New Laws Passed By Congress

Toward the end of 2018, before the midterms, Congress passed a proliferation of bills, many of which were bipartisan. The following is a roundup of recent legislation designed to provide economic stimulus and additional protections heading into 2019.

The America’s Water Infrastructure Act of 2018 directs the U.S. Army Corps of Engineers to embark on more than 100 water resource projects, ranging from water-pollution control to conservation and development of water resources for rivers and harbors throughout the United States. The bill also enables states to borrow money to develop clean drinking water systems and establishes new federal programs to help communities address water contamination – in hopes of avoiding situations like the one in Flint, Michigan, where improperly treated water leached lead from old pipes into the drinking water.1

The Veterans Treatment Court Improvement Act of 2018 was introduced by Rep. Mike Coffman (R-CO) in April 2017 and enacted in September 2018. The bill requires the Department of Veterans Affairs to hire at least 50 Veterans Justice Outreach (VJO) specialists to help veterans who become involved in the criminal justice system. These licensed social workers will help veterans be referred to veterans treatment courts, which are specialty courts with experience dealing with issues such as PTSD and traumatic brain injury. They are dedicated to helping veteran offenders address underlying issues and get the help they need. A VJO specialist is empowered to customize a rehabilitation program for the unique needs of each veteran defendant and monitor his or her progress through the veteran court system.2 

Until now, many health insurance plans and pharmacy benefit managers, including those offered through Medicare Advantage and Medicare Part D plans, negotiated “gag clause” agreements with the pharmacies in their network. These agreements prevented pharmacists from letting customers know that a drug they purchased at the store would be less expensive if they purchased it out-of-pocket rather than using their insurance. The Patient Right to Know Drug Prices Act, effective immediately, officially prevents this practice among insurance plans offered by employers and purchased on the individual market. The Know the Lowest Price Act of 2018 bans this practice among Medicare Advantage and Part D prescription drug plans effective January 1, 2020. Both bills were signed into law in October 2018.3 Under the new legislation, pharmacists will not be required to tell patients about a lower cost option. If they don’t, it’s up to the customer to ask.4

The Justice Served Act of 2018 amends the DNA Analysis Backlog Elimination Act of 2000 to allocate federal grants to help address the backlog of violent crime cases involving suspects identified through DNA evidence, including cold cases.5

The Orrin G. Hatch-Bob Goodlatte Music Modernization Act of 2018 makes it easier for streaming music providers, such as Spotify, Apple Music and Amazon Music Unlimited, to license music for their subscribers. This bill updates licensing agreements to include digital reproduction and distribution and establishes a nonprofit mechanical licensing collective to administer a blanket statutory licensing system for streaming providers. This entity will be responsible for collecting and distributing royalties for both pre- and post-1972 sound recordings.6

Content prepared by Kara Stefan Communications.                                                                                                     

 

1 John Barrasso and Tom Carper. USA Today. Oct. 23, 2018. “Water Infrastructure Act is a bipartisan win for all Americans, from farms to cities.” https://www.usatoday.com/story/opinion/2018/10/23/americas-water-infrastructure-act-protects-families-bipartisan-flint-flood-column/1669902002/. Accessed Oct. 31, 2018.

2 Austin Igleheart. National Association of Counties. Aug. 28, 2018. “Congress passes bill to expand Veterans Justice Outreach Program and incentivize new veterans treatment courts.” https://www.naco.org/blog/congress-passes-bill-expand-veterans-justice-outreach-program-and-incentivize-new-veterans. Accessed Oct. 31, 2018.

3 Susan Morse. Healthcare Finance. Sept. 27, 2018. “House passes bills prohibiting pharmacy gag clauses on drug prices.” https://www.healthcarefinancenews.com/news/house-passes-bills-prohibiting-pharmacy-gag-clauses-drug-prices. Accessed Oct. 31, 2018.

4 Advisory Board. Oct. 11, 2018. “Trump signs bill to ban ‘gag clauses in Medicare, private health plans.” https://www.advisory.com/daily-briefing/2018/10/11/gag-clauses. Accessed Nov. 16, 2018.

5 Deborah McKeon. Temple Daily Telegram. Oct. 11, 2018. “Justice Served Act to provide funds to prosecute cases.” http://www.tdtnews.com/news/article_4246638a-cd9a-11e8-a3c1-b3ac4a1a5875.html. Accessed Oct. 31, 2018.

6 Bill Rosenblatt. Forbes. Oct. 11, 2018. “Here Are The Loopholes Closed By The Music Modernization Act.” https://www.forbes.com/sites/billrosenblatt/2018/10/11/music-modernization-act-now-law-leaves-one-copyright-loophole-unclosed/. Accessed Oct. 31, 2018.

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.

656437B

Real Estate Update

 

According to the Federal Reserve Bank of St. Louis, up to 10 million Americans lost their homes during the last financial crisis. Now, 10 years later, we’re only slightly above 2016’s low of 63 percent home ownership – at about 64 percent as of June 2018.1

 

While many metropolitan areas have experienced robust growth in jobs and home prices, young adults moving to large cities in search of work often are priced out of the home market, and leaving rural areas with smaller populations and lower home prices.2

 

One study found that 30 percent of Americans live in areas where they need to earn at least $100,000 a year to buy a median-priced home. Recently, Denver, Colorado, and its surrounding counties received the dubious distinction of being named the most unaffordable area in the country for housing. Brooklyn, New York, was recognized for costing the highest percentage of one’s income to become a homeowner – 37 percent of the average homeowner’s income goes toward mortgage payments.3        

 

 

The good news for those looking to downsize in retirement is that there remains a strong market of buyers. Also, if you are looking to move into a smaller, more manageable home for retirement, the ability to pay in cash may provide a distinct advantage over others shopping in this market. Be sure to consult with a professional real estate agent or broker to help decide what’s best for your unique situation.

 

It’s not likely to get any easier to buy a home. As of mid-October, 30-year mortgage rates were floating up toward 5 percent, the highest level in more than seven years. Rising rates could serve to discourage potential homebuyers.4

 

The following are some trends real estate experts anticipate on the horizon:5

 

  • Instead of a large second home, we may see conservative (tiny) second homes with a minimal carbon footprint and a luxury feel
  • The price difference between luxury and starter homes will increase
  • In commercial real estate, fewer parking garages and more drop-off spaces in front of dining and shopping venues, as people take advantage of driving services (Uber and Lyft) or driverless car technology
  • Fewer people will need onsite visits to a vast array of homes before making a decision, thanks to virtual reality technology and virtual staging of homes for sale

 

Inventory is expanding. In September, the number of homes for sale increased 8 percent year-over-year, representing the biggest increase since 2013.6 

 

A new VeroFORECAST for 10 of the most populous metropolitan areas in the United States predicts home appreciation ranging from 9.3 percent to 11.7 percent by September 2019. States boasting some of the top markets include Washington, Idaho, Nevada, California and Colorado.7 Robert Shiller, co-founder of the Case-Shiller Index that tracks home prices around the nation, says he doesn’t foresee a large downturn ahead.8

 

Content prepared by Kara Stefan Communications.                                                                        

 

 

1 Rachel Layne and Irina Ivanova. CBS News Moneywatch. Sept. 15, 2018. “A decade since the housing crash, a new story emerges.” https://www.cbsnews.com/news/a-decade-since-lehman-brothers-collapse-housing-market-crash-a-new-story/. Accessed Oct. 29, 2018.

 

2 Ibid.

 

3 Clare Trapasso. Realtor.com. Oct. 4, 2018. “Here’s How Many Americans Can’t Afford to Buy a Median-Priced Home.” https://www.realtor.com/news/real-estate-news/median-priced-home-unaffordable-most-americans/.

 

Accessed Oct. 29, 2018.

 

4 Laura Kusisto and Christina Rexrode. Realtor.com. Oct 12, 2018. “Mortgage Rates Fast Approaching 5%, a Fresh Blow to Housing Market.” https://www.realtor.com/news/real-estate-news/mortgage-rates-fast-approaching-5-fresh-blow-housing-market/. Accessed Oct. 29, 2018.

 

5 Forbes. Oct. 29, 2018. “12 Industry Experts Share Their Near-Future Real Estate Predictions.” https://www.forbes.com/sites/forbesrealestatecouncil/2018/10/29/12-industry-experts-share-their-near-future-real-estate-predictions/. Accessed Oct. 29, 2018.

 

6  Clare Trapasso. Realtor.com. Oct. 3, 2018. “In a ‘Key Inflection Point,’ Number of New Listings Jumps the Most Since 2013.” https://www.realtor.com/news/real-estate-news/homes-finally-hit-market-means-buyers-sellers/. Accessed Oct. 29, 2018.

 

7 Eric Fox. Housing Wire. Oct. 29, 2018. “This real estate market will see almost 12% in appreciation.” https://www.housingwire.com/blogs/1-rewired/post/47246-this-washington-state-msa-will-see-the-most-real-estate-appreciation. Accessed Oct. 29, 2018.

 

8 Michelle Fox. CNBC. Oct. 26 , 2018. “Nobel Prize winner Robert Shiller: I don’t expect a sharp turn in the housing market.” https://www.cnbc.com/2018/10/26/robert-shiller-i-dont-expect-a-sharp-turn-in-the-housing-market.html. Accessed Oct. 29, 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.

 

648127B

 

Thinking About Downsizing?

When companies face a rough period, they often look to either increase revenues or trim expenses, including reducing overhead costs.

You can do the same thing for your personal budget, where reducing expenses can give you the opportunity to increase your savings rate. Though this sometimes can seem easier said than done.

Costs have a way of appearing fixed. But that may be because you haven’t considered changing your lifestyle. It may be worth considering the way you live and whether you’re making the most of your budget. We are happy to help you conduct an objective assessment of your budget — and your retirement income strategies.

While some expenses may appear fixed, like utility bills, that may be only because of the house you live in. If you moved to a smaller house, with less square footage to heat and cool, your utility bills would likely decrease. There’s a good chance other costs would decrease as well, such as mortgage payments, homeowner’s insurance, property taxes, home maintenance and even lawn care, if your lot is smaller.

The National Council on Aging has an online calculator that can help you assess whether relocating/downsizing, and all of its related costs, could be a good move for you.1

Note, too, that downsizing doesn’t necessarily mean selling your home and moving to a smaller one. You can downsize your lifestyle while staying right where you are. For example, owning a smaller and more gas-efficient car. Getting rid of a hot tub or other luxuries that are not just expensive to maintain but also may increase your home insurance premiums. Anything that breaks often and is expensive to repair may be worth eliminating or replacing.

You can sell things you don’t need or use anymore. You can learn to be content with what you have — cure that need to buy every new cell phone or gadget that hits the market. Share your tools, books, clothes and other household items with neighbors and friends so that you all support each other in this approach to downsizing expenses.

Buying and owning less not only gives you fewer things to insure, repair and maintain, but it also can provide a liberating feeling, free from material possessions. Live in the moment, for yourself and others, your income not beholden to pay for a lot of stuff.2

While you’re practicing a downsized frame of mind, consider other things that you might be better without. For instance, negative or toxic friends who make you feel out-of-sorts or angry after you’ve spent time with them.3

If you are in retirement or developing a retirement income strategy, consider adopting the downsizing mindset when you think about the lifestyle you want to lead — and can afford. If you want to get out and do more — such as theatre, fine dining, vacations — consider trading the family home for a condominium that doesn’t require as much upkeep. If you want to move out of the suburbs and get a place in the city, consider that you may not need a car anymore.4

Another way to approach downsizing is with a Swedish philosophy: “death cleaning” or döstädning.5 Described in a book by Margareta Magnusson, “The Gentle Art of Swedish Death Cleaning,” it essentially means cleaning out your belongings so your kids don’t have to once you pass away. It’s a kindness. First, you can give them some of your things that you don’t use and which they may greatly appreciate. Second, it’s an opportunity to share stories with loved ones about treasured objects, or even your life, as you clean. Finally, what greater gift to leave your grieving family than not making them take on this large task at a difficult time. Magnusson notes that this process can take place at any point in our lives.

 

Content prepared by Kara Stefan Communications.

1 National Council on Aging. Aug. 28, 2018. “Figure Out How Moving Changes Your Finances.” https://calculator.benefitscheckup.org/calculators/move-or-stay-put?_ga. Accessed Sept. 21, 2018.

2 Joshua Becker. Forbes. Aug. 28, 2018. “7 Reasons To Own Less.” https://forbes.com/sites/joshuabecker/2018/08/28/seven-reasons-to-own-less/. Accessed Sept. 21, 2018.

3 Lindsay Dodgson. BusinessInsider.com. Aug. 7, 2018. “13 signs your friendship with someone is toxic.” https://www.businessinsider.com/signs-your-friendship-is-toxic-2018-2. Accessed Sept. 21, 2018.

4 William P. Barrett. Forbes. Feb. 21, 2017. “The Best Places To Retire Without A Car.”

https://www.forbes.com/sites/williampbarrett/2017/02/21/the-best-places-to-retire-without-a-car/.  

Accessed Sept. 21, 2018.

5 Margareta Magnusson. Time. Jan. 3, 2018. “‘Death Cleaning’ Is the New Marie Kondo. Should You Try It?” http://time.com/5063275/death-cleaning/. Accessed Sept. 21, 2018.

Financial calculators are designed as informational tools to help you estimate answers to common financial questions. They are not intended to predict future results. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation.

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.

638442B

Millennial Generation Impacts

It’s a tough time to be a young adult. Take the housing market, for example. It’s been fairly locked up since the last recession, when many millennials were still in high school. Now that they have jobs and credit history, it turns out millennials struggle to find a house to buy. In many areas, they need cash for a big down payment as well as money for a contractor to renovate a home that hasn’t been touched since the 1970s.

Because so many graduated in an era when jobs were scarce, followed by an era during which wages have stagnated, young adults are not earning as much income relative to previous generations. According to one study, in 1970, 92 percent of 30-year-olds earned more than their parents did at that age, but in 2014, only 50 percent of 30-year-olds could make that claim.1

Impact? “Being a 25- to 34-year old is harder than it’s been in generations.”2

This can put some retirees and late-stage workers in a quandary. Many parents want to help their adult children financially. Some are tempted to use retirement savings to help pay off student loans or contribute to a down payment on a home. Depending on your situation, that might not be the best decision. If you’d like to help your children or grandchildren, we can help you look at your current budget and determine potential strategies.

Due to the high cost of college tuition and the number of students graduating with student loans, millennials now carry an average debt of $42,000. Clearly, this is going to stymie their ability to build wealth and savings. But there are other long-term impacts as well:3

  • Financial stress affects physical and mental health, not to mention focus and productivity on the job
  • Millennials are more interested (95%) in accepting a job from an employer that offers student loan repayment, so certain industries benefit more from college recruits
  • They are reluctant to commit to long-term relationships while saddled with huge amounts of debt, which may reduce birth rates (and the ability to fund future Social Security and Medicare benefits)
  • Among the demographic group just behind millennials – in response to seeing these problems they too will likely encounter – more than half of Generation Z-ers say they want college to teach them more practical life skills, such as financial planning and saving for the future

The number one goal for 94 percent of millennials is paying off debt or becoming debt free.

Impact? Future GDP may suffer if millennials become misers.

Troubled over their debt and financial situation, many young adults are delaying marriage until they are on stronger financial footing. While this may curb births in the United States, there may be a silver lining: the divorce rate dropped 18 percent from 2008 to 2016.4 While baby boomers continue to divorce at unusually high rates, experts say that young adults who marry today have a greater chance of a lasting relationship than marriages even 10 years ago. Another finding is that among those with less money and less education, fewer are getting married but are raising kids and living together.5

Impact? “Marriage is becoming a more durable, but far more exclusive, institution.”6

So somewhere down the road, consider what might be attractive to a debt-free, independent-minded single millennial. Well, 42 percent say they’d like to take extended time away from work. Right now, only 5 percent of employers offer paid sabbaticals (Facebook offers 30 days of paid time off every five years), but this could change as more young people enter the workforce.7

As more young adults become engaged in voting and influencing government policies, U.S. paid time off may start to resemble that of Europe and Australia, where workers get a mandatory minimum of 20 days paid vacation after their first year on the job.8

Impact? U.S. paid time off policies may start to shift.

 

Content prepared by Kara Stefan Communications.

1 Joshua M. Brown. The Reformed Broker. July 25, 2018. “How do you start a life these days?” https://thereformedbroker.com/2018/07/25/how-do-you-start-a-life-these-days/. Accessed Oct. 18, 2018.

2 Ibid.

3 Ryan Jenkins. Inc. Sept. 25, 2018. “This Is the Type of Debt Millennials Have.” https://www.inc.com/ryan-jenkins/this-is-millennials-number-1-life-goal.html. Accessed Oct. 18, 2018.

4 Ben Steverman. Bloomberg. Sept. 25, 2018. “Millennials Are Causing the U.S. Divorce Rate to Plummet.” https://www.bloomberg.com/news/articles/2018-09-25/millennials-are-causing-the-u-s-divorce-rate-to-plummet.

Accessed Oct. 18, 2018.

5 Ibid.

6 Ibid.

7 Kathryn Mayer. Employer Benefit News. Oct. 16, 2018. “The 15 most popular employee perks.” https://www.benefitnews.com/list/the-15-most-popular-employee-benefits. Accessed Oct. 18, 2018.

8  Niall McCarthy. Forbes. June 26, 2017. “American Workers Get The Short End On Vacation Days.” https://www.forbes.com/sites/niallmccarthy/2017/06/26/american-workers-have-a-miserable-vacation-allowance-infographic/. Accessed Oct. 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.

637011B

Money Matters

To help combat chronic poverty, some think tanks and economists have pitched the idea of a universal basic income (UBI), issued by the government. In the words of the 1980s band Dire Straits, UBI is essentially “money for nothing.”

Proponents suggest that if every American adult received $1,000 a month to do with whatever they please, many societal problems could be solved. People would be able to pay basic bills and put food on the table. Children could go to school well-nourished, perform better and subsequently be better able to contribute to society as adults. Crime could potentially be curbed, as might poverty-related issues affecting physical and mental health.1

What would you do with an extra $1,000 a month? Put it toward your retirement savings? Pay down student loans? Quit your job and start your own business, knowing you have safety-net income? It would certainly come in handy during retirement. If you’re starting to ponder the power of an extra $1,000 a month in your life, it may be possible to uncover this amount amidst your own finances. Call us if you’d like some help brainstorming ideas for reducing monthly expenses or creating a household budget.

The idea of universal income isn’t new. In 1971, under President Richard Nixon, a bill to create just that was passed in the U.S. House of Representatives. The proposal died after stalling in the Senate over disagreement about the income amount.2

One philanthropic organization, GiveDirectly, experimented with handing out monthly income to residents of villages in Kenya. Researchers found that the influx of cash didn’t induce people to stop working or fuel bad habits like drinking or smoking. Rather, it was used to purchase things that households needed but couldn’t otherwise afford. The study revealed that cash payouts were more useful to recipients than charitable donations of goods and services, with the added advantage of being less expensive and easier to disperse.3

Cashless Life

In Sweden, there’s another type of monetary trend on the rise: stores are increasingly posting signs saying they don’t accept cash. Economists there project the country will become the world’s first cashless society by 2023. Interestingly, this initiative was spurred by robberies that led the unions of bank employees, bus drivers, cab drivers and others to push for cash-free payments to protect their members.4

Of course, a strictly credit-based society has its own issues. If someone steals your identity, your funds can be drained and credit score hijacked. This reality led to recent legislation in the United States that now requires the three credit reporting agencies — Equifax, Experian and TransUnion — to allow people to freeze their credit for free. Before this bill, it used to cost as much as $10 to freeze your file at each credit bureau and another $10 to unfreeze it.5

 

Content prepared by Kara Stefan Communications.

1 Andrew Yang. New York Daily News. Sept. 2, 2018. “Money for nothing: The case for universal basic income.” http://www.nydailynews.com/opinion/ny-oped-money-for-nothing-universal-basic-income-20180830-story.html. Accessed Oct. 8, 2018.

2 Ibid.

3 Bryce Covert. The Nation. Aug. 15, 2018. “What Money Can Buy.” https://www.thenation.com/article/the-promise-of-a-universal-basic-income-and-its-limitations/. Accessed Oct. 8, 2018.

4 Knowledge@Wharton. Aug. 31, 2018. “Going Cashless: What Can We Learn from Sweden’s Experience?” http://knowledge.wharton.upenn.edu/article/going-cashless-can-learn-swedens-experience/. Accessed Oct. 8, 2018.

5 Herb Weisbaum. NBC News. Sept. 21, 2018. “Worried about data breaches? Now you can freeze your credit for free.” https://www.nbcnews.com/better/business/worried-about-data-breaches-now-you-can-freeze-your-credit-ncna911101?cid=sm_npd_nn_tw_ma. Accessed Oct. 8, 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.

628290B

What’s Real News?

“And that’s the way it is.”

This is how Walter Cronkite signed off at the completion of his CBS Evening Newscast, which he anchored from 1962 until 1981. Widely recognized as a trusted source to deliver the news, Cronkite was known for his honesty and impartiality.1

These days, it’s hard to find impartiality. Many cable news channels tend to tilt either liberal or conservative, and it can be difficult to differentiate between which shows report the news and which shows merely discuss the day’s news from different viewpoints.

This is one of the reasons why it can be difficult to make financial or economic decisions based on what we hear on “the news.” To get a more complete perspective, it’s a good idea to read newspapers as well as articles on the internet and discuss how the news impacts your particular situation with an experienced professional. If you’d like some assistance in assessing your retirement income strategy, we’re here to help.

However, it’s also helpful to keep a few guidelines in mind when it comes to evaluating what is real news and what may be a skewed opinion. Earlier this year, Pew Research Center conducted an experiment in which researchers presented five statements of fact and five stated opinions to more than 5,000 adults. As it turns out, only 26 percent of respondents were able to correctly identify which of the statements constituted actual facts. In contrast, 35 percent of participants misidentified the five opinions as facts.2

In addition to televised newscasts, the internet constantly generates a wide array of “news stories” — some based on fact and some completely made up for the purpose of getting readers to click on their links. In some cases, headlines may be provocative and misleading — but the underlying articles are factually based. Note that headlines are generally created by an editor, not the writer of the article, with the singular intent of provoking a reader to click on the full article — thus exposing him or her to more advertisers.

We are currently at a crossroads in which the internet is unregulated, which means that there is no central, standardized regulating body that controls the flow of information across online media and social media outlets. Some websites provide content by legitimate journalists, while others post “user-generated” content, where anyone with an opinion can publish an article. Journalistic standards, such as those taught in journalism school, are not generally observed or heeded across all media outlets.

In response to our new culture of “fake news,” “alternative facts” and willful disinformation, social media websites such as Facebook and Twitter have launched efforts to fact-check information shares on their platforms. Facebook recently announced that it now has 27 fact-checking partners across the world that use various tools to analyze pictures and videos to help identify and remove false content. Both Facebook and Twitter also rely on users to report shared content that is false or abusive.3

These efforts come in the wake of the vast spread of disinformation across websites. A recent study revealed that Facebook users were exposed to “fake news” articles generated from 570 sites up until and just shortly after the 2016 U.S. presidential election.4

Also, be aware that quiz answers, videos, shared posts, “likes” and comments are used to help develop data profiles about each user, which are in turn sold to advertisers for better targeted marketing messages.5 It’s important for users to become better educated about how their information is compiled and used to help mitigate the spread of false information.6

Content prepared by Kara Stefan Communications.

1 Biography.com. “Walter Cronkite Biography.” https://www.biography.com/people/walter-cronkite-9262057. Accessed Sept. 16, 2018.

2 David Bauder. Associated Press. Aug. 16, 2018. “As our media environment blurs, confusion often reigns.” https://apnews.com/127fe8b09ae74a57826ab5953922e711. Accessed Sept. 14, 2018.

3 Edward Alvarez. Engadget. Sept. 13, 2018. “Facebook is fact-checking photos and videos to fight fake news.” https://www.engadget.com/2018/09/13/facebook-fake-news-pictures-videos-fact-checking/. Accessed Sept. 16, 2018.

4 Will Oremus. Slate.com. Sept. 14, 2018. “Facebook’s Crackdown on Misinformation Might Actually Be Working.” https://slate.com/technology/2018/09/facebook-fake-news-getting-better-study.html. Accessed Sept. 16, 2018.

5 Knowledge@Wharton. Sept. 6, 2018. “Advertising in Crisis: How the Turmoil Threatens All Media.” http://knowledge.wharton.upenn.edu/article/auletta-frenemies/. Accessed Sept. 16, 2018.

6 Lion Gu, Vladimir Kropotov, Fyodor Yarochkin, Jonathan Leopando and John Estialbo. Trend Micro. June 13, 2017. “Fake News and Cyber Propaganda: The Use and Abuse of Social Media.” https://www.trendmicro.com/vinfo/us/security/news/cybercrime-and-digital-threats/fake-news-cyber-propaganda-the-abuse-of-social-media. Accessed Sept. 16, 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.

613331B

Insights Into Medigap

Many Americans who enroll in original Medicare also purchase a supplemental insurance policy, colloquially known as “Medigap.” Medigap covers some or all of the out-of-pocket costs associated with original Medicare — deductibles, copayments and coinsurance — helping to reduce financial risk. However, there is a wide array of Medigap plans with a variety of different benefits. To help simplify it for consumers, Medigap plans are labeled by letter (A, B, C, D, F, G, K, L, M and N).1

An important fact regarding Medigap to keep in mind is that an enrollee is guaranteed to qualify for coverage only during the first six months after initially enrolling in Medicare. After that, insurers are permitted to conduct medical underwriting, which means they can charge higher premiums based on your health history and any pre-existing medical conditions. However, once you purchase a Medigap policy, federal law guarantees renewability as long as you consistently pay your premiums.2

Currently, only Connecticut, Massachusetts, Maine and New York have laws that require insurers to issue Medigap policies regardless of health status.3

The Initial Enrollment Period, or IEP, for Medicare lasts seven months, beginning three months before you turn 65 years old, including the month you turn 65 and the following three months. If you have already started drawing Social Security benefits by then, you may be automatically enrolled in Original Medicare (Part A and Part B).4 Things can get complicated if you continue working past age 65 and have employer-sponsored health care coverage. If you need help deciphering all of the fine print and regulations, we may be able to suggest resources to help.

Each year, about 10 million people buy Medigap policies to accompany their Medicare plans. While exact benefits vary by policy, Medigap usually covers all or most expenses that are covered by Medicare but not paid in full by Parts A and B (Part B pays only 80 percent of covered expenses).5 The cost for Medigap policies varies based on a number of factors.

The most comprehensive Medigap policies are Plans C and F, which offer 100 percent coverage of Part A coinsurance charges and hospital costs up to a year after Medicare benefits are exhausted. They also pay 100 percent of Part B coinsurance or copayment amounts, hospice care coinsurance, skilled nursing facility coinsurance, and deductibles for Part A and B. Be aware that, starting in 2020, Medigap C and F plans will be phased out for new buyers; current policyholders will be able to retain their plans, but premiums could increase. At that time, Medigap D and G plans will offer the most comprehensive coverage.6

Here’s something to remember: If you’ve been paying for a Medicare Advantage plan and then decide to switch to original Medicare during open enrollment season, you may be declined Medigap coverage due to your medical history. Therefore, the older you get, the more important it is to consider sticking with one plan (Medicare Advantage) or the other (Medicare plus Medigap).

In 2017, 65-year-old policyholders bought more than a third of all new Medigap policies. Among them, Plan F was the most popular, representing slightly more than 46 percent of the total sales premium.7

 

Content prepared by Kara Stefan Communications.

1 Darla Mercado. CNBC. July 31, 2018. “Why you may not be able to count on this additional Medicare coverage.” https://www.cnbc.com/2018/07/31/why-you-may-not-be-able-to-count-on-this-additional-medicare-coverage.html. Accessed Sept. 4, 2018.

2 Ibid.

3 Judith Graham. Kaiser Health News. July 26, 2018. “No Gaps In Understanding: Here’s Your Primer On Medigap Coverage.” https://khn.org/news/no-gaps-in-understanding-heres-your-primer-on-medigap-coverage/. Accessed Sep. 4, 2018.

4 Justin Adsit. Forbes. Aug. 15, 2018. “Medicare Enrollment Periods And Deadlines: When Should You Sign Up?” https://www.forbes.com/sites/forbesfinancecouncil/2018/08/15/medicare-enrollment-periods-and-deadlines-when-should-you-sign-up/#767e5787541d. Accessed Sept. 4, 2018.

5 Philip Moeller. PBS Newshour. July 18, 2018. “How do Medigap plans work? Here’s a tutorial.” https://www.pbs.org/newshour/economy/making-sense/how-do-medigap-plans-work-heres-a-tutorial. Accessed Sept. 4, 2018.

6 Mark Miller. Reuters. July 19, 2018. “U.S. Medigap plans fall short on protections for pre-existing conditions.” https://www.reuters.com/article/us-column-miller-medigap/u-s-medigap-plans-fall-short-on-protections-for-pre-existing-conditions-idUSKBN1K91IK. Accessed Sept. 4, 2018.

7 Genre.com. August 2018. “Medicare Supplement – Highlights of 2017 U.S. Market Survey.” http://www.genre.com/knowledge/publications/surveylhmedsuppsummary18-en.html. Accessed Sept. 4, 2018.

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.

600764B

Odds for Divorce

Every couple who decides to marry runs some risk of divorce in the future. The only way to definitively avoid divorce is to remain single, but plenty of people are willing to take their chances.

Among the many unintended consequences of divorce is the toll it can take on a couple’s finances. Of divorced women, 46 percent reported in an online survey that divorce brought with it financial surprises. Those included having no idea how much the household carried in debt, such as mortgages, auto loans, 401(k) loans, student loans and credit cards. Many assumed their child support and/or alimony would be more substantial or last longer; that they would be able to keep the family home; or that they wouldn’t have to return to the workforce.

As for the cost of actually filing for divorce, here are some averages from a nationwide survey by legal site Nolo.com:2

  • $250 per hour for a divorce attorney
  • $6,000 to $7,000 for divorce mediation
  • $175 to $700 for legal document preparation (for an uncontested divorce)
  • $200 to $500 for online divorce services (paperwork assistance without court filing)
  • $12,800 average spent on divorce per couple

While it’s always advisable to have legal assistance during a divorce, that’s not the only advice you should seek. Both spouses should work with a financial professional to understand the combined household assets. It’s important to consider things like withdrawal accessibility, tax liabilities and early withdrawal penalties. Also, it’s best to view finances from a “big picture” point of view instead of a single asset at a time, including insurance resources.3 Let us know if we can help you with any questions you might have about your insurance policies.

Of course, the best way to avoid the expense and hassle of divorce is not to get one. Recent studies have revealed some interesting statistics related to marriages that end in divorce, which couples may wish to consider when planning their nuptials.

For example, statistician Nathan Yau tracked divorce rates by profession, using U.S. Census data, and found that people in certain professions have a greater likelihood of divorcing, while others are less likely to end up there. Actuaries are the least likely to get a divorce — presumably because of their experience predicting risk and managing uncertainty — according to Yau’s analysis. Other professions with lower divorce rates include scientists, clergy, software developers and physical therapists. Professions with the highest divorce rates include casino managers, bartenders and flight attendants.4

Another study found that couples can reduce their chances of divorce in the wedding planning phase. For instance, a marriage has the best chance of lasting when the couple:5

  • Spends less money on the engagement ring (less than $2,000)
  • Spends less money on the wedding – weddings costing less than $1,000 have a better chance than those costing more than $20,000
  • Goes on a honeymoon
  • Does not let their partner’s physical appearance factor into their decision to marry

 

 

 

Interestingly, more divorces are filed in March and August than any other months. Some theorize that couples don’t want to spoil the holiday season or summer vacation by announcing their intentions. Besides, some couples believe that spending more family time together during those holidays may help save the marriage.6

 

Content prepared by Kara Stefan Communications.

1 Laurie Itkin. Forbes. July 15, 2018. “The 6 Nasty Financial Surprises For Divorcing Women.” https://www.forbes.com/sites/nextavenue/2018/07/15/the-6-nasty-financial-surprises-for-divorcing-women/#12e3a69524b9. Accessed Aug. 31, 2018.

2 Heather Skyler. Supermoney.com. July 10, 2018. “The Average Cost of Divorce and 5 Major Financial Mistakes to Avoid.” https://www.supermoney.com/2018/01/average-cost-divorce-5-major-financial-mistakes-avoid/. Accessed Aug. 31, 2018.

3 Ibid.

4 Leah Fessler. Quartz. Aug. 23, 2017. “The occupations with the highest and lowest divorce rates in the US.” https://qz.com/1069806/the-highest-and-lowest-divorce-rates-in-america-by-occupation-and-industry/. Accessed Aug. 31, 2018.

5 Chelsea Ritschel. Independent. July 6, 2018. “Couples Who Spend More on Their Weddings Are More Likely To Divorce, Study Finds.” https://www.independent.co.uk/life-style/love-sex/wedding-cost-marriage-divorce-ring-how-much-price-study-a8435646.html. Accessed Aug. 31, 2018.

6 Diana Bruk. Observer. June 7, 2017. “New Study Shows Most Divorces Happen in These Two Months.” http://observer.com/2017/06/university-of-washington-study-shows-most-divorces-happen-in-march-august/. Accessed Aug. 31, 2018.

We are not permitted to offer legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation.

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.

595685B

Succeeding as an Entrepreneur

There’s an age-old insight that’s often cited when referencing entrepreneurship: “90 percent of startups fail.” In fact, that may not be the case. According to new research by Cambridge Associates — assessing more than 27,000 venture-backed startups — the average failure rate was 60 percent.1

It could be that new technologies and the ability to reach a target niche of online customers have allowed businesses more options and opportunities for success. However, it still takes a certain spark to become a successful business owner.

We often recommend that clients work longer before considering retirement, if possible. This not only helps accrue a larger nest egg but also helps avoid boredom that could set in with a longer retirement. For this reason, many people consider working in an entirely different area than their regular career — including starting their own business.

Winning Traits

According to Eva Chan and Jane Lee, who founded Launch Pop and are focused on helping jumpstart other entrepreneurs, there are a few basic categories of new business owners, each offering certain personality traits beneficial to startup success. Examples include:2

  • The Detail Master: The consummate detail-oriented person — good at addressing each small detail but at risk of getting bogged down and moving too slowly.
  • The Hulk: A real go-getter — he or she may have the passion and drive to get a business up and running but could find managing people and details a bit challenging.
  • The Pivot Master: Adept at recognizing and acting on timely opportunities but may not spend enough time planning and testing the business idea.

Ultimately, the people who seem to have the greatest long-term entrepreneurial success tend to have a mix of these characteristics.

Winning Skills

In addition to the right combination of personality traits, successful entrepreneurs wear many hats and use many skillsets to get a business off the ground. The most important skills include:3

Sales: The ability to find target customers and keep them coming back. According to serial entrepreneur Mark Cuban: “Sales cures all. There’s never been a company that succeeded without sales.”4

Planning: Entrepreneurs need to be realistic about what they can take on and accomplish with a new business; this requires establishing a budget and timeline for reaching specific goals.

Communication: Business owners must speak the required language to a variety of audiences, from vendors and customers to bankers and investors.

Customer Focus: Whether their experiences are positive or unpleasant, a business owner must be focused on customer wants, needs and what will keep them coming back.

Curiosity: They must be curious about what their competitors are doing, what technology and processes could help streamline their entity, and they must use their imagination to help differentiate their business.

Entrepreneurs who are concerned that personality and skills aren’t enough to get their business up and running can consider taking an online class on startups from the likes of Facebook’s Mark Zuckerberg or Dropbox co-founder and CEO Drew Houston. These two are among the instructors of Y Combinator’s Startup School in Silicon Valley, which offers a 10-week online course for high-growth startup founders.5

Winning Tactics

Entrepreneurs ready to unveil that new venture can keep in mind the following marketing tactics:6

  • Color improves brand recognition by up to 80 percent.
  • Email marketing has a 122 percent median return on investment — four times higher than social media, direct mail or paid search.
  • Content marketing yields three times more leads than paid searches.
  • By 2021, mobile e-commerce will account for 54 percent of all online sales.

Interested in starting your own business but don’t have a novel idea to start one? Take a critical look at the businesses around you. From a customer perspective, what are they doing wrong? How could you do it better? One young entrepreneur started her own fitness center after hating a yoga class. She combined the types of exercise she did like into a new fitness boutique — and found an audience who agreed.7

Combining these talents, skills and tactics could lead to a winning formula for those entrepreneurs willing to put in the work to succeed — and may spark some ideas if you’re looking for a new venture in retirement.

 

Content prepared by Kara Stefan Communications.

1 Ashley Crouch. Forbes. July 12, 2018. “How To Leverage Your Personality For Success, According To The Creators Of Launch Pop.” https://www.forbes.com/sites/ashleycrouch/2018/07/12/how-to-leverage-your-personality-for-success-according-to-launch-pop/#49c7608a708f. Accessed Aug. 23, 2018.

2 Ibid.

3 Murray Newlands. Regions Bank. “5 Most Important Business Skills Every Entrepreneur Must Have.” https://www.regions.com/Insights/Small-Business/Operations/5-Most-Important-Skills-Every-Entreprenuer-Must-Have. Accessed Aug. 23, 2018.

4 Minda Zetlin. Inc. Aug. 23, 2017. “Mark Cuban Says This Is the 1 Mistake New Entrepreneurs Always Make.” https://www.inc.com/minda-zetlin/mark-cuban-sanyin-siang-entrepreneurship-mistakes-funding-vcs-sales.html?cid=sf01001. Accessed Aug. 23, 2018.

5 Sean Wise. Inc. Aug. 23, 2018. “5 Online Courses Every Entrepreneur Should Take (and How to Get the Most Out of Them).” https://www.inc.com/sean-wise/5-online-courses-every-entrepreneur-should-take-and-how-to-get-most-out-of-them.html?cid=sf01001. Accessed Aug. 23, 2018.

6 Gabriel Shaoolian. Forbes. Aug. 10, 2018. “10 Marketing, Web Design & Branding Statistics To Help You Prioritize Business Growth Initiatives.” https://www.forbes.com/sites/gabrielshaoolian/2018/08/10/10-marketing-web-design-branding-statistics-to-help-you-prioritize-business-growth-initiatives/amp/. Accessed Aug. 23, 2018.

7 Jeff Bercovici. Inc. September 2018. “This Entrepreneur Built One of America’s Fastest-Growing Fitness Companies for People Who Hate Yoga.” https://www.inc.com/magazine/201809/jeff-bercovici/2018-inc-5000-y7-studio-yoga-fitness-trends.html?cid=sf01001. Accessed Aug. 23, 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.

591833B

Travel Ideas: Travelers Benefit from Industry Trends

Many areas of the U.S. experienced sweltering heat throughout this past summer. As the seasons change, now is a great time to take a vacation and enjoy the cooler air.

Plan to get away

If you’re looking to avoid the crowds, consider locations not necessarily off the beaten path but adjacent to popular hotspots. For example, if you’re hankering for a colorful autumn trip to New England to catch the leaf show, consider places like Washington, Connecticut, or Bernardsville in Northern New Jersey.1

Book the details

When booking flights and accommodations, online travel agencies, such as Travelocity or Kayak, can be a good way to compare rates. However, once you decide on a venue it may be a better idea to book directly with the airline or hotel. This makes you an official customer of the company (instead of the online agency), which can help garner a bit more responsiveness and personal attention, especially if something goes wrong. Also, industry-rate parity rules require online agencies publish a rate also available at the airline or hotel.2

Budget for travel

Whether you’re still working or already retired, getting away for brief or extended trip is an effective way to break up daily living and get a fresh perspective on life, so it’s important to include a travel line item in your annual budget. You can put a little aside each month, earmark annual windfalls such as tax refunds or use retirement plan required minimum distributions (RMDs) to indulge in the occasional break away from home. If we can help you create a budget that includes regular travel ventures, please give us a call.

Find home away from home

The upscale hotel industry has experienced a fair amount of disruption in recent years, to the benefit of travelers. For example, Airbnb, which started out as a cheap alternative to your average motel, has evolved from air mattress accommodations to competition at the luxury level. The upscale market comprises well-known hoteliers such as Hyatt and the Four Seasons, small boutique hotels and, now, Airbnb Plus — a new high-end service that vets homes and hosts to ensure a high-quality experience.3

Perhaps due to the influence of the shared economy, even upscale travelers appear to be seeking the comforts and local experiences traditionally associated with renting a home. High-end hotels are making similar accommodations by integrating their restaurants into the lobby space to create a more social atmosphere and stocking rooms with regional amenities, such as locally sourced soap.4

Go green on the road

In keeping with the trends toward green innovation and environmental sustainability, some high-end hotels have begun to pare down standard luxury amenities. While rooms may still be big and the service exquisite, sustainable details may include organic, minimalist aesthetics, and low-waste and energy-efficient utilities such as filtered tap water.5

Savor the relaxation

The satisfying glow of staying at a high-end yet environmentally conscious hotel may continue if you incorporate outdoor activities as part of your vacation itinerary. Research shows that spending time in nature has been linked to a reduction in stress, anxiety and depression.6 After all, if your travel plans are designed to provide rest and relaxation, a bit of nature alongside your luxury accommodations could be a prime combination ticket.

 

Content prepared by Kara Stefan Communications.

1 Forbes. Aug. 17, 2018. “19 Perfect Destinations To Welcome Fall.” https://www.forbes.com/sites/forbestravelguide/2018/08/17/19-perfect-destinations-to-welcome-fall/#2b62697158eb. Accessed Aug. 17, 2018.

2 David Lund. Hospitality.net. Aug. 15, 2018. “Hospitality Financial leadership – Why Your average Joe Should never Use an OTA – and…Why He Will Never Stop Using Them!” https://www.hospitalitynet.org/opinion/4089603.html. Accessed Aug. 16, 2018.

3 Aislyn Greene. AFAR. Feb. 22, 2018. “Everything You Need to Know About Airbnb’s New High-End Services.” https://www.afar.com/magazine/everything-you-need-to-know-about-airbnbs-new-high-end-services. Accessed Aug. 16, 2018.

4 Joe Pinsker. The Atlantic. Sept. 21, 2017. “How the Hotel Industry Views Its Future (and Airbnb).” https://www.theatlantic.com/business/archive/2017/09/hotels-magazine-industry-airbnb/540525/. Accessed Aug. 16, 2018.

5 Nicole Martinez. Urban Land Magazine. July 2, 2018. “How Two New Florida Hotel Concepts Are Competing with Airbnb, Marriott.” https://urbanland.uli.org/development-business/two-new-florida-hotel-concepts-competing-airbnb-marriott/. Accessed Aug. 16, 2018.

6 Harvard Medical School. July 1, 2018. “Sour mood getting you down? Get back to nature.” https://www.health.harvard.edu/mind-and-mood/sour-mood-getting-you-down-get-back-to-nature. Accessed Aug. 16, 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.

583490B