The Psychology of Economics

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

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

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

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

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

Content prepared by Kara Stefan Communications.

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

2 Ibid.

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

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

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

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

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

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

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

Family Business Considerations

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

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

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

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

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

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

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

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

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

Content prepared by Kara Stefan Communications.

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

2 Ibid.

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

4 Ibid.

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

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

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

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

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

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

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

Vanishing Deductions

Money-Saving Tips

Beginning with the 2019 tax season, filing income-tax returns will no longer be “business as usual.” Some people may be happy to see their 2018 tax return streamlined and receive a higher refund to boot. However, others may lament lost deductions that had previously helped reduce their tax liability.1

The good news is that the standardized deduction will nearly double. Individual filers will receive a $12,000 deduction while married couples will get $24,000. However, in exchange for the simplicity, many itemized deductions will go away. The following are some of the more common ones.2

  • Dependent exemption — Taxpayers will no longer be able to subtract $4,050 from their taxable income for each dependent they claim. The newly doubled $2,000 child credit may help offset the loss of that deduction for some, but not for those whose children are in college.
  • SALT — Deductions for state and local taxes (SALT) will be capped at $10,000. This will mostly affect those who live in areas with high property tax areas, such as in South Florida, New York and
  • Mortgage interest deduction — Deductible interest will be capped for new mortgages valued at $750,000, down from $1 million.
  • Miscellaneous itemized deductions — Expenses such as unreimbursed employee-education expenses, tax-preparation services, investment fees and professional dues, among others, are no longer deductible.
  • Moving expenses — This deduction is completely eliminated for everyone except members of the armed forces.
  • Natural disasters — In the past, expenses not reimbursed by insurance or other relief programs could be deducted on your tax return. Now this deduction is available only to taxpayers in a presidentially designated disaster zone, typically made on a county-by-county basis.
  • Alimony — These payments are no longer deductible from federal taxes for any divorce that is executed after Dec. 31, 2018. However, there is no change in the tax treatment of alimony payments for divorces finalized before 2019.3

The content provided in this newsletter is designed to provide general information on the subjects covered. Neither our firm nor its agents or representatives may give tax advice. Be sure to speak with a qualified professional about your unique situation.

1 Maryalene LaPonsie. US News & World Report. Feb. 9, 2018. “10 Tax Deductions That Will Disappear Next Year.” https://money.usnews.com/money/personal-finance/taxes/articles/2018-02-09/10-tax-deductions-that-will-disappear-next-year. Accessed May 29, 2018.

Ibid.

3 Bill Bischoff. Marketwatch. Jan. 26, 2018. “New tax law eliminates alimony deductions — but not for everybody.” https://www.marketwatch.com/story/new-tax-law-eliminates-alimony-deductions-but-not-for-everybody-2018-01-23. Accessed May 29, 2018.

Deducting Home-Loan Interest

Planning Tip

The new tax law still allows a deduction for interest on a home equity loan, line of credit or second mortgage as long as the loan is used to buy, build or substantially improve the taxpayer’s primary or second home. Specifically, the interest is deductible only if the loan meets all three of the following criteria:1

  • The debt is secured by the underlying residence
  • The total of the refinanced debt is not greater than the cost of the residence
  • The proceeds are used to improve or expand the residence

However, the applicable loan is subject to a new $750,000 debt limit ($375,000 for a married taxpayer filing a separate return). This limit applies to the combined total of loans used to buy, build or improve the taxpayer’s main home and second home. If you have an existing home equity loan that does not qualify under these three criteria, the interest may no longer be deducted.2

 The content provided in this newsletter is designed to provide general information on the subjects covered. Neither our firm nor its agents or representatives may give tax advice. Be sure to speak with a qualified professional about your unique situation.

 1 IRS. Feb. 21, 2018. “Interest on Home Equity Loans Often Still Deductible Under New Law.” https://www.irs.gov/newsroom/interest-on-home-equity-loans-often-still-deductible-under-new-law. Accessed May 29, 2018.

2 Ibid.  

Content prepared by Kara Stefan Communications.

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 Some Retirees, Home is Where the Debt is

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

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

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

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

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

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

Content created by Kara Stefan Communications.

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

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

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

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

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

6 Sharon Epperson. CNBC. Nov. 16, 2017. “Don’t let surprise medical bills drain your retirement.” https://www.cnbc.com/2017/11/15/dont-let-surprise-medical-bills-drain-your-retirement.html. Accessed May 11, 2018.

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

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

Medicare News

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

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

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

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

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

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

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

Content created by Kara Stefan Communications.

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

Ibid.

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

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

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

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

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

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

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

Music Plays Instrumental Role in Healing Ailments

Hearing a familiar song from a happy period in your life, such as childhood, can instantly make you feel joyful. It’s as if you’re right back there — toe tapping, head bopping and singing along. Just as with our sight, smell and taste senses, positive auditory memories can enhance mood and transport us back to a happier time.

The power of music has led researchers to study various applications of music therapy to help people overcome the pain of health conditions, emotional challenges and even the cognitive decline that often accompanies old age.1

It’s not enough to believe we will all grow old gracefully. This usually doesn’t happen without planning. A big part of planning for retirement isn’t just how to provide enough income for the rest of our life, but how to help ensure we still enjoy a high quality of life no matter our age.

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; just give us a call. As for creating a plan to help enhance quality of life, consider some of these music therapy applications.

Music therapy is now a board-certified health profession. With approximately 7,500 practitioners throughout the country, the practice has become prevalent in nursing homes and hospices. The American Music Therapy Association reports about 10 percent of musical therapists work with terminally ill patients in a new discipline called end-of-life music therapy.2

 A growing body of research indicates music therapy can help improve cognitive function in patients with Alzheimer’s disease.3 It also can be used to aid in stress and pain management, memory enhancement, communication and physical rehabilitation.4

Further, the discipline has been found to help people with psychiatric problems, such as depression, trauma and schizophrenia. Music can help calm patients as well as help them process emotions, trauma and grief.5

Interestingly, the military has used forms of music therapy since the post-World War I era. Trained musical therapists use it as a tool to help wounded, injured or ill soldiers express their thoughts nonverbally. Research also shows music can be effective at increasing neuroplasticity in the brain, which is an important role in helping veterans address symptoms of PTSD and traumatic brain injuries.6

 Content prepared by Kara Stefan Communications.

1 Sharon Otterman. The New York Times. Jan. 15, 2018. “Music Therapy Offers an End-of-Life Grace Note.” https://www.nytimes.com/2018/01/15/nyregion/music-therapy-nursing-home-hospice.html. Accessed April 13, 2018.

2 Ibid.

3 Sherry Christiansen. Alzheimer’s Universe. July 24, 2017. “Quick Alzheimer’s Prevention Pearl: Studies Show Music Improves Cognition in People with Alzheimer’s Disease.” https://www.alzu.org/blog/2017/07/24/how-music-helps-with-alzheimers-prevention/. Accessed April 18, 2018.

4 American Music Therapy Association. 2018. “What is Music Therapy?” https://www.musictherapy.org. Accessed April 13, 2018.

5 Molly Warren. National Alliance on Mental Illness. Dec. 19, 2016. “The Impact of Music Therapy on Mental Health.” https://www.nami.org/Blogs/NAMI-Blog/December-2016/The-Impact-of-Music-Therapy-on-Mental-Health. Accessed April 18, 2018.

6 Frank Otto. Drexel University News Blog. March 20, 2018. “3 Things to Keep in Mind About Music Therapy in the Military.” https://newsblog.drexel.edu/2018/03/20/3-things-to-keep-in-mind-about-music-therapy-in-the-military/. Accessed April 13, 2018.

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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Cultural Influences From Abroad

They say variety is the spice of life. A variety of cultural experiences may even contribute to a longer life and cognitive sharpness. A new study links cultural activities, including exposure to other languages, as a strong influence in the way we learn, amass and assimilate new information.1

Some cultural influences may well impact longer lifespans. In Japan, which has one of the world’s oldest populations, people live with a philosophy of “ikigai.” Roughly translated, this phrase means “a reason to live,” or identifying one’s purpose in life. To discover one’s ikigai, start by answering the following questions:2

  • What do you love?
  • What are you good at?
  • What does the world need from you?
  • What can you get paid for?

This idea of living for something more spiritual than, say, a job or material possessions is also practiced by the people of Costa Rica. Ticos, as Costa Ricans are called, use the term “Pura Vida” to convey a range of greetings, from hello and goodbye to “everything’s cool.” The real value of the phrase, however, is that Pura Vida reflects the way many Ticos live: relaxed and appreciative of the simpler things in life. This attitude toward life has gained the country recognition as one of the happiest places in the world. To live “Pura Vida” means you’re thankful for what you have and do not dwell on what you lack.3

Whether finding your ikigai or living a Pura Vida lifestyle, these influences may be able to enrich an American’s retirement, even if we don’t have the means to travel extensively. Reading, watching documentaries and movies, and listening to foreign music all can help expose us to other cultures and expand our mind and thought processes. Ultimately, this may help us appreciate the lifestyle we’ve created for our retirement years. If you’d like help creating a retirement income strategy to help you pursue your retirement lifestyle goals, please call us for ideas.

In the U.S., perhaps the most influential culture is that of the Hispanic or Latino population, which the U.S. Census Bureau describes as people of “Cuban, Mexican, Puerto Rican, South or Central American or other Spanish culture or origin regardless of race.” At an estimated 54 million people, Hispanics are the largest minority in the U.S., and the Census Bureau expects that number to rise to 119 million by 2060.Their impact can be felt in all aspects of U.S. culture, including language, food and entertainment.

While the U.S. is influenced by other cultures, it also wields cultural power of its own. In a 2017 survey by U.S. News & World Report, the U.S. was ranked as having the third most influential culture in the world, largely due to popular contributions in music, movies and television. In first place was Italy, followed by France, with Spain and the United Kingdom rounding out the top five.5 In a separate portion of the survey that ranked overall influence, the U.S. ranked first, followed by Russia.6

Content prepared by Kara Stefan Communications.

1 Science Daily. Aug. 4, 2017. “Cultural activities may influence the way we think.” https://www.sciencedaily.com/releases/2017/08/170804103911.htm. Accessed Oct. 17, 2017.

2 Laura Oliver. World Economic Forum. Aug. 9, 2017. “Is this Japanese concept the secret to a long, happy, meaningful life?” https://www.weforum.org/agenda/2017/08/is-this-japanese-concept-the-secret-to-a-long-life/. Accessed Oct. 17, 2017.

3 Vacations Costa Rica. 2017. “Pura Vida! Costa Rica Lifestyle.” https://www.vacationscostarica.com/travel-guide/pura-vida/. Accessed Oct. 17, 2017.

4 CNN. March 31, 2017. “Hispanics in the US Fast Facts.” http://www.cnn.com/2013/09/20/us/hispanics-in-the-u-s-/index.html. Accessed Oct. 27, 2017.

5 U.S. News & World Report. 2017. “Cultural Influence.” https://www.usnews.com/news/best-countries/influence-rankings. Accessed Oct. 17, 2017.

6 U.S. News & World Report. March 7, 2017. “Most Influential Countries.” https://www.usnews.com/news/best-countries/international-influence-full-list. Accessed Oct. 17, 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.

Retirement Conversations: What Do You Do?

We spend a lifetime working, building a career, raising a family, etc. Then we retire, and some unsuspecting acquaintance asks, “What do you do?” It’s a whole new ballgame now.

This can be a difficult question for new retirees. Our gut instinct is to identify ourselves by our occupations — “I’m a lawyer,” I’m an office manager,” “a teacher” or a “stay-at-home mom.” When you spend that much time in one role, it becomes a part of who you are. But is that still who you are once you retire? Some people might say, “I used to be a lawyer.” After a while, they may get used to simply saying, “I’m retired.” Yet this process of figuring out how to respond may be directly correlated to how long it takes to figure out who we are in retirement.1

Some people spend years dreaming about what they’ll do when they retire, so they might answer, “I’m now an amateur golfer.” Or gardener. Or grandchild-babysitter. It’s worth taking some time to build a retirement identity for yourself; not just to answer that question, but to establish your own purpose for getting up in the morning. One of the keys to the retirement you desire is aligning your lifestyle goals with your retirement income.  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.

A recent study conducted by Humana found that the more optimistic people are by nature, the younger they feel. In fact, the most optimistic retirees also rated high in areas of good health, getting enough sleep, feeling confident and overall happiness. The study concluded that working on a more positive attitude is important to retirees’ overall health and well-being.2

But what if you aren’t naturally optimistic? One tip for achieving optimism is to practice. Work on identifying negative thoughts and replacing them with positive ones. The general idea is to “fake it until you make it.”3

Researchers at Stanford University analyzed a longevity study of 60,000 diverse U.S. adults between 1990 and 2011 in areas such as demographics, medical history, physical exam and physical activity data. One of the more interesting findings was that people who perceived themselves as “a lot less active” than peers had a higher risk of death — regardless of how much they exercised or other health risk factors such as smoking or obesity. Apparently, it’s not just our health that matters, but also how we feel about ourselves.4

If we believe we are less active than everyone else — and are stressed and depressed about that — it can negatively impact our health. This is an important issue for physicians to consider, because warning about dangerous behaviors such as smoking, inactivity or overeating apparently can actually worsen the problem.5

Perhaps one way to foster optimism is to create a plan for how to spend your days. For example, start a new venture. It doesn’t matter if it’s for profit or not; the main incentive is to provide a purpose. Maybe follow up on a good idea that no one in your area is doing or find a need you can fulfill. When people retire, they often find they have time to do things that they never got to do before, and they also may have time to do things that need to get done — that no one else has time to do.

For the first time in history, there are about to be more people over age 65 than under age five.6 Furthermore, we have a shortage of care providers. Of course, not everyone will need a full-time caregiver; some may just need a little help — perhaps with remembering to turn off appliances or going to doctor appointments. Companies are currently looking at artificial intelligence for more ways — more gadgetry — to help address these issues and allow people to age longer at home.7

But for now, small, kind and oh-so-helpful gestures may be all some people need. Life is full of these types of opportunities — ways to feel good, help others and get the exercise we need without going to a gym. Here’s one idea: Some elderly people have a hard time getting their trash can to the curb for pickup, so perhaps that’s a volunteer job that provides purpose and exercise for a younger retiree while helping others.

Look around. See how you can contribute. And the next time someone asks you what you do, create yourself a brand-new identity title.

Content prepared by Kara Stefan Communications.

1 Joe Casey. Booming Encore. “Answering in Retirement: So, What Do You Do?” http://www.boomingencore.com/retirement-what-do-you-do. Accessed Nov. 13, 2017.

2 Humana. Oct. 4, 2017. “Survey: Sense of Optimism Linked to the Perceived Mental and Physical Health of Seniors.” http://press.humana.com/press-release/current-releases/survey-sense-optimism-linked-perceived-mental-and-physical-health-sen. Accessed Dec. 5, 2017.

3 Susan Williams. Booming Encore. “The Relationship Between Optimism, Health and Aging.” http://www.boomingencore.com/relationship-optimism-health-aging/. Accessed Nov. 13, 2017.

4 Monique Tello. Harvard Health Publishing. Aug. 14, 2017. “Mind over matter? How fit you think you are versus actual fitness.” https://www.health.harvard.edu/blog/mind-over-matter-how-fit-you-think-you-are-versus-actual-fitness-2017081412282. Accessed Nov. 13, 2017.

5 Ibid.

6 Elena Holodny. Business Insider. May 16, 2016. “We’re about to see a mind-blowing demographic shift unprecedented in human history.” http://www.businessinsider.com/demographics-shift-first-time-in-human-history-2016-5. Accessed Dec. 5, 2017.

7 Ian C. Schafer. Software Development Times. Nov. 7, 2017. “IBM expands AI research to support an aging population.” https://sdtimes.com/ibm-expands-ai-research-support-aging-population/. Accessed Nov. 13, 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.

The Impact of Income Inequality

As it turns out, income inequality can be an issue for all society, not just the poor.

A new study of high-earning clients of a bank’s wealth management unit tracked the fortunes of male and female young adults to learn how income inequity would impact their lives. The assumptions had both genders starting out in the job market earning a salary of at least $100,000 and in possession of an inheritance of $1 million.1 The following are some of the study’s findings:2

  • A 25-year-old woman living in a wealthy country earns 10 percent less, on average, than a man the same age.
  • By age 85, the income gap will result in the woman having 38 percent less wealth than the man.
  • The gap will widen if the woman takes a year off from work or decides to work part time for a while.
  • The problem is exacerbated by the fact that women are expected to live longer and must stretch their wealth over a longer

Retirement planning is challenging enough without the issue of lower wages throughout one’s career. Lower earnings mean fewer opportunities to save and invest, in addition to a reduced standard of living. Whether married, divorced or single, we help clients create retirement strategies through the use of insurance products that help them work toward their long-term retirement income goals. Give us a call to learn more.

Interestingly, the U.S. women’s labor force participation peaked in 2000. At the time, this had a big impact on household income and broader economic growth. Since then, as prime-age women have dropped out of the workforce, the national growth rate has suffered.3

Over the past two years, real median household income in the U.S. has increased by 3.2 percent, but this follows 17 years of stops and starts. Even today’s positive numbers can be deceptive, because they do not reflect areas of the country that are still struggling. For example, an analysis of data from the 2000 Census and the 2016 American Community Survey found that 86 urban areas — including Miami, Orlando, Phoenix, Tucson, Chicago, Indianapolis and Milwaukee — suffered declines in median income between 10 and 15 percent from 1999 to 2016. Many of these areas lost a large number of middle-income manufacturing jobs during the 2000s that have not been replaced.4

A new large-scale study found poverty-level household income can have a significant impact on children’s development, ranging from cognitive and educational outcomes to social development and physical health. The study included data from past research that found that when low-income families do receive an influx of cash, this money is usually spent on fruit, vegetables, books, clothes and toys.5

Aligned with this type of insight, some countries are looking at ways to solve some of their largest societal issues through a basic income. This year, as part of a two-year, limited trial involving 2,000 unemployed citizens, Finland became the first European country to provide a “no-strings-attached” monthly payment to cover essential costs of living. The basic income (about $587 a month) replaces any other current unemployment benefits and will continue even if recipients get a job. Cities in the Netherlands and Canada have scheduled similar pilot programs.6

In the U.S., test programs have found that giving homes to the homeless is the cheapest way to reduce homelessness, and paying high-risk people not to be involved in gun violence has been remarkably effective at reducing a city’s murder rate.7

Content prepared by Kara Stefan Communications.

1 Reuters. Oct. 23, 2017. “Pay gap to affect high-earning women’s retirement lifestyle: study.” https://www.reuters.com/article/us-global-women-pay-gap/pay-gap-to-affect-high-earning-womens-retirement-lifestyle-study-idUSKBN1CS0Z7. Accessed Nov. 28, 2017.

2 Ibid.

3 Jay Shambaugh, Ryan Nunn and Becca Portman. Brookings. Nov. 1, 2017. “Lessons from the rise of women’s labor force participation in Japan.” https://www.brookings.edu/research/lessons-from-the-rise-of-womens-labor-force-participation-in-japan/. Accessed Nov. 28, 2017.

4 Alan Berube. Brookings. Oct. 12, 2017. “Five maps show progress made, but mostly lost, on middle-class incomes in America.” https://www.brookings.edu/research/five-maps-show-progress-made-but-mostly-lost-on-middle-class-incomes-in-america/. Accessed Nov. 28, 2017.

5 The London School of Economics and Political Science. Centre for Analysis of Social Exclusion (CASE). “Does Money Affect Children’s Outcomes? An update. http://sticerd.lse.ac.uk/case/_new/research/money_matters/report.asp. Accessed Dec. 7, 2017.

6 Drake Baer. New York magazine. Jan. 4, 2017. “What Happens When You Give Free Money to Poor People.” https://www.thecut.com/2017/01/the-psychology-of-basic-income.html. Accessed Nov. 28, 2017.

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.