Tips for Bargain Hunters

For many of us, retirement means living on a fixed income, and that often means making a budget and watching expenses. One way to help stay on budget is to shop for the best prices on items that fall within our discretionary income budget.

According to Consumer Reports, even though consumers can now buy just about anything they want online at any time of the year, deep discounts for many products still tend to be seasonal.1 For example, the best time to buy summer clothes is halfway through the summer, when stores cut prices to move inventory and make room for the next season’s stock.2

The following list from Consumer Reports details the best months for buying certain consumer items.3

  • January — bathroom scales, ellipticals, linens and sheets, treadmills, TVs, winter sports gear and clothing
  • February — humidifiers, mattresses, winter sports gear and coats
  • March — boxed chocolates, digital cameras, ellipticals, humidifiers and treadmills
  • April — carpet, desktop and laptop computers and digital cameras
  • May — baby high chairs, desktop and laptop computers, interior and exterior paints, mattresses, strollers and wood stains
  • June — camcorders, ellipticals, indoor furniture, summer sports gear and treadmills
  • July — camcorders, decking, exterior and interior paint, siding, summer clothing and wood stains
  • August — air conditioners, backpacks and back-to-school goods, dehumidifiers, outdoor furniture and snow blowers
  • September — desktop and laptop computers, digital cameras, interior and exterior paint, lawn mowers and tractors, printers and snow blowers
  • October — desktop computers, digital cameras, gas grills, lawn mowers and tractors
  • November — camcorders, gas grills, GPS and TVs
  • December — Blu-Ray players, camcorders, e-book readers, gas grills, GPS, headphones, kitchen cookware, major appliances and TVs

According to US News & World Report, the best time to buy a car is not when you see all those ads on TV for Presidents Day, etc. Rather, the best months to shop for good deals are May, October, November and December. The best days to shop are Mondays, New Year’s Eve and New Year’s Day.4

When it comes to holiday gift giving, some of the spoils go to those who procrastinate. If your gift list doesn’t include popular items that will sell out, waiting until the last 10 days before Christmas frequently can net the highest savings. Looking for holiday lights and decorations? The best time to shop is just after the big day, when you can stock up for next year at clearance prices.5

If you’re in the market to buy or sell a house, note that the best time for sellers to list a home is in May, when the supply of houses is tight, thus commanding the highest prices. The best time to buy is at summer’s end, when sellers are cutting house prices that have been on the market for several months.6

As for where to find the best bargains, you’re probably already familiar with local discount stores and volume warehouses. If you’re a member of Amazon Prime, be on the lookout for “Prime Day” each year when the online retailer drastically reduces prices on select items for 24 hours for Prime members. If you’re not an Amazon Prime member, “Prime Day” is the time to join because the annual membership fee is usually reduced as well.7

Of course, one of the best ways to stay on budget during retirement is to help ensure your income is ongoing and reliable, which is something we can help with. Give us a call so we can talk about how we can help you create strategies using a variety of insurance products to help you work toward your retirement income goals.

Content prepared by Kara Stefan Communications.

1 Consumer Reports. “Best Time to Buy Things.” http://www.consumerreports.org/cro/money/best-time-to-buy-things/index.htm. Accessed June 22, 2017.

2 Nikki Willhite. All Things Frugal. “Shopping the Seasonal Sales.” http://www.allthingsfrugal.com/s_sale.htm. Accessed June 22, 2017.

3 Consumer Reports. “Best Time to Buy Things.” http://www.consumerreports.org/cro/money/best-time-to-buy-things/index.htm. Accessed June 22, 2017.

4 Eric C. Evarts. US News & World Report. March 31, 2017. “6 Best Times to Buy a Car.” https://cars.usnews.com/cars-trucks/6-best-times-to-buy-a-car. Accessed June 22, 2017.

5 Denise Groene. The Wichita Eagle. June 16, 2017. “When is the best time to buy a grill, and other stuff.” http://www.kansas.com/news/business/biz-columns-blogs/article156570289.html. Accessed June 22, 2017.

6 Susie Gharib. Fortune. June 21, 2017. “Do’s and Don’ts for Buying and Selling a House.” http://fortune.com/2017/06/21/zillow-tips-for-buying-and-selling-a-house/. Accessed June 22, 2017.

7 Matt Swider. TechRadar. June 28, 2017. “Amazon Prime Day deals 2017 in the US: Find the best sales for July 11.” http://www.techradar.com/news/amazon-prime-day-2017-usa-when-is-it-and-how-can-you-find-the-best-deals. Accessed June 30, 2017.

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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Divorce During Retirement

A funny thing happens when you get busy with trying to achieve all the things you want out of life: You lose a few along the way. Unfortunately, some people lose their marriage.1 However, for those who are truly unhappy and can’t see a way back to blissful partnership, a “gray divorce” isn’t necessarily all negative. Even in retirement, leaving a spouse can open up new avenues to be explored, the chance to pursue activities perhaps not supported before and new opportunities to reinvent yourself.

With that said, you also must deal with a myriad of details when it comes to dividing assets to help ensure each ex-spouse has enough income to live comfortably during retirement. Just as it takes a village to raise children, it can take a team of experienced and qualified professionals to help you do this, from attorneys to financial advisors to tax planners and perhaps even a therapist. The goal is to emerge confident about your financial future, and we’re here to help both spouses on this journey should you need it.

When it comes to Social Security, there are certain rules that apply to benefits for a divorced spouse based on the ex’s earning history. For example, the marriage must have lasted for at least 10 years, the couple must be divorced for at least two years and the claiming ex must be currently unmarried – if the claimer gets remarried, the ex’s spousal benefits will stop. Furthermore, the ex-spouses must both be at least age 62 to begin drawing spousal benefits, and the spouse/divorcee must be full retirement age to be eligible for the full spousal benefit.2

Another important component to address is life insurance. If there are alimony payments involved, life insurance can help cover the loss of that income should the payer die first. Depending on their circumstances, divorcing couples may want to update their named beneficiaries on their respective policies. If a policy has a cash value, that money belongs to the owner. While the policy is active, the owner may forgo the death benefit and instead take the cash value, a process known as cashing out your life insurance policy.3

Research has found that divorce may be a reason why many people are working long past traditional retirement age.4 Because of this, it’s important to set aside animosity and work on an equitable agreement for both spouses’ retirement. Divorcing spouses should be cognizant that if one ends up struggling financially, their adult children may have to pick up the slack.5

 Content prepared by Kara Stefan Communications

1 Linda Melone. Next Avenue. July 11, 2016. “Why Couples Divorce After Decades of Marriage.” http://www.nextavenue.org/slideshow/why-couples-divorce-after-decades-of-marriage/. Accessed June 6, 2017.

2 Social Security Administration. “Retirement Planner: If You Are Divorced.” https://www.ssa.gov/planners/retire/divspouse.html. Accessed June 6, 2017.

3 Greg DePersio. Investopedia. Nov. 25, 2015. “How Life Insurance Works in a Divorce.” http://www.investopedia.com/articles/personal-finance/112515/how-life-insurance-works-divorce.asp. Accessed June 6, 2017.

4 Ben Steverman. Bloomberg. Oct. 17, 2016. “Divorce Is Destroying Retirement.” https://www.bloomberg.com/news/articles/2016-10-17/divorce-is-destroying-retirement. Accessed June 6, 2017.

5 Charlotte Cowles. The Cut. May 12, 2017. “My Mom Is Broke. How Can I Help Her?” https://www.thecut.com/2017/05/my-mom-is-bad-with-money-how-do-i-help-her.html. Accessed June 6, 2017.

Our firm is not affiliated with or endorsed by the Social Security Administration or any governmental agency and does not provide tax or legal advice.

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

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.

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Retirement: Loneliness Can Sneak Up on You

Even people who have spent a lot of time planning for retirement may encounter unexpected challenges once they’re in those golden years. They focus on retirement income planning, which is, of course, important and appropriate — and we can help you there. They also focus on things they want to do while they’re still in good health, such as traveling or playing pickleball. They look forward to spending more time with their spouse and good friends.

It can be quite joyful, but the less joyful realization often sets in when a spouse or a close friend passes away. That’s when many retirees truly understand they are facing the reality of their mortality. Apart from that, they’ve also lost a best friend and companion.1

Sometimes the pain of loss causes us to want to avoid that pain altogether, which can lead to an unwitting desire to isolate ourselves. Unfortunately, this can be particularly problematic during retirement, when people are less likely to have scheduled daily interaction with others outside the household.

Studies in the U.S. and Britain show the prevalence of loneliness among people older than 60 ranges from 10 percent to 46 percent.2 Additionally, people with low levels of social interaction can experience brain changes that cause them to see other human faces as threatening and, therefore, are less likely to seek social ties.3 It’s all kind of ironic, isn’t it? With so many people experiencing the same malady, you would hope we could find each other, since companionship would certainly help.

One social scientist — Robin Dunbar, an evolutionary psychologist at the University of Oxford — summed it up with this observation: “It has become apparent in the last 10 years that the most important factor influencing your health, well-being, risk of falling ill, even your risk of dying and divorce is actually the size of your friend network.” His research shows bonding is strongest when endorphins are released, so he recommends that one way to strengthen friendships is by singing, dancing and working out with others.4

Retirement isolation is being studied from a number of different perspectives, particularly in housing. Although many retirees are reluctant to move to an assisted living facility, the longer they live, the more they will need help. Some have taken to moving into co-housing apartment buildings in which the tenants plan activities and support each other without all the rules and restrictions of a retirement home.5

We’re always happy to get together and chat with you about any retirement income planning questions you might have. Give us a call toll-free at 1-888-272-1099 if we can be of assistance and be sure to spend time with friends and family doing the activities you enjoy.

Content prepared by Kara Stefan Communications.

 1 National Institute on Aging. July 2016. “Mourning the Death of a Spouse.” https://www.nia.nih.gov/health/publication/mourning-death-spouse. Accessed May 28, 2017.

2 Katie Hafner. The New York Times. Sept. 5, 2016. “Researchers Confront an Epidemic of Loneliness.” https://www.nytimes.com/2016/09/06/health/lonliness-aging-health-effects.html?_r=2. Accessed June 13, 2017.

3 Olga Khazan. The Atlantic. April 6, 2017. “How Loneliness Begets Loneliness.” https://www.theatlantic.com/health/archive/2017/04/how-loneliness-begets-loneliness/521841/.

4 Aylin Woodward. Scientific American. May 1, 2017. “With a Little Help from My Friends.” https://www.scientificamerican.com/article/with-a-little-help-from-my-friends/?WT.mc_id=SA_TW_MB_NEWS. Accessed May 28, 2017.

5 Idil Mussa. CBC News. May 2, 2017. “Seniors in Ottawa look to co-housing to avoid isolation.” http://www.cbc.ca/news/canada/ottawa/seniors-in-ottawa-look-to-co-housing-to-avoid-isolation-as-they-age-1.4094267. Accessed May 28, 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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Checking Up on Health Care Expenses

If there’s one thing every adult demographic in America values, it’s maintaining good health.

People with medical conditions may be interested in topics like new medical technology, pharmacology or national changes to health care insurance. Meanwhile, those without serious medical issues want to know how they can stay that way, through nutrition, exercise, weight loss and preventive screenings. It’s a national conversation, and not one that’s likely to diminish any time soon.

The 6.5 percent growth rate in medical expenses has plateaued recently, according to business consulting firm PwC, but the company’s researchers see signs the rate will increase again in the near future.1

This isn’t just a reflection of the cost of health care insurance, but also the prices charged by facilities, physicians and specialists for the drugs and therapies necessary to treat medical conditions. Escalating health care usage and prices contribute to the increase of insurance premiums, deductibles, copays and coinsurance.2

Whether you’re working or retired, the issues of finances and health care are inextricably interwoven. You can’t really think or plan about one without considering the other. This is true whether you’re covered under employer-sponsored insurance, a plan from the individual market or a government-sponsored plan. As financial professionals, we work with clients in each of these situations to help ensure their retirement income plan takes into consideration current and potential medical expenses in the future. If you need help assessing your retirement income needs, please contact us for help.

Ultimately, the message the health care industry is promoting is that people need to take better care of themselves. They need to research and understand their health care options, and also work on improving their overall health now to prevent problems — and related expenses — in the future.

When it comes to individuals taking responsibility for their own health, there’s no need to wait for the government to step in and pass legislation. There’s plenty of knowledge available at our fingertips to help maintain health, from advice on healthy eating away from home3 to using diet to manage indigestion problems like acid reflux.4

For older Americans, taking on new fitness activities may be worrisome since they can increase the likelihood of injury. On the other hand, when done correctly, moderately and consistently, exercise can also help decrease the likelihood of injury.

Plus, it may be easier than you think to catch up on today’s fitness trends. Many are simply rejuvenated from the workouts of yesteryear.5 Like today’s trendy Pilates exercises, which were quite popular in the 1950s and 60s,6 one thing that will never go out of style is taking strides to maintain health.

Content prepared by Kara Stefan Communications

 1 PwC. 2017. “Medical Cost Trend.” https://www.pwc.com/us/en/health-industries/health-research-institute/behind-the-numbers.html. Accessed May 5, 2017.

2 NBC News. Nov. 4, 2016. “Why Health Care Eats More Of Your Paycheck Every Year.” http://www.nbcnews.com/health/health-news/why-health-care-eats-more-your-paycheck-every-year-n678051. Accessed May 5, 2017.

3 Harvard Medical School. 2017. “Tips for healthy eating away from home.” http://www.health.harvard.edu/diseases-and-conditions/tips-for-healthy-eating-away-from-home. Accessed May 5, 2017.

4 Jane E. Brody. The New York Times. Mar. 20, 2017. “Pop a Pill for Heartburn? Try Diet and Exercise Instead.” https://www.nytimes.com/2017/03/20/well/pop-a-pill-for-heartburn-try-diet-and-exercise-instead.html?_r=0. Accessed May 5, 2017.

5 Jessica Smith. Shape.com. 2017. “Then & Now: 7 Retro Workouts That Still Get Results.” http://www.shape.com/fitness/workouts/then-now-7-retro-workouts-still-get-results. Accessed May 5, 2017.

6 Balanced Bodies. 2017. “Pilates Origins.” http://www.pilates.com/BBAPP/V/pilates/origins-of-pilates.html. Accessed May 5, 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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Taxes and Retirement Planning

The White House recently introduced what it billed the “biggest tax cut” in U.S. history. While a presidential tax proposal is not likely to get passed without significant changes, the fact that Republicans dominate both chambers of Congress suggests 2017 may well be a year in which significant tax reform is engineered.1

One thing should be perfectly clear: The U.S. tax code is highly complicated.2 There may not be anyone who understands it all off the top of their head. CPAs and tax professionals must conduct thorough due diligence to tailor strategies and complete returns for taxpayers with complex situations.

Because of this, we recommend our clients who require tax advice work directly with an experienced and qualified tax professional. However, we also believe financial and tax professionals should not work in a vacuum, and therefore are more than happy to work in concert with our clients’ tax advisors to help align their financial strategy with their tax situation.

This is particularly important when it comes to retirement planning, because you want to save as much as possible before you retire, which may include tax-deferred financial vehicles such as a 401(k) or IRA, but you don’t want to get hit with a big tax bill on untaxed earnings once you’re in retirement.3 This is a delicate balance that requires experience and collaboration from both a financial professional and a tax professional.

One tax issue each of us deals with is the federal income tax rate. Our annual earnings determine which federal tax bracket we land in, but that tax bracket isn’t the tax rate applied to our entire income. Instead, we pay every tax rate on income blocks up to our individual bracket. Like many things about filing taxes, this can be highly confusing for many people.

It may be easier to understand this through a hypothetical example. Let’s say Joe, who is single, had $92,000 of taxable income in 2016, which landed him in the 28 percent tax bracket. This is how his total tax is calculated:4

  • He pays 10% on the first $9,275 (tax of $927.50)
  • He pays 15% on the next $28,375 (tax of $4,256.25)
  • He pays 25% on the next $53,500 (tax of $13,375)
  • He pays 28% on the final $850 (tax of $238)
  • Total tax bill of $18,796.75

As you can see, Joe doesn’t pay 28 percent on the full amount of his taxable income; his taxable amount progresses through each income bracket and their respective tax rates until it reaches his total taxable income for the year. Therefore, a person who falls in the highest tax bracket is only paying that higher tax rate on a portion of his or her income.

This is an important distinction to remember as the U.S. works toward tax reform. On one hand, reducing the number of tax rates from seven to three (Trump’s proposal: 10 percent, 25 percent, 35 percent)5 looks to simplify tax filings, but for many people, this could mean paying a higher tax rate on larger blocks of income. Let’s take the hypothetical example of Joe again, using the same income brackets (to date, no tax rate income brackets have been proposed). Here’s how Joe’s scenario might break down:

  • He pays 10% on the first $9,275 (tax of $927.50)
  • He pays 25% on the next $81,875 (tax of $20,468.75)
  • He pays 35% on the final $850 (tax of $297.50)
  • Total tax bill of $21,693.75

This example simply illustrates how a progressive income tax works. Obviously, it doesn’t take into consideration credits and deductions, which vary substantially among taxpayers. Nor does it include payroll taxes.6

Federal income brackets and their respective tax rates are the most fundamental issues Americans are subject to when filing taxes. But as you can see, there’s nothing straightforward about them. This is worth remembering as tax reforms continue to be proposed and debated moving forward: Nothing concerning taxes is simple, and there are usually layers that impact us that the average layperson isn’t likely to see.

Content prepared by Kara Stefan Communications

1 Fox News. April 26, 2017. “Mnuchin vows ‘biggest tax cut’ in US history, confirms plan to slash business rate.” http://www.foxnews.com/politics/2017/04/26/mnuchin-vows-biggest-tax-cut-in-us-history-confirms-plan-to-slash-corporate-rate.html. Accessed May 5, 2017.

2 Vanessa Williamson. The Atlantic. April 18, 2017. “How the Tax-Filing Process Confuses Americans about Tax Policy.” https://www.theatlantic.com/business/archive/2017/04/paying-taxes-confusion-policy-1040/523287/. Accessed May 5, 2017.

3 Fidelity. March 1, 2017. “How to invest tax efficiently.” https://www.fidelity.com/viewpoints/investing-ideas/tax-strategy. Accessed May 5, 2017.

4 Tina Orem. Nerd Wallet. Sept. 8, 2016. “2016 Federal Income Tax Brackets.” https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/. Accessed May 5, 2017.

5 Martha C. White. NBC News. May 2, 2017. “Even Families Making $100K Won’t Be Better Off Under New Tax Plan.” http://www.nbcnews.com/business/taxes/even-families-making-100k-won-t-be-better-under-new-n753941. Accessed May 5, 2017.

6 NPR. 2017. “On Tax Day, an Economist Outlines How the Payroll Tax Works.” http://nhpr.org/post/tax-day-economist-outlines-how-payroll-tax-works#stream/0. Accessed May 5, 2017.

These hypothetical examples are for illustrative purposes only. This information is not intended to provide tax advice. Be sure to speak with qualified professionals about your unique situation.

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.

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Expenses That Come With Caring

We spend our lives caring for others — at least if we’re lucky. One of the greatest treasures in life is having people, causes and pets to care for. Unfortunately, caring for others can have its challenges, including additional stress and financial burdens.

Sometimes we get so caught up in making money that we don’t pay attention to how much we spend. Some of the money we spend may not really register because we use it to take care of others’ needs; what we may deem to be a necessary expense certainly doesn’t feel like discretionary spending.

But spending is spending, and we all need to take a careful look at how much of our money we use on caring for others, or “care management.” These expenses could include the money we spend raising our children, or helping them out when they’re older and nearly independent, but still need extra cash now and then.

We also should consider the amount of money we spend on elder care, whether for ourselves or loved ones. One recent study found that it costs families more to care for a frail older adult than to raise a child in the first 17 years of life.1 Many families are taking care of seniors diagnosed with Alzheimer’s at home for as long as possible, given the increasing price tag of providing full-time care.2  Some insurance products, such as life insurance and annuities, provide various options you may want to considerto help cover the potential costs of some of these care needs. If you’d like to find out more, please give us a call toll-free at 1-888-272-1099. We’d be happy to discuss options based on your unique situation.

Charitable donations are also a care management item, and going forward, there may be a greater call for private donations if the government cuts the budget in areas like the cultural arts. There is also concern that reduced funding on the environment could have long-ranging impacts on care issues. For example, scientists note climate change can impact the spread of infectious diseases carried by animals and insects, such as Rocky Mountain spotted fever, West Nile virus, Lyme disease, Zika and dengue. Further, compromised water systems can lead to waterborne infections like cholera and other gastrointestinal conditions.3

To end on a brighter note, here’s a heartwarming story related to caring and making someone’s day. Students of White Bear Lake Area High School in Minnesota have an annual tradition of staging a runway march through a local senior center in their fancy dress on the way to prom night.4 Just imagine the post-march chats among seniors about their high school days! It’s an engaging idea that demonstrates it doesn’t take a lot of money to stage a caring moment between generations.

Content prepared by Kara Stefan Communications.

1 Howard Gleckman. Forbes. Jan. 18, 2017. “Families Spend More to Care for Their Aging Parents Than To Raise Their Kids.” https://www.forbes.com/sites/howardgleckman/2017/01/18/families-spend-more-to-care-for-their-aging-parents-than-to-raise-their-kids/#924f7e6f4a50. Accessed May 12, 2017.

2 Bruce Jaspen. Forbes. March 7, 2017. “Alzheimer’s Staggering $259B Cost Could Break Medicare.” https://www.forbes.com/sites/brucejapsen/2017/03/07/u-s-cost-of-alzheimers-eclipses-250-billion/#294c3f5471e5. Accessed May 12, 2017.

3 Peter Grinspoon. Harvard Medical School. March 29, 2017. “Our planet, ourselves: Climate change and health.” http://www.health.harvard.edu/blog/planet-climate-change-health-2017032911481. Accessed May 12, 2017.
4 White Bear Press. May 10, 2017. “Students take a prom march through Cerenity Senior Care Center.” http://www.presspubs.com/white_bear/article_67400d02-35a8-11e7-b749-731700102e0f.html. Accessed May 12, 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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Savings and Investment Updates

The American College of Financial Services recently posted some surprising results from its Retirement Income Literacy Quiz. Nearly three-quarters of respondents ages 60 to 75 failed the test with a score of 60 percent or less.1

The quiz included topics such as which expenses are covered by Medicare and long-term care insurance and what age people should start drawing benefits from Social Security. If you’re not familiar with the answers to questions such as these, we invite you to schedule a consultation so we can help you delve into retirement planning. There are many factors to consider beyond where to invest and how much you’ve saved. Retirement is about preserving and distributing assets, as well as understanding the impact of longevity.

Let’s take a look at some other retirement-oriented questions that are important to answer. For example, do you know how long you have to work for your company before you can keep matched contributions to your 401(k) plan? Some companies that sponsor a 401(k) require employees to work around two to three years before employer-matching contributions are vested. If you leave the company before then, those matches won’t be added to your account balance — even if you maintain the plan with that employer after you go to work for another one.2

It’s worth noting that 401(k) and other employer-sponsored retirement plans may be considered for tax reform. Recent discussions have included eliminating the tax-deferred status of retirement plan contributions, which represent a four-year tab of $583.6 billion that Congress could spend elsewhere. The discussions are in the very early stages, but things can happen quickly in Washington these days, so it’s an issue worth watching.3

For those in the military, on Jan. 1, 2018, the military’s new Blended Retirement System goes into effect. Starting that day, all military personnel whose length of service spans one to 12 years will have one year to make an irrevocable choice between the old and new retirement plans. Service members who started before 2006 will automatically remain in the old plan, which offers a generous pension complete with inflation adjustments. However, anyone joining the military starting next year gets enrolled automatically in the new program, which combines reduced pension benefits with up to a 5 percent match of personal contributions to the government’s Thrift Savings Plan (TSP).4

If you haven’t saved enough money to retire yet, you may be thinking you’ll just keep working until you have enough. However, according to a recent survey of 1,002 retirees, 60 percent said the timing of their retirement was unexpected, citing reasons such as health issues, job loss or the need to care for a loved one.5 While working longer is a worthy goal, it’s good to develop a financial plan that helps provide for possible contingencies just in case you have to pivot to “Plan B.”

Content prepared by Kara Stefan Communications.

1 Walter Updegrave. Money. May 12, 2017. “Most Seniors Flunked a New Retirement Quiz. Could You Do Better?” http://time.com/money/4771461/retirement-quiz-pass-or-flunk/. Accessed May 12, 2017.

2 Emily Brandon. US News & World Report. May 8, 2017. “How Long Does It Take to Vest in a 401(k) Plan?” http://money.usnews.com/money/retirement/401ks/articles/2017-05-08/how-long-does-it-take-to-vest-in-a-401-k-plan. Accessed May 12, 2017.

3 Suzanne Woolley. Bloomberg. May 3, 2017. “What Is Washington Doing to My 401(k) Tax Break?” https://www.bloomberg.com/news/articles/2017-05-03/what-is-washington-doing-to-my-401-k-tax-break. Accessed May 12, 2017.

4 Dan Kadlec. Money. May 10, 2017. “What U.S. Military Need to Know About Their New Retirement Plan.”  http://time.com/money/4767777/military-blended-retirement-system-tips-new-calculator/. Accessed May 12, 2017.

5 Charisse Jones. USA Today. June 2, 2015. “60% of Americans Have to Retire Sooner Than They’d Planned.” https://www.usatoday.com/story/money/2015/06/02/majority-of-americans-have-to-retire-sooner-than-theyd-planned/28371099/. Accessed June 2, 2017.

Our firm is not affiliated with the U.S. government or any governmental agency and does not provide federal benefits advice.

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.

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The Influence of Work

Work offers a confluence of possibilities, ranging from satisfaction to frustration to, many days, a little of both. If you work during retirement, here’s an interesting revelation: Social Security taxes are deducted from your work paycheck even if you’re already drawing benefits. For a lot of retirees, wages from some type of job represent a significant portion of their retirement income.1

This is a scenario in which you may be able to increase your Social Security benefits even if you started taking them early. If the annual income you earn in retirement is higher than the lowest inflation-adjusted year of earnings factored into your current benefit, a new benefit will be calculated for a higher amount.2

The decision to work or not during retirement is a personal one, based on both financial and lifestyle factors. Please 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.

When you’re making the decision about whether to retire, remember you may have more options than you think. Some people may want to work longer either because they could stand to save more or want to keep their brains engaged — or both. However, if they’ve grown tired of their job, they figure they might as well retire. But it doesn’t have to be one or the other. Many people go job hunting because they’re frustrated with their boss or company and no longer feel they get the respect they deserve.3 You can do that too, even if you’re older. If you aren’t ready to retire, consider looking for another job.

If that doesn’t appear to be a feasible option, there are other ways to cope with a job that has you down. People often talk about developing hobbies during retirement to occupy their time, keep their minds engaged and nurture a social network. There’s no reason to wait until retirement. Studies show people experience long-term fulfillment when they commit to an activity for the sake of the activity itself.4 This gives you something to look forward to doing outside work, so that the day-to-day grind is more tolerable. A secondary benefit is that once you do retire, the activity could be waiting for your full-time attention.

Then again, you might be considering quitting your job and working for yourself. To get started, human resources professional Liz Ryan offers the following questions to ask yourself:5

  • What services can I sell?
  • What kinds of problems or challenges can I solve for clients?
  • What is the going rate for my services?
  • How can I explore the possibilities as a new consultant while continuing to work at my job?
  • How can I market my new business?

Content prepared by Kara Stefan Communications.

1 Tom Margenau. Arizona Daily Star. March 23, 2017. “Social Security and you: Working seniors pay taxes and may see benefit increase.” http://tucson.com/business/social-security-and-you-working-seniors-pay-taxes-and-may/article_d12b59db-5376-549c-a628-e7c569db772c.html. Accessed May 19, 2017.

2 Ibid.

3 Liz Ryan. Forbes. March 31, 2017. “The Real Reason Good Employees Quit.” https://www.forbes.com/sites/lizryan/2017/03/31/the-real-reason-good-employees-quit/#4390ea844b4e. Accessed May 19, 2017.

4 Brad Stulberg. New York. March 27, 2017. “Your Job Can’t Be the Only Meaningful Thing in Your Life.” http://nymag.com/scienceofus/article/how-to-find-meaning-outside-of-work.html?mid=twitter_scienceofus. Accessed May 19, 2017.

5 Liz Ryan. Forbes. April 2, 2017. “Full-Time Employment Is Great For Employers – Not So Great For You.” https://www.forbes.com/sites/lizryan/2017/04/02/full-time-employment-is-great-for-employers-not-so-great-for-you/print/. Accessed May 19, 2017.

We are able to provide you with information but not guidance or advice related to Social Security benefits. Our firm is not affiliated with the Social Security Administration 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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Keeping Connected With the Ever-Changing Internet

If you’ve watched national news in the past year or two, you’ve likely heard debates about net neutrality, which is the principle that internet providers should allow access to content regardless of the source and without blocking certain sites.

In the waning days of the Obama administration, the Federal Communications Commission passed a rule preventing providers such as Comcast and AT&T to monitor each person’s internet browsing history and sell that information to other marketers without their expressed permission.1 Under the Trump administration, Congress has since reversed that ruling.2

This debate is important for both internet users and companies for vastly different reasons. Regardless of the direction this issue takes moving forward, the internet will continue to be an influence in the way we obtain and share information in the future.

As a result, privacy and security concerns are critical, especially with regard to our financial accounts and transactions. The ransomware attack “WannaCryptor,” which affected Great Britain and other countries in May, was an unpleasant reminder of how important it is to keep software programs current by installing updates as they are made available.3

As financial professionals, our priority is keeping a close eye on your finances to help ensure you’re utilizing the optimal products and strategies to work toward your goals. Now more than ever, this requires monitoring the latest technology, because as the world changes, your needs may change with it.

One shift in the tech world is the continued emergence of the Internet of Things (IoT). Companies are projected to spend upward of $5 trillion on the IoT during the next five years.4 These “things” include a wide range of products and services, from “dashboards” – which are information displays that enable users to conduct a multitude of internet transactions via one control center – to “remotes” such as smartphones and connected TVs.5

An interesting component of the IoT is that the more applications are developed, the more vulnerability users are exposed to for security risks.6 From the perspective of a user, whether that’s an individual or a company deploying an enterprise-wide software program, this may pose a financial threat.

However, from an investor’s perspective, the IoT offers a wide variety of opportunities, such as companies that develop sophisticated internet software and others that specialize in IoT safeguard technology.

Content prepared by Kara Stefan Communications

1 Federal Register. Dec. 2, 2016. “Protecting the Privacy of Customers of Broadband and Other Telecommunications Services” https://www.federalregister.gov/documents/2016/12/02/2016-28006/protecting-the-privacy-of-customers-of-broadband-and-other-telecommunications-services. Accessed May 19, 2017.

2 Tali Arbel. Associated Press. March 29, 2017. “AP Explains: What the death of broadband privacy rules means.” https://apnews.com/957a0429fbac445b8639f983910be689/ap-explains-what-death-broadband-privacy-rules-means. Accessed May 19, 2017.

3 Josephine Wolff. Slate. May 12, 2017. “The Malware Attacking the U.K.’s National Health Service Could’ve Been Stopped. Here’s Why It Wasn’t.” http://www.slate.com/blogs/future_tense/2017/05/12/the_malware_attacking_the_nhs_could_ve_been_stopped_here_s_why_it_wasn_t.html. Accessed May 19, 2017.

4 Peter Newman. Business Insider. Jan. 12, 2017. “The Internet of Things 2017 Report: How the IoT is improving lives to transform the world.” http://www.businessinsider.com/the-internet-of-things-2017-report-2017-1. Accessed May 19, 2017.

5 Andrew Meola. Business Insider. Dec. 19, 2016. “What is the Internet of Things (IoT)?” http://www.businessinsider.com/what-is-the-internet-of-things-definition-2016-8?IR=T. Accessed May 19, 2017.

6 Christie Terrill. Forbes. May 16, 2017. “What You Need to Know about Cybersecurity and The Internet of Things.” https://www.forbes.com/sites/christieterrill/2017/05/16/what-you-need-to-know-about-cybersecurity-and-the-internet-of-things/print/. Accessed May 19, 2017.

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.

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Considerations for Retiring Couples

Retirement is another chapter in your life; one that requires not only planning but day-to-day maintenance once you get there. And if you have a partner in life, it’s important to remember that your retirement, like a tandem bike, is built for two.

Planning for your own retirement is complicated enough, but doing so at the same time as your spouse can be daunting, with additional details to consider.

For starters, you and your spouse may have two completely different sets of needs in retirement.1 One may have health problems requiring expensive medications and frequent visits to the doctor. The other may live 20 years or more after the first spouse dies. Two people. Two different income needs.

When most people plan for retirement, they figure out how much household income they need. Their income sources may include two Social Security checks, a pension or other employer-sponsored plan, and withdrawals from personal savings accounts. But have you thought about how much income would be lost when one spouse passes away?

In some cases, the household income may go down to one Social Security check, less pension income and reduced personal savings once lingering medical bills and funeral expenses have been paid. In this situation, it’s helpful to know that a surviving spouse may be eligible for a lump sum death payment of $255 from Social Security to help pay for funeral or burial costs.2

Married couples frequently enjoy savings from shared costs by living in one house with one set of utility and cable bills. However, when one spouse passes away, those costs usually remain static; it’s not as if they’re reduced by half because only one spouse lives there going forward.

Consider this situation and ask yourself — will the surviving spouse need less money to maintain the household? In many cases, that person will likely need more money to hire someone to do some of the chores previously handled by the deceased spouse. Will the survivor have lower medical bills? Not likely if he or she lives into their 90s or beyond. What about housing? Will there be enough money should the survivor need living assistance or full-time nursing care down the road?

With all these questions to consider, it may be worth exploring various ways to help protect a surviving spouse’s financial situation, such as buying life insurance3 and/or working with a qualified attorney to establish a trust. Please keep us in mind if you and your spouse could use some help planning for retirement income. As an independent financial services firm, we help people create retirement strategies using a variety of insurance products to custom suit their needs and objectives.

Content prepared by Kara Stefan Communications

1 Jeff Brown. U.S. News & World Report. May 17, 2017. “Investing Advice for May-December Marriages.” http://money.usnews.com/investing/articles/2017-05-17/investing-advice-for-may-december-marriages. Accessed May 26, 2017.

2 Wesley E. Wright, Molly Dear Abshire. Laredo Morning Times. May 18, 2017. “Elder law: Social Security – Many fail to apply for death benefit.” http://www.lmtonline.com/news/article/Elder-law-Social-Security-Many-fail-to-apply-11156931.php. Accessed May 26, 2017.

3 Jamie Hopkins. Forbes. April 27, 2017. “Why Life Insurance Is Essential for Retirement Planning.” https://www.forbes.com/sites/jamiehopkins/2017/04/27/why-life-insurance-is-essential-for-retirement-planning/#4b15989b31cd. Accessed May 26, 2017.

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

 This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice. We are able to provide you with information but not guidance or advice related to Social Security benefits. Our firm is not affiliated with the Social Security Administration or any governmental agency.

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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