Long-Term Cost Planning

Did you know that spending often decreases at retirement? One reason is simply that our habits and desires may change. According to Genworth’s annual Cost of Care Survey, people spend less on transportation, vacations and food as they age. They often spend more on donations and gifts. Health care costs also consume a larger percent of spending as we age. That’s why long-term cost planning is critical. Understanding and planning for long-term needs can help you make the most of your finances today, while providing for your comfort and security down the road.

Unexpected events can also lead to a significant drop in spending. For example, a layoff or health event that causes early retirement can lower lifetime resources and force spending cutbacks.

Planning for expected and unexpected changes in your income and expenses down the road will help you maintain your desired lifestyle. There are many elements that inform such planning, such as:

  • Pensions, retirement accounts, other potential future income
  • Disability and long-term-care insurance
  • Medicare, Medicaid, private insurance
  • Projected inflation, rising costs of care

Most people will require some level of support services later in life. About 60 percent of seniors will need a cane, walker or wheelchair to remain mobile, according to the U.S. Health and Retirement Study (an ongoing project of the University of Michigan’s Institute for Social Research). And 20 percent will need help with bathing, eating and dressing. Cognitive decline will require more intensive care.

Knowing the full range of potential costs have been considered as part of your long-term financial plan creates peace-of-mind for you and your loved ones.

Long-term cost planning is part of our Core Client Services. That’s the value of Perspective.

Video Library

Scroll through the Perspective Financial Services Video Library to watch original, brief videos on a wide range of personal financial planning and investing topics. (more…)

New Employee Healthcare Option for Small Business Owners

new employee healthcare optionHealth reimbursement arrangements (HRAs) are a type of account-based health plan that employers can use to reimburse employees for their medical care expenses. Just like there are many types of qualified retirement plans, there are many types of HRAs. Effective January 1, the federal government has enacted new HRA rules that will be especially beneficial for small business owners in offering a new employee healthcare option.

Individual Coverage HRAs can now be used to reimburse premiums for individual health insurance chosen by an employee, in addition to other medical care expenses. This promotes employee and employer flexibility, while also maintaining the same tax-favored status for employer contributions toward a traditional group health plan.

The new rules also increase flexibility in employer-sponsored insurance by creating another, limited type of HRA that can be offered in addition to a traditional group health plan. These Excepted Benefit HRAs permit employers to finance additional medical care (e.g. to help cover copays, deductibles or other expenses not covered by the primary plan) even if the employee declines enrollment in the group plan.

Want more information on this new employee healthcare option? This HRA document from the U.S. Department for Human & Health Services may be helpful. You can also your advisor with any questions.

By |2020-03-18T11:01:58-07:00March 25th, 2020|Health Care, Insurance, Small Business|

Understand Why Before Deciding How

understand why before deciding howI recently sat down with a new client who needed help understanding her financial accounts. It takes two-way communication and objectivity to determine what investment strategy best serves a client’s needs. Essentially, you must understand why before deciding how. Unfortunately, this woman’s previous advisor did not take such actions.

Several years ago this person recommended (as a sales agent) she move her IRA and brokerage accounts into equity-indexed annuities. That locked up most of her investable assets for 10 years into an insurance product that levies a fee to access her money.

As we chatted, I learned she wanted to travel and take classes in her retirement. Annuities hindered her ability to do that right away. Once I took the time to understand her goals, we knew this product was not the best choice.

Situations like this are all too common and have created a stigma for annuities. Yet, some annuity products may be appropriate investments in certain circumstances. One example is a client who had not had a fixed paycheck during his career as a realtor. When he retired, we purchased an annuity for him to complement his Social Security benefits. The steady annuity income was a welcome change from the unpredictable income stream he’d had while working and gave him peace of mind in retirement.

These examples highlight the importance of knowing what you need and want before making any decisions about your portfolio. It’s critical to explore all the reasons why you are investing before deciding how to invest and what products will be most effective in meeting your goals.

To learn more about our financial planning process and investing strategies, click here.

By |2019-08-14T13:59:44-07:00July 29th, 2019|Insurance, Investing|

Comparing Auto Insurance

comparing auto insuranceComparing auto insurance can be overwhelming. As a result, many people just pick a policy and stay with it. But pricing varies depending on your age, location, vehicle and even your credit score, so re-evaluating your options every few years is worth the effort.

Here are a few points to consider:

  • If you have undergone life changes – such as having a baby, turning 25 or moving to a new city – you may be eligible for a discount. If you had a ticket or a violation dropped recently, ask your agent to remove the surcharges on your policy.
  • When talking to your agent, ask questions about your existing coverage and any extras that come with the policy. It’s important to make sure you have everything you need covered, and equally important that you are not paying for features you don’t want or no longer need.
  • Many insurance companies consider your credit score when deciding on premiums, according to Consumer Reports. If you have great credit, make sure your agent knows. If your credit is less than perfect, talk with a financial advisor about ways to improve it.

Finding the right auto insurance is possible. Know what questions to ask, and don’t be afraid to ask them. Comparing auto insurance could save you money today, as well money, time and frustration down the road if you are in an accident.

Written by Alicia Vallee, a Phoenix-based freelance writer.
Photo credit: FrameAngel courtesy of freedigitalphotos.net
By |2019-08-14T13:59:44-07:00June 10th, 2019|Insurance|