Protect Yourself from Scams, Hacks and Breaches

According to a telecommunications study of 50 billion telephone calls over an 18-month period, nearly four percent of calls in 2017 were fraudulent. In 2018, that number jumped to 29 percent of all calls. At that pace, the number of fraudulent calls is expected to rise to 44 percent of all calls in 2019.1

You may have noticed one of the latest techniques in spam telephone calls, termed “neighborhood spoofing.”2 This is when your Caller ID shows that the number is from within your area code. You may assume it’s a legitimate call from someone who is not in your contact list, such as your child’s teacher, a neighbor or a colleague. Instead, it turns out to be a telemarketer or scammer who could be located anywhere in the United States, or anywhere in the world.

A good rule of thumb is never give out any personal information over the phone. Don’t even verify your name or address. Tell the caller you will look up the number of the company or agency they’re calling from and give them a call back. Don’t rely on a number that they give you.

Now, more than ever, it’s important to protect yourself from scams. If anyone calls you regarding your insurance needs or policies, we urge you to contact us directly. Any changes to your insurance should be made within the context of your total financial picture, and we can help you with that. Please don’t hesitate to call us.

Just in time for health insurance enrollment season, some Blue Cross and Blue Shield state licensees are warning their customers about a nationwide robocall scam. Apparently, bad actors are making calls claiming to be Blue Cross and Blue Shield representatives marketing insurance products.3 Remember that when you purchase something over the phone, you need to be the one who initiates the call.

Online platforms also are vulnerable to scams. In September 2018, hackers broke into popular social media network Facebook and accessed the records of more than 50 million users. Information that was stolen included private messages, posts, likes, videos and photos. The hackers got in using the website’s “View as” feature, which had a bug allowing hackers to log in as the account holder. They could even use the same credentials to log in to those users’ Instagram and WhatsApp accounts.4

Remember chain letters that used to come in the mail? They claimed that if you sent a dollar to 10 people by mail that you’d get loads delivered back to you. Well, that technique has gotten a new facelift on social media platforms like Facebook. They begin by posting a request to buy a gift of $10 or more and to add your name to a list. Eventually, you’re supposed to receive 36 gifts. However, this is just another pyramid scheme that’s popular around the holidays. Not only are such posts illegal, by sharing your name on such lists that are forwarded to strangers, you may open yourself to the potential of identity theft.5

Then there’s the “grandparent scam,” in which criminals call and pose as a grandchild or other family member in distress, asking you to wire them money. They position it as an emergency, so you may be tempted to send the money immediately before realizing it’s a scam. The fraudster might even beg you not to tell anyone about it because he’s so ashamed. If you get such a call, experts advise not to send money. Ask the caller questions that a stranger couldn’t possibly answer, and if you’re concerned it might be a legitimate phone call, verify the situation in question by hanging up and calling or texting the family member in question directly or another family member.6

Another common scam that makes the rounds during winter is a phone call from someone posing as a representative of the electric, gas or water company, claiming you didn’t pay your utility bill. They threaten that if you don’t give them information to pay it over the phone, your service will be cut off by the end of the day. Here, too, experts say never to give personal or financial information over the phone; hang up and call the utility company directly if you are concerned.7

During the holiday season and into the New Year, please be extra wary of scammers looking to take advantage of your goodwill. You can report possible fraud to the Federal Trade Commission, at www.ftc.gov, or by calling 1-877-FTC-HELP.8

 

Content prepared by Kara Stefan Communications.                                                                                                          

 

1 AfterFiftyLiving.com. 2018. “9 Things You Can Do to Avoid Telemarketing Fraud.” https://www.afterfiftyliving.com/9-things-you-can-do-to-avoid-telemarketing-fraud/. Accessed Nov. 12, 2018.

2 Ibid.

3 Jeff Wyatt. ABC 33/40. Nov. 12, 2018. “Blue Cross and Blue Shield of Alabama warns of robocall scam.” https://abc3340.com/news/local/blue-cross-blue-shield-of-alabama-warns-of-robocall-scam. Accessed Nov. 12, 2018.

4 Lavanya Rathnam. TechGenix. Oct. 16, 2018. “Facebook Data Breach: Why It Happened and What It Means for the Future.” http://techgenix.com/facebook-data-breach/. Accessed Nov. 12, 2018.

5 Keith Darnay. Bismarck News. Nov. 12, 2018. “Scam alert: ‘Secret Sister’ pyramid scheme hits Facebook.” https://www.myndnow.com/news/bismarck-news/scam-alert-secret-sister-pyramid-scheme-hits-facebook/1590851690. Accessed Nov. 12, 2018.

6 Danni Dikes. WSAV3. Nov. 9, 2018. “Grandparent Scam: Criminals pose as relatives to steal your money.” https://www.wsav.com/news/local-news/grandparent-scam-criminals-pose-as-relatives-to-steal-your-money/1591369233. Accessed Nov. 12, 2018.

7 Michael Knight. KPQ News Radio. Nov. 12, 2018. “PUD Scam Alert.” http://www.kpq.com/pud-scam-alert/. Accessed Nov. 12, 2018.

8 Danni Dikes. WSAV3. Nov. 9, 2018. “Grandparent Scam: Criminals pose as relatives to steal your money.” https://www.wsav.com/news/local-news/grandparent-scam-criminals-pose-as-relatives-to-steal-your-money/1591369233. Accessed Nov. 12, 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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Social Security Updates

 

Good news for retirees: Social Security benefits are scheduled to increase 2.8 percent in 2019, the biggest bump since the 3.6 percent increase in 2012.The average beneficiary – who received about $1,405 a month in 2018 – can expect to see just over $39 more each month, or about $468 more over the course of the year.1

 

Such cost of living increases are meant to cover household expenses that rise due to inflation. However, if you can absorb those additional costs, you could think about redirecting that additional payout toward helping to meet your long-term financial goals. For example, an emergency savings account or a life insurance policy designed to pay for funeral expenses. If you would like help with this, please give us a call.

 

There are a few more updates to Social Security for 2019. For one, the supplemental benefit paid to those who are blind or disabled will increase to $771 from $750 per individual; to $1,157 from $1,125 for couples. Second, if you’re currently working while receiving benefits, you can earn a bit more before those benefits are reduced. Moving forward, you may now earn up to $17,640 before $1 is deducted for every $2 you earn. In the year before you turn your full retirement age, you may earn up to $46,920 before $1 is deducted for every $3 you earn until the month you reach your full retirement age. And third, for those who are still working and have not yet started receiving benefits, the maximum amount of earnings subject to the Social Security tax will increase to $132,900 from $128,400.2

 

Some advocate eliminating the earnings cap to keep Social Security solvent in the future. That’s because the brunt of taxes dedicated to Social Security comes from lower-income earners, while high earners avoid this tax on earnings above $132,900. In fact, due to the increase in income disparity in the United States, a much higher level of earned income is now exempted from this payroll tax compared to the 1980s – $300 billion in 1983 versus $1.2 trillion in 2016.3

 

Other changes in addition to eliminating the taxable income cap have also been proposed. One option, which could benefit both the Social Security fund as a whole and individual retirees, is encouraging retirees to delay claiming Social Security benefits. For every year delayed, one’s benefits increase 8 percent. Those who wait to take the benefit until age 67 receive about 43 percent more a month; those who wait until age 70 receive about 75 percent more in lifetime monthly benefits.4

 

Social Security benefits – both funding and payouts – can be complex. It is worthwhile to stay abreast of the policies, changes and strategies that can help maximize benefits. For additional information, try out this quiz – which also gives a detailed explanation of the correct answers to help you become better educated about Social Security.5

 

Content prepared by Kara Stefan Communications.                                                                  

 

 

1 John Wasik. Forbes. Nov. 2, 2018. “5 Things You Should Know About Social Security Changes.” https://www.forbes.com/sites/johnwasik/2018/11/02/5-things-you-should-know-about-social-security-changes/. Accessed Nov. 9, 2018.

 

2 Ibid.

 

3 Sean Williams. USA Today. Nov. 9, 2018. “Why the Social Security program will never run out of cash.” https://www.usatoday.com/story/money/2018/11/09/when-does-social-security-run-out/38452267/. Accessed Nov. 9, 2018.

 

4 Knowledge@Wharton. Oct. 3, 2018. “Delaying Social Security: How Lump Sum Payments Can Help.” http://knowledge.wharton.upenn.edu/article/delay-social-security/. Accessed Nov. 8, 2018.

 

5 Matthew Frankel. USA Today. June 2, 2018. “47% of American pre-retirees failed this basic Social Security quiz. Can you pass it?” https://www.usatoday.com/story/money/personalfinance/retirement/2018/06/02/pre-retirees-failed-basic-social-security-quiz/35343701/. Accessed Nov. 9, 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.

 

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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.

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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.

 

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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.

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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.

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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.

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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.

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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.

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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.

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