 President-elect Joe Biden addressed the country on Saturday declaring victory to become the 46th President of the United States; however, this does not make his win official. While many believe the president and vice president are elected directly by citizens, it is actually chosen by electors through the Electoral College process. The electoral college will meet on December 14th this year to cast votes and those will be counted on January 6, 2021 to declare a winner of the presidential election. While many states have laws in place to cast their ballot in the favor of the people, there are faithless electors who can cast against the vote of the people. The projected electoral votes indicate that it would be unlikely to change the outcome of the presidential election results. However, it should be noted given the way 2020 has gone.
If you have not heard, President Donald Trump filed lawsuits in Pennsylvania, Nevada, Georgia, and Michigan. With expectation to Pennsylvania these lawsuits fell flat. Lastly, recounts will take place over the next few days because the margin of victory was closer than the state’s requirement.
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Finance bloggers stick to the cardinal rule of "start with saving $1,000" but how can you do this when you feel like you are living paycheck to paycheck? I would like to introduce Lean February, it's is my favorite month. First, gives you the opportunity to get your finances ahead of schedule and start saving. Second, I always choose February because it’s the shortest month and for most people who struggle with budgeting or savings it’s an easy way to move into the new year! Quick rules for your lean month
 Groceries are a hot topic and some say it can’t be done but I know someone who shops for 3 people and has friends over 4-5 times a month on $250 of groceries. $150 should be more than plenty if you are buying for the month. Before going shopping inventory what you have in your fridge, freezer, and pantry. Identify which proteins 1-2 that you’d like to have for the month. Proteins are typically the most expensive groceries. I like to use Pinterest to create a meal plan that focuses on using those proteins and the items you currently have. Another best practice is to stick to meals with 10 ingredients or less. The more you can streamline the meals it hinders the need to purchase obscure items. When the major meals are taken care of, evaluate how much more you will have for snacks. Snacks are most commonly the impulse buys because they can be on sale. If you know how much you can spend you won’t feel like you are being restrained.
After you have paused some of your services and called to see if you can get better deals on your current expenses I have a feeling you might have some time on your hands. Keeping that in mind come up with a list of organization projects that you’d like to tackle. Clean space will lead to an overall better mindset. Document your process so when you think about doing another lean process you can note what you’d like to do differently or keep the same. Now that your done reading leave a comment with a question of how to complete the process. In the world of financial advisors, there has been a surge in publicly of the gold standard, the fee-only advisor. This is an individual who will charge a flat rate or a percent of assets under management, in industry terms, they are an investment advisor representative. These advisors are regulated by the State or SEC to document the needs of their clients and any changes in their risk tolerance, time horizon, and goals. When establishing these needs the advisor will fill out an extensive intake questionnaire to assess investable assets, liabilities, and tax planning.
Most people associate fee-only advisors to a Certified Financial Planner. Like the fee-only advisor, this is an investment advisor representative but they take another test and pays an annual fee to have this designation. In return, the CFP board creates campaigns to aware consumers of the benefits of working with a designated Certified Financial Planner. Like many designations, there is ongoing continued education to keep them current which can be purchased from their website at www.cfp.net. Here’s the thing if the advisor sells insurance products they will not be able to call themselves fee-only advisor. When the advisor sells insurance their payment is called a commission, that commission is paid by the insurance company and the advisor is not acting as a representative of that company, but an agent who is filling out a suitability form instead of this extensive process. Since it’s paid by the company and not out of your pocket the agent is not required to disclose their commission. Insurance instruments are tools for legacy planning, tax planning, and long term health care. In my opinion, to recommend these tools and understand how they fit into the big picture your agent should have an idea of the financial plan. If you outsource a portion of that plan if can allow weaknesses because there is not the careful vigilance of the financial advisor. If you are looking for an advisor, make sure they are going to fit your needs and put together a comprehensive plan for your investments and insurance needs. Our firm is an independent insurance agency that will provide you with multiple carrier options and disclose all fees. After my dad passed away at the end of August I was thankful that he had a plan in place and that we knew how execute it. October is “Estate Planning Awareness Month.” Here are some basics about estate planning that everyone should know. Everyone should have a plan Even if you think “you’re not rich enough” to have an “estate,” unless you’re homeless or destitute you should have an estate plan in place. Estate plans provide for the people you leave behind when you pass away, and help ensure that your final wishes get carried out. The last thing you want is your family members fighting over dishes or fishing poles when you’re gone, or having to sell the family home or take other drastic measures just to get by. Often estate plans help reduce taxation to heirs. Even though the estate tax exemption doubled to $11.18 million for singles ($22.36 million for couples) as a result of the tax legislation passed last December, the exemption drops back down to 2017 levels after 2025, so it’s important to plan now to help take best advantage of estate tax laws for your particular situation.1 There are important differences between wills and trusts 1. Having a trust in place usually allows your estate to avoid probate court and keeps your finances private. Trust assets are usually distributed by the trust executor once a death certificate has been issued and funds are available immediately to your family. If there are no estate planning documents, or if there is just a will in place, your family will have to go through probate court, which can take a very long time in some states, and can be very costly in terms of legal fees. Additionally probate court proceedings are generally published in the newspaper so that your financial situation and your assets become public knowledge. 2 2. A will is the document used to specify guardians for minor children. 2 3. It is often recommended that a will be used with a “pour-over” provision for all assets not specifically named in a trust; and/or that an exhibit or list of items be attached to a will to name individual gift recipients, be the items large or small, valuable or just sentimental. Beneficiary designations take precedence Beneficiaries you have named on life insurance policies, bank accounts and/or 401(k)s or IRA accounts take precedence over your estate planning documents. 3 This is extremely important to address, and all docs should match so that there are no conflicts or surprises later. Life changes such as divorces, deaths or birth of new children/grandchildren require that your documents and beneficiaries be updated. That’s why regular reviews are critical—we recommend annual reviews of all your documents, policies and accounts. Attorneys may not know financial ramifications Estate attorneys can create the documents you need, but they may not know about all the ins and outs of investments and insurance policies that can help expedite efficient wealth transfer, reduce potential problems and/or mitigate taxation as laws morph and change. Most experts agree that you need a team which includes your estate attorney, your CPA or tax preparer, and your financial advisor or wealth planner. The importance of digital assets Online assets are a new area of estate planning that need to be incorporated into your plan. The Uniform Fiduciary Access to Digital Assets Act, which has been passed in most states, provides that an owner of digital assets can specify who will be able to access and dispose of any digital assets after death so that email accounts, social media accounts, PayPal accounts, domain names, intellectual property stored on a computer and other things like virtual currency can be accessed by heirs. 4 Call us 425-610-9226. Let’s work together to update or create the proper distributions of your funds. Sources: 1 “How the new tax law upends estate planning,” Financial-planning.com https://www.financial-planning.com/news/how-the-new-tax-law-changes-estate-planning-trusts-income-tax-planning (accessed October 18, 2018). 2 “Will vs Trust: Knowing The Difference,” Investopedia.com. https://www.investopedia.com/articles/personal-finance/051315/will-vs-trust-difference-between-two.asp (accessed October 18, 2018). 3 “Why Beneficiary Designations Override Your Will,” Thebalance.com. https://www.thebalance.com/why-beneficiary-designations-override-your-will-2388824 (accessed October 18, 2018). 4 “The Big Hole in Estate Plans: Digital Assets,” Thinkadvisor.com. https://www.thinkadvisor.com/2018/10/04/the-big-hole-in-estate-plans-digital-assets/ (accessed October 18, 2018).  Risk Management Is About More Than Your Investments
A lot of financial services professionals talk about “risk” when it comes to your stock market investments. But risk can encompass more than your investment risk tolerance. The broader definition of financial risk is the possibility of loss from any unexpected life event. For instance, what will happen to your family’s income if one spouse passes away, becomes disabled or unable to work, or needs long-term care? What happens to your kids’ education fund, or your retirement? Risk management in this case means shifting risk of financial loss from adverse events to an insurance company in order to protect your family’s assets and lifestyle. New Innovations in Life Insurance First and foremost, life insurance offers financial protection to your family by helping mitigate the risks that you face from life’s unexpected tragedies, as it has done for hundreds of years. But in the last decade, life products have expanded and improved to offer much more. Many new types of insurance policies and policy rider innovations have come about in order to answer the needs of Baby Boomers–10,000 of whom are turning 65 every day and will continue to do so until 2030.1 Life insurance companies are now covering a whole host of pre-retiree and retiree risks with permanent universal insurance policies and fixed annuities which offer features like: 1) Lifetime income in retirement 2) Spousal survivorship benefits 3) Long-term care coverage if needed 4) Disability coverage if needed 5) Income tax advantages 6) Tax-advantaged wealth transfer or death benefit Universal Life Insurance or Fixed Annuities as Part of the Retirement Portfolio In addition to the many retirement risks they can help address, new types of life insurance policies and fixed annuities may have other attractive advantages. Some of the newest policies offer the chance for growth by earning interest linked to market performance. And this potential growth comes with guaranteed* principal backed by the financial strength of the insurance carrier. These are just some of the reasons more and more financial advisors are including permanent life insurance and/or annuities as part of the retirement portfolio itself. Let’s Talk About Your Family 1 Pew Research Center “Baby Boomers Retire.” http://www.pewresearch.org/fact-tank/2010/12/29/baby-boomers-retire/ (accessed September 10, 2018). This article is for informational purposes only and is not intended to provide any recommendations or tax or legal advice. We encourage you to discuss your tax and legal needs with a qualified tax and/or legal professional. *Guarantees and protections for fixed or fixed indexed annuities and/or universal or indexed universal life policies are subject to the claims-paying ability of the issuing insurance company. These policies are contracts purchased from a life insurance company. They are designed for long-term retirement goals, and also intended for someone with sufficient cash and liquid assets for living expenses and unexpected financial emergencies, including, for example, medical expenses. Depending on the product, they may include surrender charges, rider charges, life insurance premium charges and/or other fees as detailed in the individual contract. An indexed annuity or indexed life insurance product is not a registered security or stock market investment. As such, it does not directly participate in any stock, equity or bond investments, or index. Gains on indexed accounts are based on participation rates and other conditions offered by the issuing insurance company. Depending on the nature of funds used to purchase annuities, withdrawals may be subject to income tax and withdrawals before age 59½ may be subject to a 10% early withdrawal federal tax penalty.  When you hear “risk of longevity,” what exactly is meant? Longevity refers to “long life” or “length of life.” Simply put, longevity risk is the risk that someone will outlive their wealth and available income. It’s a fact that people are living longer. Not only has the average life expectancy increased, but one out of every four 65-year-olds living today will live past the age of 90. One out of 10 will live past 95--the number of people living to age 100 increased more than 43% from 2000 to 2014! From a financial point of view, living a long time can drastically affect many of your retirement costs, impacting and presenting a “risk” to many different items in your budget—right when you will be living on a fixed income. Let’s examine some of the issues affected by longevity: 1. Health Care Health care expenses are a huge chunk of any retirement budget—even with Medicare. A healthy 65-year-old couple can expect to spend approximately $266,589 to cover health care expenses not covered by Medicare Part A during their retirement for Medicare Parts B, D and a supplemental insurance policy (sometimes called Part C). This assumes at least one of them worked and paid Medicare taxes and so their Medicare Part A premiums are covered. And that total doesn’t even include dental, vision, co-pays, deductibles and out-of-pockets. When you add those in, a couple’s costs rise to $394,954 throughout retirement. Living longer not only increases yearly health care outlays, but your chances of developing a serious health issue increase as you get older. 2. Incapacitation Your odds of becoming incapacitated also increase with age, which could lead to the need for nursing care. In fact, 70% of people over 65 end will up needing some form of assistance. The average yearly cost of a semi-private room in a nursing facility is $80,300. Yes, you can qualify for Medicaid to cover your nursing home stay—if you spend down all of your assets to poverty level. There are options to this scenario that you definitely want to consider. 3. Inflation Prices will continue to get higher through the years—in fact, inflation is part of the Federal Reserve’s monetary policy. Inflation undermines your purchasing power over time. While it’s true that if the Consumer Price Index (CPI) rises in a given year, retirees sometimes get a COLA (Cost-of-Living Adjustment) increase on their Social Security benefit check, you’d best not count on that. For the last few years, there has been no COLA, primarily because of low oil/gasoline prices. It goes without saying that the longer you live, the more you will spend on consumer goods and living expenses. 4. Excess Withdrawal / Inadequate Income If your portfolio isn’t structured properly to provide enough income for a long life, you really are at risk of running out of money. Unexpected family expenses or needing to withdraw money during a market downturn can affect your nest egg negatively for the long term (kind of like compound interest in reverse). The death of a spouse is also a risk to your income, as Social Security benefits will likely decrease and taxes will increase due to fewer household exemptions. The point of this article is not to inspire fear, but to inspire early, realistic retirement planning. Don’t worry about the future--let’s make some solid plans!  There has been a lot of talk about 401(k) since the House passed the Secure Act. It will still need to be voted on by the Senate and passed to the president but there are many large companies that are lobbying for it’s approval. I think this is a perfect time to review one of the bill’s most controversial provisions allowing more annuities in 401(k) plans. No one can argue that many Americans are aware of the word “annuity” and are quick to judge so let’s have a quick review of the history of annuities.
The annuity concept has been traced back to the Roman Empire. In return for their service, soldiers and their beneficiaries would receive annual payments for life known as “annuas,” the basis for the word annuity. In the 17th century, these contracts were structured in the form of a “tontine” by feudal lords. Investors would contribute to a large pool of cash and receive annual payments for life. Upon death the payments ended and the remainder was redistributed among the group. If you were lucky enough to outlive everyone else in this arrangement you received the balance of the pool. Today Despite their simple structure in the beginning, annuities have become increasingly sophisticated over time. When you invest in something, typically you assume all the risk. Since annuities are not investments, but are contracts with an insurance carrier, they allow you to transfer investment risk to the carrier. The risk you assume is that annuity payouts are subject to the claims-paying ability of the insurance company. (The only exception might be “variable annuities,” which are linked to a market index and rise—and fall—in value with the index.) Recent innovations like fixed indexed annuities allow for growth in relation to an index, but the owner is protected from loss of principal if the index falls. With people living much longer and pensions quickly becoming a thing of the past, annuities can help provide income throughout retirement without the fear of running out of money. If you are considering the purchase of an annuity, it’s important to speak with a financial professional who understands them, and can explain the fine print of an annuity contract. These investments are not for everyone and in the event that you employer has decided to open this option to you it’s best to discuss it with an Insurance Professional. Let me know if there is any way I can help you get clarity.  I highly encourage everyone to get a plan together yet many people still have trouble following through with the steps. I am going to reveal the steps you need to take leading up to your retirement date and you might be shocked to know that you need to start 10 years before you’d like to retire.
10-year plans:
 As you imagine going into retirement you might dream of traveling or tending your garden. I think everyone’s goal out of retirement is to be able to reap the benefits of the many years of hard work. Stress should be the last thing on your mind but for many retirees, they have some top regrets like; not saving enough, relying on social security to heavily, and not paying down debt. How does one avoid these issues?
1. Not saving enough Take advantage of employee sponsored 401(k) is the obvious choice but statistics range from 30%-40% of private sector employees don't have access to a 401(k). In that case, saving a Traditional IRA and Roth IRA wouldn't be enough. Individual accounts for savings are instrumental in creating cash flow. For those who also don't have access to a pension, universal life insurance products widely known by Tony Robbins have become a great savings tool as well. 2. Relying too heavily on Social Security When discussing cash flow there are many tools out there that retirees and individuals should consider to make up the difference. Dividends from an individual account, annuities, life insurance, and investment properties. All of these have their pro's and con's but if you are able to speak with a professional about products or investments well before retirement in your 40's or even 30's quick conversations can have a lasting impact. In reality, you should also keep in mind that the Social Security benefit will be pushed back later and you may never get it. 3. Debt in retirement Growing up we were told not all debts are equal and that some are good for tax purposes or to build credit, these rules don't apply when you retire. 10 years prior to retirement you should seriously consider a debt consolidation strategy to co-inside with your retirement date. I say 10 years to make sure you are not caught up in with tax burdens from large withdrawals from an IRA. You will always want to talk to a tax professional about consequences. Above all the most important action is to put a timeline together. When you are able to review it regularly with a professional they can help guide you to avoid major pitfalls. I think you will look forward to my next post “Retirement Checklist”.  After I got my first source of steady income at 22 I kept thinking "Why am I giving my money away to rent when I could have a house paid off by 50"? I pictured what I'd do in retirement, take my suped-up golf cart to the course and then head to the store for groceries. I had to make sure there were a couple of restaurants that were in walking distance too. I even wanted to be close to a hospital in case I got hurt. When I found my checklist home I bought it, not with my father not with a spouse all alone as a single woman at 23. I lived in it for a year before I was offered a job in San Francisco, then I ended up turning it into a rental down the line.
As millennials, my husband and I are looking to purchase another rental property and my mindset is still the same. If we can start purchasing rental properties now they should be paid off by the time we need retirement income. We don't have pensions and while we are paying into social security "full retirement age" will most likely be pushed back to age 70. Why is passive income through rentals so attractive? Here are my top 4 reasons.
When evaluating properties not all are created equal and realistically you should have a property manager helping you along the way. But if you are able to start now you could have multiple properties paid outright to improve your income stream in retirement. Now start asking a professional if you might fit your retirement plan. With Women’s History month coming to a close it’s be wonderful to celebrate the strides that women have made to get us to have equality but it never ceases to amaze me how finances can be so lopsided. There are still practices out there that will funnel questions through my husband about our finances (not knowing my background) and keep little eye contact with me. Why is that? It wasn’t until recently that the finance industry was EXCLUSIVELY run - and dealt primarily with men. While most data is comparable between men and women about preparing a plan, what is their biggest concerns, and what’s important in retirement. The biggest difference between men and women is where they turn for advice. Over half of women surveyed cited they would go to workplace resources as their first choice, where most men cited online resources*. As I write this blog post I am aware that my primary intended audience will not find this information because of that stat.  Here are my tips on becoming financial fit:
As you look for someone to handle your finances you need to come up with an outline to guide you. Along with that you must feel confident in the relationship that you have with your advisor and have regular communication. I look forward to sitting down with you to go over your goals and plan to move forward to an early retirement. *Empowered - Embrace responsibility northamericancompany.com It seems like the answer should be fairly straight forward but in reality it depends on several factors the biggest one being taxes. If you are looking to take out a lump sum of money to pay off your mortgage before you go into retirement you may want to reconsider the taxable implications of how you have received this money. Let’s take 2 different examples of paying off a $50,000 mortgage and your taxable income is $38,500 as a single filer. Example A: IRA Distribution Withdrawing money from these accounts will be taxed at ordinary income. If you are going to need $50,000 you will need to pay taxes on that distribution. If you add the $38,500 wages to the $50,000 distribution you may jump from a 12% bracket to 24% 1. In that case you will need to pull out roughly $66,000 to cover your taxes  Example B: Investment Account The basics on withdrawing from these accounts are conditional so I have made a map that will guide you in the amount of taxes that you may have to pay.   Another great option is what I like to call bridging. This is when you have decided that you have saved enough in your retirement account and instead of maxing out contributions you reduce it to the min for the match and save the rest in a high yield savings account. This is not for everyone and you will need to be aware of the tax implications that it will cause you. With that being said if you are looking to use the funds less than 12 months you will have protection of principal and growth at rate from 2% or more with full liquidity.
Reducing your debt in retirement is always a best practice because you never know what will happen. I highly recommend before you make a decision like this is to talk to your CPA and financial advisor to see how a longer term plan can reduce your taxable liability and coordinate timing of your retirement. Sources: https://taxfoundation.org/2019-tax-brackets/ 1  Happy Valentine’s Day! I have to admit this is one holiday that I could never get behind because of two reasons. First, were men "had to" buy women gifts or cards to prove their affection to one another, most of the time in front of others. Second, I worked in the restaurant industry for 10 years. If that's not explanation enough I would recommend you pick up a shift at your local steakhouse on this day. While I may be scorned from the celebration I know that it’s a good reminder to keep you relationship top of mind. And if you are a financial advisor, like me, it’s the perfect time to remind you that the number one stress in relationships is MONEY. If you are in a deeply committed relationship there is nothing more sexy than to renew your commitment to your mutual financial success. Here are some ideas to say “I do” to this month. • Vow to protect yourselves from emergencies During the government shutdown early this year we learned that 40% of Americans don’t have enough money set aside to handle even a $400 emergency. Whether you determine you want an amount equal to six months’ or 12 months’ worth of living expenses, vow to set aside an emergency fund in liquid, readily-accessible accounts so that you have adequate cash on hand should you need it. • Vow to make saving and retirement planning a priority for you both Even though retirement accounts are held separately, it’s important to have a shared vision about your retirement together. Be sure to meet with your retirement planner or financial advisor to discuss your future goals and time horizon. Other financial goals should also be prioritized so that you’re both on the same page, like saving up for the kids’ college expenses or the daughters’ weddings. • Vow to protect your family finances by shifting risk Along the same lines as an emergency fund, work with a financial advisor to determine how much risk you both face from other potentially life-altering events. What would happen if one of you suddenly became unable to work or function due to a disability? What if you required nursing care? What if one of you suddenly passed away? Insurance companies offer policies designed to shift many of life’s unexpected financial risks away from your family. Be sure to compare policies offered by multiple highly-rated insurance companies to help ensure you get the best coverage for your premium dollar. • Vow not to keep secrets about money and keep the communication flowing Hopefully you’ve been honest from the beginning of your relationship about your level of debt, how you handle sticking to a budget, or whether or not you have a low credit score. Understanding each other’s financial position and money habits is the first part of being able to take control of your finances together in order to achieve mutual goals as a couple. And remember that it’s important that both of you understands your overall combined financial picture, even if one of you pays the bills or the other takes the lead role in investing. Don’t delegate this, make it a point to stay in the loop with financial decisions. Even if you have separate bank accounts to handle the day-to-day finances, you both need to understand where you’re at and where you’re headed when it comes to your financial future as a couple, especially your plan for retirement. Even if it doesn’t seem exactly romantic, talking about money can make your relationship a more perfect union for the long-term. Aiming “for richer” rather than “for poorer” together can strengthen your matrimonial bonds. If your relationship is maturing and you are looking for a mediator to help guide you with couples financial counseling and advising. Text me (425) 610-9226 Book an appointment. https://www.consumerreports.org/personal-finance/february-financial-to-do-list/ Sources: CNN, “40% of Americans can't cover a $400 emergency expense.” https://money.cnn.com/2018/05/22/pf/emergency-expenses-household-finances/index.html (accessed February 11, 2019). Forbes, “6 Financial Vows Couples Should Take To Heart.” https://www.forbes.com/sites/judithward/2019/01/23/6-financial-vows-couples-should-take-to-heart/?ss=personalfinance#1a8149385241 (accessed February 11, 2019).  Many times at the end of my meetings, after we have discussed all the statements that they have brought and we have the projections lined up. The client will say “I had an old 401(k) but I never did anything about it. I don’t have any statements anymore and I think they changed to a different company. “ As a common occurrence I have come up with the process for your to get back your old 401(k). First, call your previous employer HR department and ask them for the current 401(k) providers. Company sponsored plans move all the participants over to the new custodian and will have the providers information to give to you. Most likely you will have to go through the phone tree and verify your identity. At that point you will be passed along to a representative who will verify this information again and they will ask you how can they help you! This is when you are going to ask to proceed with an IRA Rollover. What does that mean? You are no longer working at the company and you will be opening up your new account to deposit your funds into so that you can manage it on your own. You can set up an account at any custodian like Schwab, Vanguard, or TD Ameritrade. These are the market leaders for low cost trading and have a plethora of investment options. The helpful representative will ask you if you have seen the 30 day tax notification. This notification will be provided by the company within 30 days or you can view the one in the source notes. You will have 60 days after you receive the payment to make the deposit. If you do not do a direct rollover, the Plan is required to withhold 20% of the payment for federal income taxes 1. At that point the representative will confirm the address and name of the new firm you would like the payment made out to. This check will either be mailed to you or the receiving firm. My Company closed down and I can’t find my 401(k) Whether you had to resign abruptly or was terminated from your job one of the last things you think to do is rollover your 401(k) into a self directed IRA. But many people can never find the time to do this and naturally in retirement you now have all the time in the world to find that lost money. But in the case where the company has been dissolved we are here to help. Companies are required by law to mail abandoned funds to the owner’s last known address. If they’re returned or the owner can’t be reached, the assets must be relinquished to the state. In Washington it’s easy enough to find these funds visit www.ucp.dor.wa.gov/. Then enter your first and last name then search. You will go through a claim process to get receive these funds and will need to verify your identity. Filing electronically will be the fastest way to process your claim. Lost 401(k) holding mutual funds could take up to 90 days to process. Create your username and password to check in along the way. When you do receive your funds make sure to deposit it into your IRA within 60 days to avoid the 20% taxation. If you need help along the way we are always here to help. Feel free to contact us at 425-610-9226 Source: https://www.irs.gov/retirement-plans/retirement-plan-participant-notices-distributions 1 https://www.irs.gov/pub/irs-drop/n-09-68.pdf  We work with dozens of people to help them create retirement plans. But in order to get to a successful retirement, there are thousands of small decisions along the way. Like, should you drive through your local coffee place and grab a latte this morning? Go with the office gang for lunch at that little bistro across the street, which usually costs you around $15? Should you order pizza delivered for dinner tonight because you didn’t go to the grocery store yesterday? Grab that new shirt because it’s 50% off?
Sticking to a budget is the beginning of mastering your money. But why do so many of us find it difficult? A recent article in Forbes magazine may hold some clues as well as ideas about how to take control of your discretionary expenses. The author, Thomas Dichter, advocates writing every expenditure down, to the penny, as well as calculating how well you met your budget on an annual basis. (He usually comes within 1% of his goal, and many times comes in under, which he attributes to his meticulous record-keeping.) Mr. Dichter explains how he started the process: I forced myself to write down what I had spent under each category. After a week my inner accountant had emerged and I kept at it. By month six I noticed something magical: the act of tracking expenses had a feedback effect on my spending. My expenses in the categories that all of us tend to ignore (take-out food and coffee, a candy bar at a vending machine, impulse buying a shirt, or a magazine at the check out line, etc.) were going down, not because I wanted to deny myself, but because I could see what was happening. At the end of that first full year those few minutes a day of what became compulsive recording paid off. It took me about a half hour to add up each category and then total it all (a side benefit became obvious when I had to do my taxes). Then I compared that total to my take-home income for the year and saw I was ahead, for the first time in my life. I decided to do a budget for the next year, using the past year's expenses as a guide. At the end of that year I saw I had come within 1% of my budget estimate. Passing that self-imposed test soon became an annual goal. Each year on December 31st, I see how close I've come to my budget estimate of twelve months earlier. Usually I come within that 1%, sometimes over but more often under. The author goes on to say that he believes that easy access to credit, along with an economy based on consumption, contributes to the overspending problem in America. And the main excuse for resisting his simple method—“I don’t have time”—is just a cover story for other, deeper reasons. For example, he believes that some people don’t really want to know what they spend, because it might rock their feeling that “everything is okay.” Some operate on the subconscious wavelength that it’s better to risk their financial future rather than turn into some kind of accounting nerd or tightwad. As financial advisors who work with people every single day, we are here to tell you that managing your finances is possible, and might even be easier than you think. If you'd like to step by step help check out Financial Detox. Every Monday a new task or tip will be posted. These tips will not take long to do but they will have a major impact on your big picture. Source: “A New Year's Resolution To Manage Your Finances: Why Is Sticking To It So Hard?” by Thomas Dichter, Contributor, Forbes.com. https://www.forbes.com/sites/thomasdichter/2019/01/01/a-new-years-resolution-to-manage-your-finances-why-is-it-so-hard/#38ef8202106f (accessed January 14, 2019).  Last week was the first anniversary of Family Retirement, LLC. Most people can say their first year in business is the hardest. If you know me from before, then you know that my first year was pretty rocky. After an unsuccessful business buyout, I was advised by my attorney to limit my marketing. This limited my ability to reach many former clients I had helped for years. As I was building my business I met with many marketing companies to help build business leads. I got help with marketing and social media strategies (which helped build this blog). But a surprisingly good number of them all told me that I should do what everyone else in the industry did -- Dinner Seminars. If you are not familiar with Dinner Seminars you might be too young but don’t worry once you reach a certain age you will receive a mailer to invite you to dinner at a very nice restaurant. Then all you do is eat nice food and listen to a presentation about annuities--the elephant in the room. I held 4 dinner seminars and invited many of my clients to see how they felt about it. The comments I got back were disturbing: “What kind of sad dinner parties does she throw? My advisor had one on a boat.” Or: “That’s it? Does she give you any other kind of free stuff?” I realized that these are not the people I want to serve. My choice in building this business was based on the fact that people need help in all aspects of their finances -- not just those who have the money set for retirement. When I take a look around and see the people who are in my industry I definitely do not fit in. I want to make real changes in the industry by mentoring my clients. I think this can only be done if I start changing the language I use about my profession: I am a Lifestyle Advisor. I am not only someone who will get you on track with your investments and help you understand the tax consequences of your retirement income stream. I am here to help you create your financial roadmap and advise on changes that happen through your and your family’s life as you continue to grow. A Lifestyle Advisor will understand that it's not only about investable assets, but other assets that combine into your net worth. As a Lifestyle Advisor, I have broken down my work into two programs: Roadmap to Retirement and Financial Detox. Financial Detox is for people who need help budgeting, paying off debt, a basic understanding of personal finances and wealth accumulation. Roadmap to Retirement is for people who are 10 years away from retirement and need to start forming a plan for income streams, tax efficiency, have or want rental properties and want to be set up for success. Here (link) you can sign up for monthly emails on financial topics to keep you on top of your financial future. The best thing you can do is schedule a phone appointment with me and see what steps we can take together. There is no charge for this meeting, if you decide to move forward with one of my services it’s 1.25% for me to manage your money, $250 per hour for projects, or NO CHARGE to you for insurance products (the insurance company will pay me to work with you). Just like you would go to a store you’d want to know the price of what you might be paying. If I am not in the budget talk to me and let’s see how we can figure it out. Check my content out on Facebook @familyRetire or Instagram @familyretire  1. The Social Security COLA (cost of living adjustment) in 2019 will be 2.8%. This is the largest COLA increase from the Social Security Administration since 2012.1 2. Social Security benefits are often taxed. If you work and are at full retirement age or older, you can earn as much as you want and your benefits will not be reduced; however, you may have to pay taxes on them. If your annual combined income is from $32-$44,000 filing jointly, you may have to pay taxes on 50% of your benefits. If your income is more than $44,000 filing jointly, then you may have to pay taxes on up to 85% of your benefits.2 Social Security calculates "combined income" by adding one-half of your Social Security benefits to your other income.2 3. RMDs can have a profound effect on taxes. Many people forget that RMDs (Required Minimum Distributions) begin at age 70½. You are required by the IRS to start withdrawing money annually from your 401(k)s, traditional IRAs and other tax-deferred accounts using a precise formula, and you must do so by December 31st of each year or owe the income tax plus a 50% penalty. Since you’ve never paid taxes on this money, you will owe income tax on your withdrawals based on your tax bracket for the year, and the income from your withdrawals are added in to the combined income amount that Social Security calculates. Some Baby Boomers are shocked at the amount of income tax they will actually owe, and come to the realization that their nest egg is actually much less than they thought. RMDs, tax planning and income planning are the major reasons having a retirement plan in place is so important. 4. Medicare isn’t free. Not only is Medicare not free, but the premiums are usually deducted from your Social Security check. Medicare health and drug plan providers often make changes to their policies each year, including changes to costs, coverage, deductible and coinsurance amounts, and what pharmacies and providers are in their network, so it pays to do your homework every year. Medicare Open Enrollment runs from October 15 through December 7, and this is your opportunity to make new choices and pick plans that work best for you; changes made are effective as of January 1, 2019. During Medicare Open Enrollment you can sign up for a Medicare Prescription Drug (Part D) Plan, switch plans, drop your Part D coverage altogether, switch from Original Medicare to a Medicare Advantage plan or select a Medicare Advantage plan from another provider. You should review drug costs because the prices of some brand-name drugs could be lower next year. As part of the recent tax plan changes, some drug manufacturers will pay more of the costs for enrollees in the drug coverage gap (also known as the “donut hole”) starting in 2019.3 5. Everyone should have an estate plan Estate plans are for the people you leave behind when you pass away. Here are some things you should be aware of:
For more information about these issues as well as many other retirement issues, book your appointment from the Home screen or below Sources:
1 “Social Security Benefit to Increase 2.8 Percent in 2019,” AARP.org. https://www.aarp.org/retirement/social-security/info-2018/new-cola-benefit-2019.html (accessed October 16, 2018). 2 “Benefits Planner | Income Taxes And Your Social Security Benefit,” SSA.gov. https://www.ssa.gov/planners/taxes.html (accessed October 16, 2018). 3 “Medicare ‘Doughnut Hole’ Will Close in 2019,” AARP. https://www.aarp.org/health/medicare-insurance/info-2018/part-d-donut-hole-closes-fd.html (accessed October 9, 2018). 4 “How the new tax law upends estate planning,” Financial-planning.com https://www.financial-planning.com/news/how-the-new-tax-law-changes-estate-planning-trusts-income-tax-planning (accessed October 17, 2018).  Every other year my husbands family has a reunion tradition it’s call STI or “Spending The Inheritance”. Grandpa passed away shortly after he retired and grandma started a tradition to get the family to see each other more often. During this year’s trip to Kauai grandma had a fall just before bed. We call the emergency services to see if she needed to be taken to the hospital, but it seemed that there would be little they could do. Since this was not her first fall it triggered the conversation about using her long-term care. I offered to look at her policy and get what might be the pitfalls. I didn’t get a chance to look at her policy because Thanksgiving she had a stroke and passed away shortly after. She never got to use the policy. Before purchasing a standalone policy these are the five things you should know. 1. There are different types of facilities providing increasing levels of care.1
If you hear the words “long-term care” and automatically think “nursing home,” you should know that long-term care encompasses a wide range of options and a progression of choices. The most self-sufficient seniors might live in independent retirement living facilities, while assisted living often adds medication management, daily personal care, meals and housekeeping. Continuing care retirement communities (CCRCs) offer a tiered approach so that seniors can transition on site as they require more services. Adult foster care is available in private homes run by trained caregivers—there are even special homes designated for military veterans with chronic medical conditions overseen by the Dept. of Veterans Affairs. Of course, nursing homes are also part of the spectrum, offering 24-hour supervision, nursing care, help with daily living activities and three meals per day. Secured memory care units, which are more expensive, are often located within nursing homes to provide a safe but more homey environment for people suffering with Alzheimer’s or dementia. Skilled nursing facilities (SNF) are not identical to nursing homes—they often staff doctors and nurses around the clock and offer physical rehabilitation services. People in these facilities may be bedridden, need two people move them, and require dialysis or other intensive treatments. 2. Statistics vary on how many people will need long-term care. With 10,000 people turning 65 every single day in America until around year 20302, there are varying statistics regarding the need for long-term care—some as high as 75%.3 In late August, Morningstar put together their 2018 updated statistics, placing the percentage of people 65 or older who will need long-term care at 52%, the majority female.4 3. Alzheimer’s dementia is on the rise due to longevity.5 According to the Alzheimer’s Association, “Someone in the United States develops Alzheimer's dementia every 66 seconds.” An estimated 5.5 million Americans—one in 10 people age 65 and older (10%)—are living with Alzheimer's dementia, almost two-thirds of them women. In addition to gender, race evidently also plays a role in the risk of developing the disease. Hispanics are about one and one-half times as likely to have Alzheimer's or other dementia as whites, while African Americans are about twice as likely to have Alzheimer's or other dementia as whites. 4. Long-term care costs are high, and rising. According to Genworth’s 15th Annual Cost of Care Survey, the “blended annual median cost of long-term care support services has increased an average of 3% from 2017 to 2018, with some care categories exceeding two to three times the 2.1% U.S. inflation rate.” 7 Annual National Median Costs 2018 8 Homemaker Services: $48,048 Home Health Aide: $50,336 Adult Day Health Care: $18,720 Assisted Living Facility: $48,000 Semi-Private Room in a Nursing Home: $89,297 Private Room in a Nursing Home: $100,375 Most expensive states in order are Alaska, Hawaii, Massachusetts, New Jersey, Connecticut, New York, New Hampshire, North Dakota, Vermont, Delaware, Maine, Washington, Minnesota, Oregon and California. 7 5. Hybrid policies are now more popular than standalone LTC policies.9 When it comes to helping people solve the problem of potentially needing long-term care, hybrid whole life, hybrid indexed universal life (IUL) and hybrid annuities have been more popular than traditional long-term care policies, and they are becoming more popular every year. The reasons for the rise in popularity have to do with a combination of factors, including the rising cost of standalone LTC policies as well as the attractive features of some new hybrid annuities and life policies. The elimination of the “use it or lose it” nature of typical long-term care insurance policies, in some cases providing a death benefit if the policyholder does not need long-term care during their lifetime, is often cited as the most attractive feature of hybrid policies. If you would like more information about how to make sure you are covered for long-term care if you need it, please call/text (425) 610-9226. Sources: 1 “What's the Difference Between Types of Long-Term Care Facilities?” USNews.com. https://health.usnews.com/wellness/aging-well/articles/2018-10-30/whats-the-difference-between-types-of-long-term-care-facilities (accessed November 5, 2018). 2 “Baby Boomers Retire,” Pewresearch.org. http://www.pewresearch.org/fact-tank/2010/12/29/baby-boomers-retire/ (accessed November 5, 2018). 3 “Long Term Care Statistics,” LTCtree.com. https://www.ltctree.com/long-term-care-statistics/ (accessed November 5, 2018). 4 “75 Must-Know Statistics About Long-Term Care: 2018 Edition,” Morningstar.com. https://www.morningstar.com/articles/879494/75-mustknow-statistics-about-longterm-care-2018-ed.html (accessed November 5, 2018) 5 “Alzheimer’s Is Accelerating Across the U.S.,” AARP.org https://www.aarp.org/health/conditions-treatments/info-2017/alzheimers-rates-rise-fd.html (accessed November 5, 2018) 7 “Top 15 Most Expensive States for Long-Term Care: 2018,” Thinkadvisor.com. https://www.thinkadvisor.com/2018/10/24/top-15-most-expensive-states-for-long-term-care-20/ (accessed November 5, 2018). 8 “Cost of Care Survey 2018,” Genworth.com https://www.genworth.com/aging-and-you/finances/cost-of-care.html (accessed November 5, 2018). 9 “Why hybrid policies are so popular,” Thinkadvisor.com. https://www.thinkadvisor.com/2018/03/28/why-are-the-new-hybrid-ltc-policies-so-popular/ (accessed November 5, 2018). Further reading: “How clients can use annuities to pay for long-term care,” Financial-planning.com. https://www.financial-planning.com/news/as-ltc-insurance-prices-rise-long-term-care-annuities-gain-popularity (accessed November 5, 2018). “Could Your Long-Term Care Premiums Be Hiding in Plain Sight?” Morningstar.com. https://www.morningstar.com/articles/879259/could-your-longterm-care-premiums-be-hiding-in-pla.html (accessed November 5, 2018). “Hybrid policies for long-term care,” Chicagotribune.com. https://www.chicagotribune.com/business/sns-201806261243--tms--savingsgctnzy-a20180626-20180626-story.html (accessed November 5, 2018). “Hybrid Policies Allow You to Have Your Long-Term Care Insurance Cake and Eat It, Too,” Elderlawanswers.com. https://www.elderlawanswers.com/hybrid-policies-allow-you-to-have-your-long-term-care-insurance-cake-and-eat-it-too-15541 (accessed November 5, 2018).  ‘Leakage’ can erode assets and negatively impact your retirement wealth
If you find it difficult to save or pay for big financial emergencies when they arise, tapping into a pot of money can be tempting – even if it’s your 401(k)-style employer-sponsored plan. But if you’re able to resist, rewards do come from the power of compounding. The problem, though, is that a small percentage of Americans take early withdrawals and withdrawals after age 59½ from their 401(k)s each year or cash out of their plan when they switch jobs. A large percentage – typically about 20% of plan participants – have loans outstanding. They’ve used loans from their 401(k) to, among other things, pay down high interest credit card debt, make home improvements, buy a home or refinance a mortgage, or pay outstanding bills. Some don’t repay the outstanding loans they’ve taken, however. This “leakage” – as the industry refers to it – has financial consequences. For example, the remaining balance of policy loans that aren’t repaid because of a job loss or default may be treated as a lump sum distribution and subject to income taxes and the 10% penalty tax. Moreover, a lower account balance due to leakage means less money in retirement. An analysis by Alicia H. Munnell and Anthony Webb at Boston College’s Center for Retirement Research compared some scenarios. They found that the 401(k) wealth of a 60-year-old plan participant who began contributing at age 30 could be reduced by about 25% because of leakage compared to a participant who didn’t withdraw, cash out or fail to repay loans. The reduction in plan wealth was similar – 23% – for an individual who rolls over money from a 401(k) plan three times during his or her career with the initial rollover into an Individual Retirement Account (IRA) at age 30. (The research, published in 2015, includes a few assumptions such as contribution rates, employer match and annual investment return rates. You can find more details here 1.) The good news is that employers are focusing on decreasing leakage and many are turning to financial wellness programs to improve employee financial behaviors, according to Fidelity Investments. And loan usage has been trending lower in recent years, according to Fidelity’s second quarter analysis of retirement plan accounts. That analysis found that the percentage of employees with a 401(k) loan fell to 20.5%, its lowest percentage since 2009’s second quarter when it was 19.9%. Among Gen X workers, who historically have the highest outstanding loan rate, the percentage dropped for the third straight quarter to 26.4%. The data is based on Fidelity’s analysis of 22,600 corporate defined contribution (DC) plans and 16.1 million participants as of June 30 2. While participants may have good intentions for what those 401(k) loans are earmarked for, the loans could hold back participants from fully achieving their financial retirement goals. That’s because participants with outstanding loans might reduce their plan-saving amounts to pay off the loans, or stop saving altogether until the loan is paid off and they recommit to deferring some of their salary to their 401(k)s. Kevin Barry, Fidelity’s president of workplace investing, noted that the stock market’s performance over the past several years has “definitely” helped retirement savers. But now would be a good time for investors to take a moment and make sure they’re doing their part to meet their retirement goals. “Markets may go up and down, but there are a number of steps individuals can take, such as considering a Roth IRA, increasing your savings rate and avoiding 401(k) loans, which can play an important role in their long-term savings success,” Barry said, in a news release. Now, indeed, is as good a time as any to connect with your retirement goals. Call us for a detailed financial and retirement income strategy session or overview that fits with your needs and goals. We’re here to help you stay on track! Call us at – 425-610-9226 Sources: 1 “The Impact Of Leakages On 401(k)/IRA Assets,” Alicia H. Munnell and Anthony Webb. Boston College’s Center for Retirement Research, February 2015. http://crr.bc.edu/wp-content/uploads/2015/02/IB_15-2.pdf 2 “Fidelity Q2 Retirement Analysis: Account Balances Rebound, While Auto Enrollment Continues to Drive Positive Savings Behavior,” Fidelity Investments, August 16, 2018. https://www.fidelity.com/about-fidelity/employer-services/fidelity-q2-retirement-analysis-account-balances-rebound  As the leaves turn brilliant colors and the weather cools, harvests are underway across the farmlands of America. The bounty that will be headed toward our tables is the result of seeds sown months before. This is an excellent reminder that, in order to reap the rewards of a bountiful retirement, you need to plant the right seeds in advance. This is a critical issue for baby boomers, as the results of a 2016 survey on retirement readiness (by PNC Bank) revealed:
Prepare, Prepare, Prepare "Due to advances in medical science, life expectancy is increasing, and people are facing the prospect of spending more time in their non-earning, retirement years," says Robert R. Johnson, president and CEO of The American College of Financial Services. Many of us are going to live longer, and we need strategies to surmount the potentially heavy cost of medical care…to protect ourselves and our families. While traditional long-term care insurance has its drawbacks, there is a new wave of hybrid insurance products that could be financial lifesavers when you need it most. You can research these online or save time and schedule an appointment to see me. Create a Harvest Plan If you don’t have millions stowed away for retirement (or even if you do) you need to review all your assets and see what changes you might need to make. Knowing your current assets and anticipated Social Security income, we can craft a plan to ensure you maximize your Social Security earnings with a detailed income plan and optimized claiming strategy. Will your Social Security income be enough? Together we can explore several scenarios that are custom to your needs and opportunities. Having helped many clients reap the reward of a bountiful retirement, we are happy to help you:
  When and how should you start claiming your social security benefits? Recent changes have made claiming your social security benefits look a little simpler. There used to be a whopping 567 different ways to claim your benefits and an over 100,000-page manual that interpreted each way. But, the strategy to claiming social security benefits is still far from simple. So, here’s the secret strategy you should consider: “Longevity Risk.”
What is longevity risk? Simply put, it is the risk that you will outlive your money. How many of you know someone that lived to 100? Were they prepared? There is a fine balance to creating sustainable income that will last as long as you. Social Security alleviates some of the worry and for most of us can be the biggest asset in our portfolio. When I evaluate my clients’ potential income streams I am always pushing the boundaries. The most straightforward claiming strategy is at 62, 66, or 70, but those are just ‘mile markers’--the devil is in the details. Evaluate your family history. Are you healthier than your parents? Have you been tested for hereditary conditions? Family can provide a lot of insight. I have my father’s heart and in my future I may need to watch out for CHF (congestive heart failure). Being proactive with your health can prolong your life--but you should also be proactive with your money so it lasts as long as you do. While researching this topic I found a great resource: the Actuaries Longevity Illustrator. This online tool asks a series of questions that help estimates your probability of living to a certain age. My jaw dropped at my discovery--I had a 50% chance of living to age 90. My family history had no such indication. I started planning for the chance I would live that long, or even longer. This resource is one of many that you can use to decide what is the best time to take Social Security. As I create my own plan for retirement I know a few things will be certain. Social Security will have many more changes before I am able to claim. I know that I will have to plan to live longer than I could possibly imagine. I know that there will be periods of inflation. I know I need to save more than what is comfortable in my budget. I know my financial plan will change. That’s why it’s important to work with someone who is adjusting your financial plan for the challenges that are not only a head but the ones you are in currently. “Social Security: There is a better way,” Center for Retirement Research, Boston College, September 2012.  The 2018 U.S. Trust Insights on Wealth and Worth® survey found that while increased wealth provides greater freedom, only half of high-net-worth individuals have a plan in place to optimize the opportunities their wealth provides. However, creating and continuously evolving a customized plan is the key to putting wealth into action.
Findings from a recent survey of high- and ultra-high-net-worth adults across the United States revealed that while increased wealth brought greater freedom to people, most felt they had still not optimized their opportunities for taking risks, pursuing passions, giving back and making a bigger impact on the world. Comprehensive wealth planning was found to play a crucial role in why some individuals are further along in achieving their goals than others. Those individuals with a wealth manager reported an average of 65% progress toward achieving their goals, compared to an average of only 51% for those without an advisor. Indeed, the study found that those who don’t, won’t or don’t know how to plan their wealth goals trail those who do in putting their wealth into action. While 90% of those who’ve accumulated significant wealth say they’ve gained the freedom to do more with it, fewer than half have a clear purpose (47%) or plan (49%) for their wealth. Those findings come even as 72% said they have a financial plan to protect their assets. But when it comes to putting wealth into action, those in the study believe they aren’t doing as much as they can. For example, on a scale of one to 100, respondents reported the following extent of action or effort put in to achieving these important goals:
These responses indicate that there’s still a gap between intent and action among important goals. What can you take away from the thoughts of the ultra-wealthy? For one thing, whether you’re saving for retirement, catching up, or just getting started, don’t let competing priorities get in the way of what you want to achieve. With a little planning and guidance from a trusted advisor, the wealth you accumulate can help you realize those values which are truest to your heart and allow you to express and live the kind of life that’s truly important to you. Don’t let competing priorities or time pressures keep you from doing all you can to reach your objectives! Our focus is on helping you align and achieve your goals, priorities and values by utilizing the comprehensive planning and wealth-building methods we’ve developed through the years. Call us at 425-610-9226 or schedule your appointment at www.familyretire.com to get started! I am going to my sister-in-laws wedding in a couple weeks and it’s the peak of wedding season. Just like everything else, high demand means high cost when it comes to weddings. The venue is one of the most expensive aspects of a wedding, especially during peak months, with an average cost of $16,107 in 2016. (For just this reason, another expensive month for weddings is December, when weddings compete with holiday parties for venues.)  In fact, a wedding will likely be the most expensive party you will ever host in your life. After surveying nearly 13,000 real brides and grooms across America, wedding website The Knot, found that the overall cost of a wedding in 2016 was $35,329…not including the honeymoon!
In 2016, the average wedding cost topped $35,000! Where the money goes. While things like flowers and invitations can add up, there are a few primary factors that will determine your wedding’s cost more than all the others. Bankrate identified some primary areas to focus on when cost is a major consideration. Guests: The number of people who attend dramatically affects the cost of everything from the food to alcohol to the venue. The more people you invite the more expensive it will be. According to research weddings are getting smaller. The average number of wedding guests has decreased to 141, down from 149 in 2009, while the average cost per guest has increased to $245, up from $194 in 2009. Location: The cost of just about everything also varies depending on your location. From the food to the entertainment, if you want to save money, be strategic about where you choose to get married. Timing: If you want to really save money, stay away from peak season. The least expensive months are January, February and March, at least in the parts of the country which experience cold weather and harsh winters—giving new meaning to the song lyric, “it’s a nice day for a white wedding.” Plan ahead: The best way to pay for all this is to have a financial plan in place. Contact us if you need help planning to pay for a wedding or any other major life event. Sources: https://www.theknot.com/content/average-wedding-cost-2016 http://www.bankrate.com/finance/smart-spending/how-much-does-wedding-cost.aspx  Finding meaning / purpose can extend your life
A recent British study led by Andrew Steptoe, Director of the Institute of Epidemiology and Health care at University College London found that after taking other factors into account “people with the highest levels of ‘purpose in life’ were 30% less likely to die during the study period, living an average of two years longer than those with the lowest levels.” The study involved 9,000 people averaging 65 years old. (1) James Maddux, Professor Emeritus of Psychology at George Mason University in Fairfax, Virginia, reviewed the study and his team agreed that the findings make sense. Maddux noted that “people who actively search for meaning in life may be generally better at setting goals and making plans, including health care decisions.” The study review said there is good news for people who lack a sense of purpose—“it can be increased”—for instance, other studies have found that meditation, group therapy, taking classes or volunteering can help. Work longer, live longer In another study in 2016 conducted by Oregon State University, (2) research indicates that working past age 65 could lead to a longer life, while retiring early may be a risk factor for an earlier death. Chenkai Wu, lead author and currently a doctoral student in the College of Public Health and Human Sciences, did the original research as part of his master’s thesis. The researchers found that healthy adults who retired one year past age 65 had an 11 percent lower risk of death from all causes, even when taking into account demographic, lifestyle and health issues. They also found that even adults who described themselves as unhealthy were likely to live longer if they kept working. “It may not apply to everybody, but we think work brings people a lot of economic and social benefits that could impact the length of their lives,” said Wu. He became interested in the topic due to much debated mandatory retirement ages in China, which in 2015 were 50 for men and 60 for women and men in labor-intensive jobs, and 55 and 65 respectively for white-collar women and men. (3) “Most research in this area has focused on the economic impacts of delaying retirement. I thought it might be good to look at the health impacts,” Wu said. “People in the U.S. have more flexibility about when they retire compared to other countries, so it made sense to look at data from the U.S.” He examined data collected from 1992 through 2010, focusing on 2,956 U.S. adults. (2) Planning for a longer life There is no better time than now to put a plan in place which accounts for the longer years you may live, and encompasses your deepest desires as well as your current and future financial resources. Sources: 1 Pfizer, Get Old, “A ‘Purpose in Life’ May Extend Yours,” by Robert Preidt, HealthDay, July 15, 2016. getold.com. https://www.getold.com/a-purpose-in-life-may-extend-yours (accessed January 17, 2017). 2 OSU, Oregon State University, News and Research Communications “Working Longer May Lead to a Longer Life, New OSU Research Shows,” 04/27/2016. oregonstate.edu. http://oregonstate.edu/ua/ncs/archives/2016/apr/working-longer-may-lead-longer-life-new-osu-research-shows (accessed January 17, 2017). 3 USCBC, The US-China Business Council, “China’s Mandatory Retirement Age Changes: Impact for Foreign Companies,” by Owen Haacke, April 1, 2015. uschina.org. https://www.uschina.org/china%E2%80%99s-mandatory-retirement-age-changes-impact-foreign-companies (accessed January 17, 2017). Whether you have children, grandchildren, nieces or nephews headed to college when they turn get into high school, it’s always best to put anticipated higher education expenses into your financial plan--the sooner/younger the better. Call us to discuss. And read here to learn more: 1. FAFSA dates have just changed For students college-bound in the 2017-2018 school year, there is an important FAFSA date change: the application date was just changed from January 1, 2017 to October 1, 2016—three months earlier. Details here. Even if you think your family makes too much money to qualify for aid, most experts say you should apply for FAFSA (Free Application for Federal Student Aid) anyway, because colleges, state scholarship agencies, and foundations use the FAFSA when deciding who gets their scholarships, as well as how much each student will receive. Students already on campus should also apply every year. And remember that school deadlines may be different from FAFSA deadlines.2. In terms of job prospects, a college degree is more necessary than ever. According to the Department of Education,“a postsecondary credential has never been more important” because:
3. The cost of a college degree is high…second only to a home mortgage. It’s no secret that college costs have skyrocketed. “College has never been more expensive…over the last three decades, tuition at four-year colleges has more than doubled, even after adjusting for inflation,” according to the Department of Education. For the 2015-16 school year, the College Board estimated the average tuition and fees to be $9,410 per year at four-year, in-state public institutions. Room and board was about $10,000 annually. When you total various scenarios, the average cost of a bachelor’s degree ranges from $52,000-$130,000, depending on whether your child attends in-state or out-of-state, public vs. private university, attends community college first, and whether or not they have housing and food provided.  Chart from CollegeBoard.org In fact, these days, paying for a college education is one of the biggest outlays any family will ever make, after their home mortgage. Why so much? According to a Center for American Progress report, it was “the Great Recession and resultant state budget cuts that led to the public college tuition hikes which have unduly burdened low- and moderate-income families.” 4. Student debt is the highest in history Student debt is a $140 billion-a-year industry, with 42 million Americans bearing $1.3 trillion in student debt. The federal government holds 93% of these outstanding student loans, making the Department of Education, in essence, one of the world’s largest banks. The average class of 2016 graduate with a student loan will owe more than $37,172, the highest level of debt yet. Almost 71% of bachelor degree recipients will graduate with a student loan, compared with less than 50% two decades ago.  Wall Street Journal
5. Try NOT to sacrifice retirement for college A recent survey of parents by HSBC Group found that 98% of U.S. parents are considering a college education for their child—and 60% would be willing to go into debt to fund it. Although parents say this makes it difficult to keep up with other financial commitments, they still think it’s more important than long-term savings or credit card repayment. And 37% of U.S. parents say their children’s education is more important than their own retirement savings. Commenting on the findings, HSBC’s Global Head of Wealth Management said: “The financial sacrifices that parents are willing to make to fund their children’s education are proof of the unquestioning support they will give to help them achieve their ambitions. However, parents need to make sure that this financial investment is not made to the detriment of their own future wellbeing. “By having a financial plan to meet their family’s overall needs and reviewing it regularly, parents will be better placed to support their children’s studies without compromising on their own long-term financial goals.” A recent segment on CNBC agrees that sacrificing your retirement is not the best decision in the long run, and urges people to plan early: Watch here. Let’s discuss ways you can plan ahead to fund both college tuition and your retirement. Call us today. |
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