Financial Stress and What You can do About It

About half of the participants in a recent survey described financial security as not having to worry about day-to-day expenses.1 Unfortunately, the study revealed that 85 percent of Americans suffer from anxiety over their financial situation, especially how they would pay for an emergency expense. Sixty-seven percent believe financial stress affects their health, 61 percent admit it impacts their home life and more than half say it affects their social life.2

Another survey found that half of respondents were living paycheck to paycheck.3 It didn’t matter how much they earned; they all experienced relatively the same degree of financial stress. Even people earning more than $100,000 said they had a hard time putting money away for the future.4

Consider the following tips to help mitigate financial anxiety:

  • Create a budget to help keep track of incoming funds and outgoing expenses.
  • Establish a list of financial priorities for your discretionary income.
  • Develop a three-to-six month budget plan that includes larger, intermittent bills throughout the year, such as car and homeowner insurance and property taxes. Plug these line items into your master budget so you’ll know to apply discretionary income to those bills.
  • Stop ongoing expenses that you don’t use, such as a gym membership or subscriptions.
  • If you’re paying down revolving debt, consider ending your use of credit cards altogether.
  • Set specific financial goals, such as how much money you want to have saved by retirement. Then regularly save a fixed amount toward that goal.
  • Downsize your home or car for lower payments, insurance, taxes and maintenance bills.

A lot of financial stress can be alleviated by creating a strategy; simply taking proactive control of a situation can be very empowering. Once you’ve tasted relief, explore ways to create that sense of release more often. Physical exercise, such as walking, swimming or biking regularly can help.

Also consider taking classes where you engage in social activity with new people, such as yoga, tai chi, pottery or painting. While you don’t want to spend a lot of money on a new hobby, social interaction that enriches your life can do wonders for stress.

You’ll come to appreciate that some of the finer things in life don’t necessarily cost all that much.

1 Kim Blanton. Center for Retirement Research at Boston College. July 14, 2016. “Financial Anxiety Amid Economic Growth.” http://squaredawayblog.bc.edu/squared-away/financial-anxiety-amid-economic-growth/. Accessed Feb. 8, 2017.

2 Ibid.

3 Kim Blanton. Center for Retirement Research at Boston College. Jan. 12, 2017. “Financial Stress Rings in the New Year.”  http://squaredawayblog.bc.edu/squared-away/financial-stress-rings-in-the-new-year/. Accessed Feb. 8, 2017.

4 Ibid.

Content prepared by Kara Stefan Communications & Advisors Excel. 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.

Live Long or Prosper? How Retirees can do Both.

Some retirees underspend throughout their golden years, sacrificing quality of life to assure they don’t outlive their income. Others resist their desire to be philanthropic because of concerns that donations could leave them short on money down the road.1

A market downturn during the early years of retirement can be one of the biggest risks of running out of money. This may seem incongruous, since the earlier a downturn happens, the more time a portfolio has to recover. However, early loss of principal combined with steady withdrawals can lead to a challenging financial situation.

One common form of financial stability used to come in through a company pension plan. When combined with Social Security benefits, pensions gave retirees an idea of how much they could spend each month for the rest of their life.

Social Security is expected to be in good shape for the next 15+ years, but pensions are quickly becoming a thing of the past.2 If you don’t have or expect a pension when you retire, consider learning how you can create a steady and reliable income stream using an annuity from an insurance company. Annuities can help enhance quality of life throughout retirement by providing a similar sense of financial confidence that pensions once offered.

Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by company. Annuities are not a deposit of, nor are they insured by, any bank, the FDIC, NCUA or by any federal government agency. Guarantees and protections provided by insurance products including annuities are backed by the financial strength and claims-paying ability of the issuing insurer.

1 Bruce S. Udell. Kiplinger. January 2017. “Why Retirees Aren’t Enjoying Their Wealth.” http://www.kiplinger.com/article/retirement/T003-C032-S014-why-retirees-aren-t-enjoying-their-wealth.html. Accessed Feb. 8, 2017.

2 Carolyn Colvin. Social Security Administration. “Social Security Funded Until 2034, and About Three-Quarters Funded for the Long Term.” http://blog.ssa.gov/social-security-funded-until-2034-and-about-three-quarters-funded-for-the-long-term-many-options-to-address-the-long-term-shortfall/. Accessed Feb. 27, 2017.

Content prepared by Kara Stefan Communications & Advisors Excel. 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.

How AI May Impact Jobs

In recent years, there has been a concentrated effort to encourage more students to pursue careers in science, technology, engineering and math industries (STEM). However, jobs in those fields could be more likely to be replaced by artificial intelligence (AI) technology than jobs emanating from a liberals arts education.1

In an article penned for The Guardian late last year, renowned theoretical physicist Stephen Hawking observed that, “the rise of artificial intelligence is likely to extend this job destruction deep into the middle classes, with only the most caring, creative or supervisory roles remaining.”2

Research by Citibank concluded that 47 percent of U.S. jobs are at risk of automation, 35 percent in the United Kingdom and 77 percent in China.If you think those are just middle- and working-class manufacturing jobs, think again. It is projected that 40 percent of jobs in the U.S. banking industry could be eliminated.4

Consider that some investors now rely on “robo-advisors,” which use algorithms to make automated investment recommendations. Other white collar industries that currently deploy AI include paralegal, medical, marketing, education and even technology. There are even AI “journalists” used for fact checking and writing stories about sports, weather and other simple topics.5

Facebook uses an AI algorithm that identifies its worldwide database of members using facial recognition of photos, an application that offers ample potential for the law enforcement industry. And AI’s ability to assess patterns from sets of data can make it more effective than the human eye at detecting tumors in medical imaging.6

Companies like Google and Microsoft are investing in AI to develop computers that will be able to automate office work like preparing sales reports with just a verbal request.However, not all jobs of the future can or will be replaced with AI. In fact, for the time being, the technology is largely used to increase productivity by making some jobs easier.

1 Larry Alton. “What Will Happen When AI Starts Replacing White Collar Jobs?” Forbes. May 25, 2016. Web; http://www.forbes.com/sites/larryalton/2016/05/25/what-will-happen-when-ai-starts-replacing-white-collar-jobs/print/. Accessed Feb. 10, 2017.

2 Stephen Hawking. “This is the most dangerous time for our planet.” The Guardian. Dec. 1, 2016. Web; https://www.theguardian.com/commentisfree/2016/dec/01/stephen-hawking-dangerous-time-planet-inequality. Accessed Feb. 10, 2017.

3 Oscar Williams-Grut. “Robots will steal your job: How AI could increase unemployment and inequality.” Business Insider. Feb. 15, 2016. Web; http://www.businessinsider.com/robots-will-steal-your-job-citi-ai-increase-unemployment-inequality-2016-2?r=UK&IR=T. Accessed Feb. 10, 2017.

4 Leena Lao. “Here’s How Artificial Intelligence Is Going to Replace Middle Class Jobs.” Fortune. Oct. 17, 2016. Web; http://fortune.com/2016/10/17/human-workforce-ai/. Accessed Feb. 10, 2017.

5 Larry Alton. Forbes. May 25, 2016. “What Will Happen When AI Starts Replacing White-Collar Jobs?” https://www.forbes.com/sites/larryalton/2016/05/25/what-will-happen-when-ai-starts-replacing-white-collar-jobs/#710d3f221639. Accessed Feb. 27, 2017.

6 The Economist. May 14, 2015. “How machine learning works.” http://www.economist.com/blogs/economist-explains/2015/05/economist-explains-14?fsrc=scn/tw/te/bl/ed/howmachinelearningworks. Accessed Feb. 10, 2017.

7 Ibid.

Content prepared by Kara Stefan Communications & Advisors Excel. 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.

Leaving More than Money – A Legacy of Giving Back

According to a 2016 study, 91 percent of high net worth households gave to charity in 2015, while 50 percent volunteered their time. The majority of high net worth donors do not have family traditions around giving (such as volunteering as a family or giving together to a charity during the holidays) nor do they involve their children, grandchildren or other younger relatives. However, among the 29 percent who did involve their family, most of them (77 percent) found the experience to be personally rewarding.1

Philanthropy is about more than money; it can be a reflection of a person’s inherent desire to promote the well-being of others. While this trait may be instinctive for some, it also can be nurtured — particularly within families. And it’s never too early to start.

To help cultivate philanthropy within your own brood, consider their interests. Young children may be drawn to taking care of animals, while teens are likely to participate in school volunteer activities to bolster their college-bound resumes. Ask the younger members of your family about these charitable-minded activities and brainstorm ways you all can become more involved.

Volunteering together can offer an opportunity to bond and strengthen familial ties in ways you may not have experienced. For example, perhaps you can take a grandchild to a local animal shelter to help out with cleaning, grooming and socializing. Maybe you can cancel Thanksgiving dinner or move it to a different date so the whole family can help serve a meal at a local homeless shelter.

Sometimes philanthropy needs to be hands-on to truly understand how donations and resources impact people’s lives. And for philanthropists who are unable to make high-volume gifts, they can learn ways to become involved with local charities by volunteering their time.

To get started, ask each member of your family to write down their charitable interests on an index card. Then identify common goals and prioritize them. Consider how each family member can make a contribution, whether through donations, fundraising, administrative and management roles, or by rolling up their sleeves for volunteer work.

As for large charitable donations, we suggest working with a financial professional who can suggest financial vehicles to help support your family’s objectives. Consider how individual family members can participate in charitable decision-making and volunteer activities, with an eye toward fostering philanthropy in subsequent generations. By engaging both children and grandchildren in the philosophy and management of your family’s charitable giving, you can establish a living, growing legacy of philanthropy. We’ll be happy to discuss options for charitable giving, including possible insurance options, and how they might affect your retirement income strategy; just give us a call.

From ALS funding to support for disaster victims, we often are struck by a cause or a need that fuels our passion. When philanthropic commitment is shared by members of a family, it can create a stronger collective impact than mere monetary support.

1 U.S. Trust; Bank of America Corporation “The 2016 U.S. Trust Study of High Net Worth Philanthropy.” http://newsroom.bankofamerica.com/files/press_kit/additional/2016_US_Trust_Study_of_High_Net_Worth_Philanthropy_-_Executive_Summary.pdf. Accessed Aug. 28, 2017.

Content prepared by Kara Stefan Communications and Advisors Excel.

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.

Strategies for Early Retirement

Many people find they have to retire earlier than planned, often for health reasons or due to layoffs, and need to figure out how to make their retirement savings last.1 That’s why it’s important to determine the base amount of income you’ll need to live during retirement; examine your expenses and determine what is a necessity and what can be cut out. Be sure to also factor in possible health care needs.

Bear in mind that one retiree might fall short of a financial goal that another would consider a windfall, so determining what you can live on is completely subjective. Many people can live on less; the question is: How much less?

Next, estimate how long you (and your spouse) might live. You can find longevity calculators online, including the Social Security Administration’s at www.ssa.gov/oact/population/longevity.html.2 Then factor in the amount you’re scheduled to receive from Social Security; you can find that out by establishing an account at www.ssa.gov/myaccount.3

Once you’ve determined your Social Security benefit, along with any pension money you’ll receive, subtract that amount from the annual income you need. This will determine how much you need to withdraw each year from personal savings, such as a 401(k). To the extent you can limit withdrawals early on, either by getting part-time work or reducing living expenses, the longer your money can last.

Here are some potential strategies to help effectively utilize the retirement assets available to you:

  1. Convert to Lifetime Income – A retiree might consider using a portion of his or her savings to buy an immediate annuity. This irrevocable purchase exchanges a lump sum for a lifetime stream of fixed income guaranteed by an insurance company.
  2. Pay off Debt – If a homeowner is paying a mortgage after retirement, he or she might consider selling the home and using the proceeds to buy a less-expensive residence outright.
  3. Share Assets – Another option is for a homeowner to rent out space to help pay the mortgage and utilities, or to provide income if the house is already paid for.
  4. Apply for Benefits – Some people who are forced to retire due to poor health may qualify for Social Security disability benefits; learn how to apply at ssa.gov/disabilityssi.4

We can help you determine your income needs in retirement and work with you to create strategies through the use of insurance products to help you work toward your long-term retirement income goals – just give us a call.

Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured.

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

1 Marlene Y. Satter. BenefitsPRO. Dec. 4, 2017. “What is forcing workers to retire earlier than they planned? http://www.benefitspro.com/2015/12/04/what-is-forcing-workers-to-retire-earlier-than-the. Accessed June 22, 2017.

2 Social Security Administration. “Retirement & Survivors Benefits: Life Expectancy Calculator.” https://www.ssa.gov/oact/population/longevity.html. Accessed June 22, 2017.

3 Social Security Administration. https://www.ssa.gov/myaccount/. Accessed June 22, 2017.

4 Social Security Administration. “Disability Benefits.” https://www.ssa.gov/disabilityssi/. Accessed June 22, 2017.

Content provided by Kara Stefan Communications and Advisors Excel.

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.