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. 

Notes on U.S. Infrastructure

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

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

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

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

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

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

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

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

Content prepared by Kara Stefan Communications

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

2 Ibid.

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

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

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

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

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

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

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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.

Personal Productivity

Do you ever feel as if you don’t get enough done in a day? Many of us tend to do what we absolutely must, tackling easy tasks instead of launching into bigger projects or the pursuit of longer-term goals. In other words, we cook, clean, answer emails and catch up with the day’s news – but do we ever start that novel or the side business we’ve been considering?

One of the causes of poor productivity may be lack of a plan. Ben Franklin planned out everything he would do each day at what time, tracked in half-hour time blocks.1 In fact, studies have shown that writing a plan is an effective way of improving productivity. Further, writing out a plan by hand – as opposed to typing it on a computer or smartphone calendar – is even more effective. Apparently, it makes us feel more connected to the material because we use the frontal lobe of the brain for both writing and planning, as well as problem solving.2

According to a recent article in Inc. magazine, a few simple habits can help make us more productive. They include setting basic building blocks toward a goal, creating benchmarks for incremental success and using only essential tools – don’t spend a lot of time and money unnecessarily.3

Some of these tips are also worthwhile practices for retirement saving and budgeting. After all, it’s a good idea to have a strategy for retirement income – a written one is best. Focusing on small, regular savings can help you meet incremental goals, and making commonsense decisions about what you do and don’t need to spend money on in retirement can help reduce the amount of income you’ll need. If you’d like some more ideas on ways to help make your retirement savings more productive through the use of insurance products, please give us a call.

Sometimes all we need to make ourselves more productive is to take a break from the action. However, it’s best not to take a long one – just enough to distract your brain so it returns to the task re-energized. In that break, you could stand and stretch, complete a quick chore – like paying a bill online – or respond to a text or email.4 Other productivity boosters include taking a 20-minute power nap and spending some time outdoors – preferably in the sunshine.5

Bear in mind that productivity isn’t about how many hours there are in a day, but how well you use them. A new study out of the United Kingdom said the average worker would be more productive if he or she were expected to work only three hours a day. That’s because the average office worker is generally engaged in actual work for only that long – the rest of the day is spent checking social media, visiting news websites, chatting with coworkers, etc. If we weren’t expected to be at our job for a full eight hours – if we could leave as soon as we got “X” amount of work done – it’s easy to imagine that people would become a lot more productive in less time.6

If you’re retired, consider translating this idea into your usual day. Imagine that long-term task you want to accomplish is your job, and you have to be “at work” for a full hour each day. The rest of the day is all yours for everything else. Would you be more productive in that one hour?

Content prepared by Kara Stefan Communications.

1 Amy Carleton. TheCut.com. Oct. 11, 2017. “The Centuries-Old Strategy That Turbocharged My Productivity.” https://www.thecut.com/2017/10/the-centuries-old-strategy-that-turbocharged-my-productivity.html?utm_campaign=sou&utm_source=tw&utm_medium=s1. Accessed Oct. 24, 2017.

2 Ibid.

3 Julian Hayes II. Inc.com. Oct. 25, 2017. “These 5 Overlooked Habits Will Instantly Make You More Creative and Productive.” https://www.inc.com/julian-hayes-ii/5-simple-habits-that-will-immediately-boost-your-productivity.html. Accessed Oct. 25, 2017.

4 Richard Moy. Inc.com. Oct. 20, 2017. “A 5-Minute Routine to Jolt Your Productivity.” https://www.inc.com/the-muse/how-to-boost-energy-at-work-5-minute-routine.html. Accessed Oct. 25, 2017.

5 Stephanie Vozza. Fast Company. Oct. 12, 2015. “15 Habits That Will Totally Transform Your Productivity.” https://www.fastcompany.com/3051540/15-habits-that-will-totally-transform-your-productivit. Accessed Oct. 24, 2017.

6 Arielle Tschinkel. Hellogiggles.com. Sept. 28, 2017. “A new study shows that a 3-hour work day may be better for productivity.” https://hellogiggles.com/lifestyle/money-career/3-hour-work-day-productivity/. Accessed Oct. 24, 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.

How Losing Sleep Could Translate to a Loss of Money

Some teenagers seem to sleep a lot. As parents and grandparents, we can find this rather aggravating. But the fact is, as we get older, our sleep patterns may change, and our sleep can be less restful.1 Perhaps it’s a good idea to let young people sleep in peace while they still can.

Scientists say young adults require about nine hours of sleep a day, on average. If they get less than eight hours, they may have a harder time paying attention. Full-grown adults, on the other hand, need an average of seven and a half hours. Unfortunately, studies show about one-third of adults in Western societies get less than that on a regular basis.2

A recent study by the University of Zurich and the University Hospital Zurich found a correlation between chronic lack of sleep and increased risk-seeking behavior. Scientists trace the link to the brain’s right prefrontal cortex, which is directly connected with higher risk-seeking behavior. The researchers theorize that when a person persistently does not get enough sleep, this area of the brain does not recover properly, which prompts behavioral changes. Interestingly, the researchers found that study subjects did not notice they engaged in riskier behaviors and therefore were not cognizant of this relationship with sleep patterns.3

The study’s authors observed that sound sleep, of the appropriate duration, is critical for good decision making — especially for political and economic leaders whose daily decisions impact the larger society.4 This advice is also worth pursuing in our own lives. In other words, avoid making important decisions when you haven’t been sleeping well.

As financial professionals, we are here to help guide you. We’ll give your retirement income goals our full attention; just give us a call to set up an appointment to discuss how we can help you create a retirement income strategy through the use of insurance products.

Although we often hear that everyone needs a full eight hours of sleep each night, the actual amount varies by individual — usually between seven and nine hours.Just one night of insufficient sleep can make us cranky and too tired for healthy activities — like engaging in exercise or preparing a nutritious meal.6

Over time, sleep deprivation can increase the risk of developing a variety of chronic health problems, including obesity, diabetes, high blood pressure and heart disease. It may make us more vulnerable to getting sick when exposed to a cold virus. Chronic lack of sleep also can make us more susceptible to experiencing depression and anxiety.7

Women are 40 percent more likely to suffer from insomnia or symptoms of insomnia compared to men, but the reasons for this are unclear. Some researchers hypothesize that women’s traditional role in society as caregivers could be a contributing factor. Furthermore, single parents who serve as both caregivers and financial providers are at higher risk of insomnia. Some scientists speculate the sleep circuitry for women could be different from men and, when combined with social roles as both worker and caregiver, this may result in a higher risk for sleep disorders.8

While the length and quality of sleep is a personal matter, it cumulatively has an impact on the economy. According to a study by RAND Europe, the United States loses approximately $411 billion a year due to workers who sleep less than six hours a night — which represents around 2.28 percent of U.S. gross domestic product. However, if those poor sleepers got one extra hour of sleep each night, the data suggests about $226.4 billion could be added back to the economy.9

Content prepared by Kara Stefan Communications.

National Sleep Foundation. “Aging and Sleep.” https://sleepfoundation.org/sleep-topics/aging-and-sleep. Accessed Dec. 29, 2017.

2 ScienceDaily. Aug. 28, 2017. “Chronic lack of sleep increases risk-seeking.” https://www.sciencedaily.com/releases/2017/08/170828102725.htm. Accessed Dec. 19, 2017.

3 Ibid.

4 Ibid.

5 William Kormos, M.D. Harvard Medical School. May 2016. “Ask the Doctor: The right amount of sleep.” https://www.health.harvard.edu/staying-healthy/ask-the-doctor-right-amount-of-sleep. Accessed Dec. 19, 2017.

6 Julie Corliss. Harvard Medical School. July 2017. “The health hazards of insufficient sleep.” https://www.health.harvard.edu/staying-healthy/the-health-hazards-of-insufficient-sleep. Accessed Dec. 19, 2017.

7 Ibid.

8 MedicalXpress. Dec. 18, 2017. “New guide aims to unmask unique challenges women face in getting healthy sleep.” https://medicalxpress.com/news/2017-12-aims-unmask-unique-women-healthy.html. Accessed Dec. 19, 2017.

9 Sandee LaMotte. CNN. Sept. 27, 2017. “Sacrificing sleep? Here’s what it will do to your health.” http://www.cnn.com/2017/07/19/health/dangers-of-sleep-deprivation/index.html. Accessed Dec. 19, 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.

Artificial Intelligence: Innovation for Today’s World

Artificial intelligence (AI) is rapidly changing the way businesses build products and even provide customer service. We now have automated virtual assistants and “chatbots” answering customer service calls.1 We even have self-driving cars being tested for pizza delivery.2

These quantum leaps in technological advances present both opportunities and challenges. For example, the way we have adopted online financial transactions over the past 10 to 15 years has made everything from banking and paying bills to applying for a mortgage so much more convenient. However, as the recent Equifax security breach impacting more than 145 million people demonstrates, housing that much data in one central location creates a single-entry point for would-be hackers.3

That’s one reason we believe it’s important to work face to face with financial advisors you know and trust. Regardless of where technology takes us, there’s really no substitute for personal interaction, particularly when it comes to planning for your family’s insurance, higher education and retirement income needs. We appreciate the value of combining human intelligence with empathy and understanding, and we know our clients do as well. In this rapidly advancing world of artificial intelligence, it’s important to offer both convenience and personal service.

With that said, we work to keep up with innovations and their applications for today’s world, especially when they may create potential investment opportunities. There are all kinds of innovative things to report. The use of connected devices such as wearables, residential electric and gas meter readers, drones and business self-checkout terminals is expected to grow by 31 percent this year over 2016. Today’s number of 8.4 billion devices in use is projected to grow to 20.4 billion connected devices by 2020.4

AI devices, such as drones, are being adapted for all kinds of creative uses. Researchers in Australia have developed flying drones capable of doing three things:5

  1. Identifying sharks near swimmers and surfers
  2. Amplifying warnings to beachgoers via an on-board loudspeaker
  3. Sending out electrical impulses that irritate sharks and deter them from entering populated areas

One way AI can be more effective than the human brain is its capacity to access and analyze vast more stores of data. As humans, we possess memory and recall, but AI machines can be loaded with an infinite amount of data that can be scanned and identified quickly. Farmers are using this technology via smartphone to take photos of ailing crops, from which AI can pinpoint disease with up to 98 percent accuracy.6

In the construction industry, AI is being used to help project managers track the most egregious potential malfunctions based on plan specifications, phase timing and severity. This helps keep projects on time and on budget with a laser-like focus on safety and quality.7

AI is also having an impact in the retail industry. British fashion icon Burberry requested and uploaded scores of data regarding their clients’ buying habits. This enables frontline retail clerks to make immediate recommendations to complement client selections based on what customers purchased in the past. The intelligence has created a type of personalized shopping service that has proven enormously successful.8

Moreover, the retailer has been able to cut down on counterfeit sales by developing technology that can detect if an item is a Burberry “bootleg” product by analyzing a photo of it.9

Content prepared by Kara Stefan Communications.

1 Shep Hyken. Forbes. July 15, 2017. “AI and Chatbots Are Transforming The Customer Experience.” https://www.forbes.com/sites/shephyken/2017/07/15/ai-and-chatbots-are-transforming-the-customer-experience/#31527b2941f7. Accessed Oct. 13, 2017.

2 Amar Toor and Tamara Warren. The Verge. Aug. 29, 2017. “Domino’s and Ford will test self-driving pizza delivery cars.” https://www.theverge.com/2017/8/29/16213544/dominos-ford-pizza-self-driving-car. Accessed Oct. 13, 2017.

3 Bloomberg. Oct. 2, 2017. “Equifax Says 2.5 Million More Americans May Be Affected by Hack.” https://www.bloomberg.com/news/articles/2017-10-02/urgent-equifax-2-5-million-more-americans-may-be-affected-by-hack. Accessed Oct. 2, 2017.

4 Liam Tung. ZDNet. Feb. 7, 2017. “IoT devices will outnumber the world’s population this year for the first time.” http://www.zdnet.com/article/iot-devices-will-outnumber-the-worlds-population-this-year-for-the-first-time/. Accessed Oct.13, 2017.

5 Charlotte Edmond. World Economic Forum. Sept. 4, 2017. “Meet Australia’s beach-protecting, AI-powered shark drones.” https://www.weforum.org/agenda/2017/09/australia-shark-drones-artificial-intelligence/. Accessed Oct. 2, 2017.

6 Jamie Condliffe. MIT Technology Review. Oct. 2, 2017. “OK, Phone: How Are My Crops Looking?” https://www.technologyreview.com/the-download/609028/ok-phone-how-are-my-crops-looking/. Accessed Oct. 2, 2017.

7 Zach Mortice. Redshift. Oct. 2, 2017. “Machine Learning Eases Construction Project Management—and Prevents Catastrophes.” https://www.autodesk.com/redshift/machine-learning-construction-project-management/. Accessed Oct. 2, 2017.

8 Bernard Marr. Forbes. Sept. 25, 2017. “The Amazing Ways Burberry Is Using Artificial Intelligence and Big Data to Drive Success.” https://www.forbes.com/sites/bernardmarr/2017/09/25/the-amazing-ways-burberry-is-using-artificial-intelligence-and-big-data-to-drive-success/#24388a014f63. Accessed Oct. 2, 2017.

9 Ibid.

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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Working Longer

Ah, the life questions we face. Young adults contemplate which college to attend and how that might affect their future. Women – and increasingly often, men – ponder whether to stay home and raise children, work or both. People contemplate job changes and relocations. And then, of course, a big question: When should I retire? One report observed that these days, about a third of adults ages 65 to 69 are continuing to work, and one-fifth of people 70 to 74 years old are working as well. The majority of them are working full time.1

If you get to make the decision to continue working all on your own, you are fortunate. Many people are forced to retire earlier than they’d like due to health reasons or because they are let go by their employer.2 If you can continue working, there can be many benefits, such as more time to save for retirement, employer-sponsored health insurance coverage, access to a social network, intellectual engagement and a place to go every day where you feel needed and important.

These are all good reasons to work longer. But whether you do so or not, you’re going to need a well-thought-out retirement income strategy. Using a variety of insurance products, we can help you create a strategy designed to help you to live the kind of retirement you’ve worked hard for. Contact us today to get started on your retirement income strategy.

If you are planning to work longer, consider that you don’t necessarily have to keep your current job. If you like it, that’s great. But if not, you might be able to phase into another role at your company, work in a similar position at another company or even take a completely different job in another industry. As we get older, we sometimes reflect back on what we’ve done, or didn’t do, and what we would do differently. If you’ve always been interested in another field, find out what it would take to break into it. If you’d like more time to pursue a hobby, figure out if there’s a way to turn it into a career.3

For example, if you love football, consider announcing for games at a local high school, coaching or refereeing. Apply to be an intern in a different field, write movie reviews for your local newspaper or work in a friend’s shop. While these jobs may not pay all that well, they may pay more than the retirement alternative of no outside income. By stringing together a variety of paying and volunteer gigs, you not only can supplement your retirement income but pursue passions and hobbies, and create quite a busy and engaged retirement lifestyle.

If you’d like a different job that can potentially pay substantial income, consider becoming a real estate agent. Many mature adults have the right qualities for the role – they know their community and neighborhoods, have a broad network of local contacts, have experience buying and selling their own homes, and understand the concerns and issues of new buyers. Furthermore, real estate is a relatively easy field to enter, and you have a certain degree of flexibility so you can work as much as you need for your income requirements.4

Another flexible job in which you may be able to use your previous work experience is as a freelance writer. Whether writing for your local paper or industry trade journals, writing is something you can practice on your own time to improve without extra schooling or training.

The point is, you may enjoy working longer and benefit from all of the associated advantages. However, if you don’t want to continue working in your current job, your options aren’t limited. You have knowledge and experience to rely on, which, when you think about it, is a whole lot more than you had when you started your career.

Content prepared by Kara Stefan Communications.

1 The American College of Financial Services. Aug. 2, 2017. “5 Things to Tell Clients about Working Past Retirement Age.” http://knowledge.theamericancollege.edu/blog/5-things-to-tell-clients-about-working-past-retirement-age. Accessed Sept. 11, 2017.
2 Marlene Y. Satter. BenefitsPRO. Dec. 4, 2015. “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 Sept. 29, 2017.
3 Robert Powell. USA Today. Feb. 27, 2017. “How to keep earning a paycheck in retirement.” https://www.usatoday.com/story/money/personalfinance/retirement/2017/02/27/how-keep-earning-paycheck-retirement/98266500/. Accessed Sept. 11, 2017.
4 Maryalene LaPonsie. US News & World Report. May 8, 2015. “Real Estate: The Ultimate Second Career for Seniors.” https://money.usnews.com/money/retirement/articles/2015/05/08/real-estate-the-ultimate-second-career-for-seniors. Accessed Sept. 11, 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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Legislative Updates

With so much attention focused on the rifts among and between political parties and the news media, it may seem as if little actual legislation is making its way through our democratic process. However, while President Trump’s major initiatives – Affordable Care Act repeal, tax reform and infrastructure improvements – haven’t been enacted, Trump has signed more than 40 bills since taking office in January.1

Although the political situation may present frustration for people trying to make prudent decisions about their financial future, we remind you that finances are personal. Your financial decisions should reflect your own goals and timeline. We are happy to evaluate your retirement income strategy and make recommendations utilizing insurance products to help you work toward your objectives.

Here is an overview of some of the recent legislation Congress has passed:

  • Securing our Agriculture and Food Act (H.R. 1238) – This bill authorizes the Department of Homeland Security to protect efforts related to food, agriculture and veterinary defense from acts of terrorism and other high-consequence events that pose a risk to homeland security.3
  • Public Safety Officers’ Benefits Improvement Act of 2017 (S. 419) – This bill revises requirements for the Public Safety Officers’ Benefits program, which provides death, disability and education benefits to public safety officers who are killed or injured in the line of duty, as well as to their survivors. The bill includes provisions to expedite the payment of benefit claims.5

Content prepared by Kara Stefan Communications.

1 Jennifer Hansler. CNN. Aug. 3, 2017. “President Trump has signed 43 bills into law. Here’s what they do.” http://www.cnn.com/2017/06/29/politics/president-trump-legislation/index.html. Accessed Aug. 18, 2017.

2 GovTrack. 2017. “H.R. 3364: Countering America’s Adversaries Through Sanctions Act.” https://www.govtrack.us/congress/bills/115/hr3364. Accessed Aug. 18, 2017.

3 GovTrack. 2017. “H.R. 1238: Securing our Agriculture and Food Act.” https://www.govtrack.us/congress/bills/115/hr1238. Accessed Aug. 18, 2017.

4 GovTrack. 2017. “S. 1094: Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017.” https://www.govtrack.us/congress/bills/115/s1094. Accessed Aug. 18, 2017.

5 GovTrack. 2017. “S. 419: Public Safety Officers’ Benefits Improvement Act of 2017.” https://www.govtrack.us/congress/bills/115/s419. Accessed Aug. 18, 2017.

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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Jobs After Age 55 

The good news is 62- to 64-year-olds experienced the largest increase in jobs between 2007 and 2014.1 The not-so-good news is that many of those jobs are not of the upscale, high-paying variety.2

New research from the Center for Retirement Research at Boston College offers insights into the type of work that older people are securing today:3

  • The jobs are high on service and low on physical labor
  • Service jobs: managers, sales supervisors, accountants, real estate sales, property management
  • Low-skilled jobs: truck drivers, janitors, nursing aides, child care, retail, cab driver
  • Valued skillsets: dependability, outdoor work
  • Jobs that pay around 10 percent less than those of younger workers

A survey of households and individuals from the latest census found that, between 2008 and 2012, older workers (62+) with a college degree had less than a 50 percent chance of finding work, while those without a college degree had only a 35 percent chance.4

During an economic downturn, it’s not uncommon for employers to lay off employees, and many older workers end up getting more pink slips than others. One reason may be because they tend to earn more, so some workplaces may be inclined to hire younger, lower-paid employees to improve profit margins.5

While this may sound like age discrimination, lawsuits along those lines have become harder to win. In 2009, a court ruling made it more difficult for workers to sue for age discrimination. Plaintiffs must now prove that advanced age was the main reason for being let go — not just a contributing factor.6

Even aging workers who continue working at the same company will likely find their income doesn’t increase as much as it did when they were younger. A 2015 Federal Reserve study found that, from ages 45 to 55, wages decrease by 9 percent; they then drop another 9 percent from ages 55 to 65.7

The job situation may be more challenging for women, in part because they tend to live longer than their husbands and are therefore more likely to spend some part of their retirement living on one income. According to U.S. Labor Department projections, about one in seven women work past age 65, and within eight years that number will rise to nearly one in five.8

Working longer isn’t all bad, from a financial or social standpoint. It enables people to save longer, give their retirement assets more opportunity to accumulate, decreases how long they’ll have to live on their retirement savings and enables them to save money via employer-based health insurance.9 Plus, work provides cognitive and social engagement, which for many is a lot more fun than sitting at home or even traveling alone.

Content prepared by Kara Stefan Communications. 

Quoctrung Bui. The New York Times. Aug. 18, 2016. “More Older People Are Finding Work, but What Kind?” http://www.nytimes.com/2016/08/18/upshot/as-more-older-people-seek-work-they-are-put-into-old-person-jobs.html?_r=0. Accessed Sept. 19, 2016.
Ibid.
3 Ibid.
4 Ibid.
Bob Sullivan. CNBC. July 7, 2016. “For older workers, getting a new job is a crapshoot.” http://www.cnbc.com/2016/07/07/for-older-workers-getting-a-new-job-is-a-crapshoot.html. Accessed Sept. 19, 2016.
6 Ibid.
7 Teresa Ghilarducci. PBS. Jan. 14, 2016. “Why women over 50 can’t find jobs.” http://www.pbs.org/newshour/making-sense/women-over-50-face-cant-find-jobs/. Accessed Sept. 19, 2016.
8 Nick Timiraos. The Wall Street Journal. Feb. 22, 2016. “How Older Women Are Reshaping U.S. Job Market.” http://www.wsj.com/articles/older-women-reshape-u-s-job-market-1456192536. Accessed Sept. 19, 2016.
9 Kerry Hannon. Forbes. July 3, 2016. “5 Tips To Help Women Work Longer.” http://www.forbes.com/sites/nextavenue/2016/07/03/5-tips-to-help-women-work-longer/#74c7bf943156. Accessed Sept. 19, 2016.

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

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

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The Science Behind Decision Making

In the 1940s, 90 percent of the stock market was owned by individual household investors. Today, with the widespread use of investment banking and mutual fund investing, individuals are responsible for trading only 20 percent of U.S. corporate equity.1

Do we no longer trust ourselves with investment decisions? You might think that, with so much information now accessible via the internet, more people would invest on their own. However, the fact remains that there’s really too much information now available, much of it from unreliable sources, and very little can be tailored specifically to individual financial situations.

That’s where we come in. Our job is to help you determine a mix of investment and insurance options for your financial goals, timeline for retirement and tolerance for market risk. Together, we can take this world of information and create a financial strategy designed to help you work toward your financial goals.

Interestingly, one of the hottest areas of research in recent years is behavioral finance. This is basically the study of why we make the investment decisions we do. But regardless of the reasons, this knowledge doesn’t necessarily change our decision-making style. Our decisions are reflections of who each of us is; perhaps they reflect our values, but just as often they may reflect our dispositions (which may not always be a good thing).2 This is another reason having an experienced financial advisor to run ideas by can help ground decision-making and keep us focused on long-term goals.

While biases may be inherent to our nature, it’s still a fascinating field to help us understand everyday behaviors of which we may not be aware. For example, one consultant got a firsthand look at natural human behavior when she underwent two hip surgeries. Over time, she relied on two crutches, one crutch and then a cane. During this time, people were far more willing to help by holding doors and carrying things for her when she was using a crutch as opposed to a cane. It’s worth considering how this bias reflects our feelings toward people with disabilities that appear temporary versus permanent.3

By the same token, we tend to make poor decisions when we’re under stress. One researcher explored this concept within the context of poverty: People living in impoverished conditions with constant financial stress tend to lack the capability, or “mental bandwidth,” to make better choices.4

Perhaps understanding our bias tendencies can help us recognize why other people make what we may judge to be consistently poor decisions.

Content prepared by Kara Stefan Communications

1 Michael Kitces. Nerd’s Eye View. Dec. 21, 2016. “How Behavioral Biases Lead To Hard-To-Capture But Sustainable Alpha.” https://www.kitces.com/blog/sustainable-alpha-from-behavioral-biases-paradox-of-skill-and-factor-investing/. Accessed Jan. 24, 2017.

2 Shana Lebowitz. World Economic Forum. Nov. 25, 2016. “Why is it so hard to overcome bias in decision-making? Because you’re human.” https://www.weforum.org/agenda/2016/11/why-its-so-hard-to-overcome-bias-in-decision-making-according-to-a-psychology-professor. Accessed Jan. 16, 2017.

3 Allison Rimm. Harvard Business Review. Dec. 30, 2016. “What I Learned About Helpfulness When I Used a Cane Instead of Crutches.” https://hbr.org/2016/12/what-i-learned-about-helpfulness-when-i-used-a-cane-instead-of-crutches. Accessed Jan. 16, 2017.

4 Knowledge@Wharton. Dec. 28, 2016. “Why Mental Bandwidth Could Explain the Psychology Behind Poverty.” http://knowledge.wharton.upenn.edu/article/bandwidth-explain-psychology-behind-poverty/. Accessed Jan. 16, 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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