden?” http://www.huffingtonpost.com/marianna-glynska/going-shopping-stress-rel_b_9875532.html. Accessed Jan. 16, 2017.

6 Paula Cookson, LCSW. Inpathy Bulletin. Dec. 21, 2016. “Retail Therapy.” http://insightbulletin.com/retail-therapy/. Accessed Jan. 16, 2017.

7 Elizabeth Hartney, PhD. VeryWell.com. Apr. 18, 2016. “Compulsive vs. Impulsive Shopping.” https://www.verywell.com/difference-between-compulsive-and-impulsive-shopping-22336. Accessed Jan. 16, 2017.

8 Tomas Chamorro-Premuzic. The Guardian. Nov. 26, 2015. “The Psychology of Impulsive Shopping.” https://www.theguardian.com/media-network/2015/nov/26/psychology-impulsive-shopping-christmas-black-friday-sales. Accessed Jan. 16, 2017.

 

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

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

 

 

Take a Look at Life Insurance

Middle-aged adults have a plethora of middle-aged financial priorities. It’s hard to even call them priorities because each one is important; it’s just a matter of spreading the money you have across a variety of different needs.

In fact, a typical mid-life checking account might include payouts for a mortgage, college tuition, a savings account, an IRA, a life insurance policy, and a long-term care insurance policy — and that’s not even including the 401(k) contribution that is taken out of a paycheck before it gets deposited.

If you struggle with trying to figure out which financial priorities are most important or how to allocate a portion of your retirement savings among the many insurance product options, we can help. In fact, there are insurance products that can help with multiple priorities so you don’t have to spread your assets so thin.

Take life insurance, for example. There are many different kinds, and one of the main differences is between term and whole life. With a term policy, you purchase a death benefit amount and determine how long you want to hold the policy; it doesn’t pay out anything unless the owner passes away during the term. Whole life features a cash value account, which, over time, can build up a balance you can access, if needed.1

First and foremost, life insurance is there to help take care of your loved ones if you pass away. While many employers provide some life insurance coverage for employees, it may not be enough to avoid the long-term hardship of that loss of income. However, less than 40 percent of Americans have an interest in life insurance at all. It actually comes in seventh in terms of most people’s financial priorities.2

While a term life policy offers a death benefit for the selected term, a whole life policy can provide a death benefit that covers your entire life, as long as you keep paying the premiums. It’s worth mentioning that older policies may actually mature when the policy owner turns 100 and will pay out the death benefit while he or she is still alive. Newer policies, however, extend to a maximum age of 121.3

A whole life policy also offers certain tax advantages. While premiums may not be tax deductible, the cash value grows tax deferred, and distributions through the use of policy loans are generally tax free. The cash value can be accessed if the owner needs emergency funds or money to supplement his or her retirement income or it can even be used to pay the annual premiums on the policy.4 This is all in addition to the death benefit. Please note that withdrawals or policy loans of any type may reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force.


Content prepared by Kara Stefan Communications

1 Amy Danise. NerdWallet. Jan. 5, 2017. “Life Insurance Explained in (Exactly) 250 Words.” https://www.nerdwallet.com/blog/insurance/life-insurance-explained-250-words/. Accessed Feb. 6, 2017.

2 BestLifeRates.org. Dec. 28, 2016. “2015 Life Insurance Statistics and Facts.” https://www.bestliferates.org/blog/2015-life-insurance-statistics-and-facts/. Accessed Jan. 10, 2017.

3 Michael Kitces. Nerd’s Eye View. March 2, 2016. “The Age-100 Tax Problem With Outliving the End of Life Insurance Mortality Tables.” https://www.kitces.com/blog/outliving-the-end-of-life-insurance-mortality-tables-the-age-100-tax-problem-when-life-insurance-expires/. Accessed Jan. 10, 2017.

4 Amy Bell. Investopedia. Aug. 21, 2014. “6 Ways To Capture The Cash Value In Life Insurance.” http://www.investopedia.com/articles/personal-finance/082114/6-ways-capture-cash-value-life-insurance.asp. Accessed Feb. 24, 2017.

 

Life insurance policies are contracts between you and an insurance company. Guarantees and protections provided by insurance products are backed by the financial strength and claims-paying ability of the issuing insurer.

 

The content provided in this newsletter is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.

 

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.

The Future of Globalization

There was a time, at the end of the 20th century, when globalization was celebrated. We became more connected with the rest of the world. We could communicate and share information in real time without cost, nations benefited from strong imports and exports, and companies could improve their bottom lines by utilizing lower-cost suppliers and workers throughout the world.

These days, perhaps not so much. Globalization has become a target for both opportunity and opposition, largely responsible for higher unemployment in developed nations and the protectionism movement.While exposure to different cultures, values and beliefs offers benefits, there is revitalized interest in intra-country government spending on infrastructure and employment.1

It’s easy to see why the topic of globalization would be divisive: what looks like a threat to some looks like opportunity to others. However, no matter what perspective you have, we are here for you. Let us help you stay focused on your long-term retirement income goals, regardless of global and local economic events.  

It is likely that, moving forward, globalization will be downplayed but not eliminated. Rather, at least one observer purports that countries, including the U.S., may expend more effort and resources on “regionalization” with neighboring countries.2

One negative consequence of globalization, combined with the 2007-2009 recession, was higher unemployment in the U.S. This unfortunate circumstance hit young people particularly hard.3 But interestingly, the phenomenon of young adults moving back home with their parents also is characteristic of a global trend. According to one report, the following percentages represent 15- to 29-year-olds who live with their parents in various countries:4

  • ·         Italy, 80.6%
  • ·         Greece, 76.3% 
  • ·         Slovak Republic, 76.2%
  • ·         Spain, 73.6%
  • ·         Canada, 30.9%
  • ·         Denmark, 34.3%
  • ·         Sweden, 35.1%
  • ·         United States, 32.1%5

On one hand, globalization has served to generate more jobs in certain disciplines. The phenomenon is, and will most likely continue to be, responsible for the growth of jobs for market research analysts, interpreters and translators, cartographers and customer service representatives.6

On the other hand, regardless of how many jobs renegotiated trade agreements may bring back to America, most authorities agree there won’t be nearly as many traditional manufacturing jobs as in the past. Since much assembly line work is now automated, the manufacturing jobs of the future are more likely to require technology degrees with IT skills and knowledge.7



Content prepared by Kara Stefan Communications.

1 Sebastian Mallaby. International Monetary Fund. December 2016. “Finance and Development: Globalization Resets.” Vol. 53, No. 4. http://www.imf.org/external/pubs/ft/fandd/2016/12/mallaby.htm. Accessed Feb. 27, 2017.

2 Jonathan Web. Forbes. Dec. 21, 2016. “2017 Will Be a Year of Regionalization, Not

Deglobalization.” http://www.forbes.com/sites/jwebb/2016/12/21/2017-will-be-a-year-of-regionalization-not-deglobalization/print/. Accessed Jan. 1, 2017.

3 Alex Gray. World Economic Forum. Nov. 11, 2016. “Still living with your parents? You’re not alone.” https://www.weforum.org/agenda/2016/11/why-do-so-many-young-adults-still-live-with-their-parents-in-these-countries. Accessed Jan. 1, 2017.

4 Ibid.

5 Drew Desilver. Pew Research. May 24, 2016. “In the U.S. and abroad, more young adults are living with their parents.” http://www.pewresearch.org/fact-tank/2016/05/24/in-the-u-s-and-abroad-more-young-adults-are-living-with-their-parents/. Accessed Jan. 1, 2017.

6 Rob Sentz. Forbes. Sep. 27, 2016. “Three Jobs That Are Growing Because of Globalization.” http://www.forbes.com/sites/emsi/2016/09/27/three-jobs-that-are-growing-because-of-globalization/#66d3c499648c. Accessed Jan. 1, 2017.

7 Scott Simon. NPR. Dec. 10, 2016. “Economist Says Manufacturing Job Loss Driven by Technology, Not Globalization.” http://www.npr.org/2016/12/10/505079140/economist-says-manufacturing-job-loss-driven-by-advancing-technology-not-globali. Accessed Jan. 1, 2017.

 

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

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

Sleep and Other Surprising Economic Factors


As a result of all modern society’s demands, researchers say people are sleeping less than ever. Common sleep inhibitors include stress, alcohol consumption, smoking, lack of physical activity and excessive electronic media use.1

Sleep deprivation may be detrimental to one’s health, but there’s an economic toll as well. One recent study found that as much as 3 percent of our gross domestic product (GDP) is lost due to the collective impact of worker sleep loss (and hence, productivity).2

Another factor impacting our economy is timing. It may sound oversimplified, but the concept of “what goes up must come down” often applies to business cycles. For example, Barack Obama took office during one of the lowest points of the business cycle, so regardless of his policies there was generally no way to go but up.3

This is an interesting point, especially in a new year with a new presidential administration. Presidents are going to come and go. Business cycles are going to flourish and decline. And people are going to work and retire.

There is also a correlation between happiness and economic output, but not in the way you might think. One 2016 index showed many Western countries with high GDPs actually ranked low on the scale of happiness. There are no European countries in the top 10, the U.K. ranks 34 and the U.S. comes in at a dismal 108. What are the factors that lead to long-term happiness among citizens? Costa Rica, which is in first place, got rid of its military back in 1949 and reallocated all of that funding toward education and health care. It also produces 99 percent of its electricity from renewable sources.4

Speaking of quality of life, some cities that struggled post-recession have come to realize that beautifying their environs can improve talent recruitment for local companies. Perhaps that’s why mid-sized and small cities in the South and West that have invested in building green parks, bike lanes and cultural venues have attracted more college-educated young people.5 After all, a happy employee is usually a productive one, and productive companies produce a higher GDP.

Our goals for a confident financial future shouldn’t change based on who’s in the White House, or even if the economy is moving up or down.  Please feel free to contact us to discuss creating retirement strategies through the use of insurance products that can help you work toward your long-term retirement income goals.


Content prepared by Kara Stefan Communications.

1 Rand Corporation. 2016. “Why Sleep Matters: Quantifying the Economic Costs of Insufficient Sleep.” http://www.rand.org/randeurope/research/projects/the-value-of-the-sleep-economy.html. Accessed Dec. 30, 2016.

2 Ibid.

3 James DePorre. The Street. November 2016. “Rev’s Forum: 3 Factors That Will Drive the Market Action in 2017.” Dec. 28, 2016. http://realmoney.thestreet.com/articles/12/30/2016/revs-forum-3-factors-will-drive-market-action-2017. Accessed Dec 30, 2016.

4 Bert Oliver. Thought Leader. Dec. 30, 2016. “The ‘happiest’ nations in the world – what do they have in common?” http://thoughtleader.co.za/bertolivier/2016/12/30/the-happiest-nations-in-the-world-what-do-they-have-in-common/. Accessed Dec 30, 2016.

5 Richard Florida and Andrew Small. CityLab. Dec. 28, 2016. “Why Quality of Place Matters.” http://www.citylab.com/design/2016/12/why-quality-of-place-matters/509876/. Accessed Dec. 30, 2016.

 

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

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

For the Health of Marriage

Turns out marriage can do more for your heart than fill it with love. A recent study found that, among other health benefits, married people have a higher probability of surviving a stroke.1

They are also more likely to survive major surgery, have fewer heart attacks, be less likely to have advanced cancer when diagnosed and more likely to survive it longer, have a lower chance of becoming depressed and, generally, live longer than those who remain single. Scientists have put forth various reasons for these health benefits, ranging from stronger immune systems to taking fewer risks to living a healthier lifestyle.2

Financial health can also be impacted by the dynamics within a marriage. If a husband doesn’t pay the household bills, he may not appreciate how much it costs every time he leaves the hose running after he washes the car. A wife, on the other hand, may not know where the couple’s financial accounts are held or who to consult for emergency cash should her husband become incapacitated.

That’s why we believe it’s best for both spouses to be a part of the conversation when meeting with a financial advisor. It’s important to build a relationship of trust, and that can be difficult to do if one spouse is left out of meetings and annual reviews.

While marriage is often about sharing, it may also be a good idea for each spouse to establish his and her own credit history, even if they share a credit card account, as it is likely one spouse will pass before the other.3

In this situation, the deceased spouse should be removed from any jointly owned credit cards. This is one reason it can be a good idea to have individual credit histories, so the surviving spouse isn’t impacted by the loss of the deceased spouse’s credit history. An additional advantage is that a surviving spouse generally is not liable for the outstanding debt of a deceased spouse’s solo accounts.4

In the case of second and third marriages, establishing a financial relationship between both spouses is important. For example, if one spouse moves into the home of the other, it may be a good idea to get both names put on the deed.5

Health, credit and housing aside, both spouses need to understand their investments and the household net worth. It’s not enough for wives to pay the bills while husbands manage the investments, or vice versa. Ninety percent of women are responsible for managing their finances by themselves at some point in their life6 — which is particularly unfortunate if they’re forced to take on this task during retirement without a clear understanding of how to do it. 

Content prepared by Kara Stefan Communications. 

1 Nicholas Bakalar. The New York Times. Dec. 27, 2016. “Marriage May Help You Survive a Stroke.” http://www.nytimes.com/2016/12/27/well/family/marriage-may-help-you-survive-a-stroke.html?_r=0. Accessed Dec. 27, 2016.

Robert H. Shmerling. Harvard Health. Nov. 30, 2016. “The health advantages of marriage.” http://www.health.harvard.edu/blog/the-health-advantages-of-marriage-2016113010667. Accessed Dec. 27, 2016.

3 Lucy Lazarony. Credit.com. Nov. 9, 2016. “Credit Matters After the Death of a Spouse.” https://www.credit.com/credit-reports/death-of-spouse-and-credit/. Accessed Dec. 27, 2016.

4 Ibid.

5 Quentin Fottrell. MarketWatch. Dec. 7, 2016. “My husband won’t put me on the deed to the family home.” http://www.marketwatch.com/story/will-i-inherit-everything-from-my-husband-without-a-will-2016-06-24. Accessed Dec. 27, 2016.

6 Fidelity. March 23, 2016. “Women & money: How to take charge.” https://www.fidelity.com/viewpoints/personal-finance/women-manage-money. Accessed Dec. 27, 2016.

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

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.

Looking Through the Glass Ceiling

The Women’s Rights Movement began in 1848 to enable women to have representation in decisions impacting their social, civil and religious rights.1

While Hillary Clinton, the first female presidential candidate from a major party, was not elected this year, women take their right to vote very seriously. In every presidential election since 1964 (2016 results not yet available), the number of women who voted exceeded that of men.2

Another area where women have made up ground, but are still working to pull even, is the wage difference between genders. This gap can also be a hindrance for women when it comes to saving for retirement. For example, while women are more likely than men to work for employers that offer retirement plans, far less are eligible to participate in those plans because they work part-time or for a shorter time span. As a result, nearly 12 percent of baby boomer women who have participated in the workforce end up retiring in poverty.3

From paying bills to participating in large-scale financial decisions, it is important for women to take an active role in their own retirement planning. One thing to consider may be setting up separate retirement income streams for each spouse to ensure household income is not significantly reduced should one spouse die or become incapacitated.

Self-employment is one area that might seem free of glass ceilings, but new research reveals a lack of capital funding available for women. Reasons cited for this include not having enough collateral necessary to secure a loan, gender discrimination or simply that women tend to be more risk averse when it comes to borrowing large sums of money.4

In a recent speech, Christine Lagarde, managing director of the International Monetary Fund, pointed out that if women participated in the U.S. labor force to the same extent as men, our national income could increase by 5 percent.5

Lagarde also gave an example of women breaking the glass ceiling, but ultimately not achieving complete parity. Iceland elected its first female president back in 1980, but women’s wages there still trail men’s by 14 to 18 percent. Interestingly, Icelandic working women recently protested lower wages with a job walk-out at precisely 2:38 p.m. — the time of day when they stop being paid (relative to men’s pay).6

The Women’s Rights Movement is now about 168 years old. According to the IMF, at the current rate of progression globally, women should achieve parity with men’s wages in another 170 years7 — so we’re almost halfway there. Baby steps.


Content prepared by Kara Stefan Communications.

1 Bonnie Eisenberg and Mary Ruthsdotter. National Women’s History Project. “History of the Women’s Rights Movement.” http://www.nwhp.org/resources/womens-rights-movement/history-of-the-womens-rights-movement/. Accessed Nov. 29, 2016.

2 Center for American Women and Politics. “Gender Differences in Voter Turnout.” http://www.cawp.rutgers.edu/sites/default/files/resources/genderdiff.pdf. Accessed Nov. 29, 2016.

3 Jennifer Erin Brown, Nari Rhee, Joelle Saad-Lessler and Diane Oakley. UC Berkeley Labor Center. March 1, 2016. “Shortchanged in Retirement: Continuing Challenges to Women’s Financial Future.” http://laborcenter.berkeley.edu/shortchanged-in-retirement-continuing-challenges-to-womens-financial-future/. Accessed Nov. 29, 2016.

4 Robert M. Sauer. World Economic Forum. Sept. 28, 2016. “The self-employed glass ceiling isn’t getting the attention it deserves.” https://www.weforum.org/agenda/2016/09/the-self-employed-glass-ceiling-isnt-getting-the-attention-it-deserves. Accessed Nov. 29, 2016.

5 Christine Lagarde. The International Monetary Fund. Nov. 14, 2016. “Women’s Empowerment: An Economic Game Changer.” https://www.imf.org/en/News/Articles/2016/11/14/SP111416-Womens-Empowerment-An-Economic-Game-Changer. Accessed Nov. 14, 2016.

6 Ibid.

7 Ibid.

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

 

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

 

What it Means to be Disenfranchised

Disenfranchised people are those who feel deprived of a legal right or privilege. The number of people disenfranchised within the United States is part of the reason Donald Trump, a candidate without a history in politics, was elected to office. While much of the country is recovering from the Great Recession, there continues to be a lag for many disenfranchised Americans.1

For some, there’s a feeling that they can’t afford anything anymore. One poll found that a large swath of middle-class Americans long for quality jobs, affordable health care and child care and both economic and financial security.2

Over the past three decades, America’s economy has moved from manufacturing-based jobs to service-based jobs. This gradual process transformed the job market. Even with today’s low unemployment rate, there are jobs available, but in many cases, those who need the job may not have the skills and experience that the position requires or it may not pay the wages they are looking for.3

Americans dissatisfied with the health care initiatives introduced by Barack Obama reported a variety of motives for voting Trump. A common complaint was that premiums seemed to increase every year. Others went deeper, saying Trump’s proposals would promote personal responsibility rather than guarantee health care for those who are “lazy and entitled.” Sixty-six percent of Trump supporters said the economy is “rigged for people receiving government assistance.”4

The combination of expensive health care options, a difficult job market and overwhelming debt, and it’s easy to see why some have become so disenfranchised. How many Americans are we talking about?

Leading up to the election, a Gallup poll found only 27 percent were satisfied with the current state of the country.5 A post-election poll in December found a similar overall result, with Democrats still feeling slightly better than Republicans despite the presidential election results.6

Dissatisfaction can take on different forms. Many people have their concerns about the future of the country, but perhaps more importantly, are focused more on their own personal situation. The fact is, contentment has a lot to do with feeling confident, or at least hopeful, about your future.

One way to work toward this confidence is to insure a portion of your retirement assets. That’s where we come in. We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. Please contact us if you’d like to discuss ways to develop more confidence about your ability to provide income throughout retirement.

 

Content prepared by Kara Stefan Communications.

1 Bob Rapoza. The Hill. Dec. 9, 2016. “Rural America demands the nation’s attention.” http://thehill.com/blogs/pundits-blog/presidential-campaign/309735-rural-america-demands-the-nations-attention. Accessed Dec 9, 2016.

2 The Center for Retirement Research at Boston College. Nov. 15, 2016. “The Needs of Working Folks.” http://squaredawayblog.bc.edu/squared-away/the-needs-of-working-folks/. Accessed Dec 20, 2016.

3 Ibid.

4 Olga Khazan. The Atlantic. Dec. 20, 2016. “If Not Obamacare, Then What?”

https://www.theatlantic.com/health/archive/2016/12/if-not-obamacare-then-what/511130/. Accessed Dec 20, 2016.

5 Gallup. Oct. 13, 2016. “U.S. Satisfaction Remains Low Leading Up to Election.” http://www.gallup.com/poll/196388/satisfaction-remains-low-leading-election.aspx. Accessed Dec 20, 2016.

6 Clark Mindock. International Business Times. Dec. 16, 2016. “Are Americans Happy With The US? Election, Economy, Wars Have Most Dissatisfied, New Poll Finds.” http://www.ibtimes.com/are-americans-happy-us-election-economy-wars-have-most-dissatisfied-new-poll-finds-2461644. Accessed Dec 20, 2016.

 

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


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

 

 

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