Many people in their 40s are facing an uncomfortable fact: They simply aren’t where they’d hoped to be financially. Fortunately, all their life experience can help correct for past mistakes.

“There’s a different trigger moment for everybody,” says Jay Howard, financial advisor and partner at MHD Financial in San Antonio, Texas. “But regardless of when it comes, people find themselves looking down the barrel of a gun as they consider retirement.”

One challenge is that it’s impossible to advise 40-somethings based on tidy “life stage” demographics. Some are just starting families, while others are sending offspring to college. They’re married, single, divorced, and just about everything in between.

But for those still grappling with financial instability, these four principles can help in moving forward with confidence:

1. Acknowledge what you’ve done right.
It could be one great decision sandwiched in between some fails, or just a single good habit that can mitigate the impact of a host of wrongs.

Take the example of Kiera Starboard, a 46-year-old controller at a San Diego software firm. A mom to two adult sons and a teenage stepson, she always made having sufficient life insurance—both term and permanent—a priority, the result of her previous training as a financial advisor. “Even if it was tight, I made the payments,” she says. “It was a priority for my family’s sake, and for my own peace of mind.”

Unlike the 40% of Americans who have no life insurance, Starboard was protected when the unthinkable happened last August. Less than two years into her marriage, her husband, Steve, was killed while riding his motorcycle to work—one month after they purchased a small, additional life insurance policy to supplement his employer coverage.

“To have had to deal with financial stress on top of everything else, it would have been unbearable, incapacitating,” says Starboard. “My stepson and I are certainly in a much better position today than we would have been, had Steve and I not followed the advice I used to give to others.”

2. Take action to shore up the decades ahead.
For many, the hardest part can be learning to put your own long-term future first—sometimes for the first time in your life.

“I see people focusing on their kids’ college savings, and not enough on retirement or an emergency fund for themselves,” says Starboard. Many advisors point out that kids can borrow for college if necessary, but no one can borrow for retirement.

The most important step is clear, says Howard: “You must have a written financial plan, period. Because that plan will dictate what you must do to be successful for the entirely of your life.

“The financial plan is your road map,” he continues. “In it will be your portfolio requirements, your savings goals, and your insurance-related needs.”

Finally, make sure your plan takes inflation into account, commonly estimated at 3% a year. Says Howard, “Inflation is the silent assassin that eats away at your nest egg.”

3. Apply the hard-fought wisdom you’ve gained.
“Treat the numbers determined by your plan—such as monthly savings—as bills that need to be paid,” advises Howard. When money comes in, it’s easy to start thinking of a new kitchen or a trip to Tulum. “Just be patient and keep the bills paid.”

Using that wisdom also applies to the big stuff. As the executor to her husband’s estate, Starboard has held back making any major decisions. “In a prior loss, I committed to real estate transactions and other things prematurely. At the time, it really felt like the right thing to do but my grief clouded my perception. I had a painful, expensive learning lesson.”

4. Focus on your shining future—really.
Forward thinking is an essential part of your financial plan, says Howard. “Get help really envisioning what kind of retirement you want. For each aspect, really drill down. For instance, where do you want to live? Do you want to be near your grandkids? Will you have the money to go see them? How often? It’s not just financial planning, it’s life planning.”

If all that forward thinking feels presumptuous, Howard recalls the eminently quotable Yogi Berra, who once said, “If you don’t know where you’re going, you might not get there.”

By Erica Oh Nataren
Originally Published By Lifehappens.org

If you’re one of the millions of Americans who owns a permanent life insurance policy (or are thinking about getting one!) you’ve probably done it primarily to protect your loved ones. But over time, many of your financial obligations may have ended. That’s when your policy can take on a new life—as a powerful tool to make your retirement more secure and enjoyable.

Permanent life insurance can open up options for you in retirement in three unique ways:

1. It can help protect you against the risk of outliving your assets. Structured correctly, your policy can provide supplemental retirement income via policy loans and withdrawals. Having a policy to draw from can take the pressure off investment accounts if the market is sluggish, giving them time to rebound. Some policies may also provide options for long-term care benefits. At any time, you may also decide to annuitize the policy, converting it into a guaranteed lifelong income stream.

2. It can maximize a pension. While a traditional pension is fading fast in America, those who can still count on this benefit are often faced with a choice between taking a higher single life distribution, or a lower amount that covers a surviving spouse as well. Life insurance can supplement a surviving spouse’s income, enabling couples to enjoy the higher, single-life pension—together.

3. It can make leaving a legacy easy. According to The Wall Street Journal, permanent life insurance is “a fantastically useful and flexible estate-planning tool,” commonly used to pass on assets to loved ones. Policy proceeds are generally income-tax free and paid directly to your beneficiaries in a cash lump sum—avoiding probate and Uncle Sam in one pass. Your policy can also be used to pay estate taxes, ensure the continuity of a family business, or perhaps leave a legacy for a favorite charity or institution.

“Having a policy to draw from can take the pressure off investment accounts if the market is sluggish, giving them time to rebound.”

If you do expect your estate to be taxed, you can even establish a life insurance trust, which allows wealth to pass to your heirs outside of your estate, generally free of both estate and income taxes.

Where to start? A policy review
If you’ve had a life insurance policy for awhile, schedule a policy review with your life insurance agent or financial advisor. By the time you reach mid-life, you may have a mix of coverage—term, permanent, group or even an executive compensation package.

Your licensed insurance agent or financial advisor can help you assess your situation and adjust a current policy or structure a new policy to help you achieve your retirement planning goals.

If you have no coverage at all, there’s no better time than today to get started. Life insurance is a long-term financial tool. It can take decades to build permanent policy values to a place where you can use them toward your retirement goals. And, health profiles can change at any time. If you’re healthy, you can lock in that insurability now and look forward to years of tax-deferred (yes!) policy growth.

Retired already? The best thing you can do is meet annually with your personal advisors to ensure your plans stay on track. Market conditions and family circumstances change, so that even the best-laid plans require course adjustments over time.

By Erica Oh Nataren
Originally Published By Lifehappens.org

Employers I’ve talked to all have the same goal: to help employees build a sound retirement plan to achieve financial success and security. The main components to protect an employee’s financial future are managing a nest egg, growing investments, and safeguarding against uncertainty.

The Missing Component

As an employer, you may be missing a key component in safeguarding against uncertainty – the need for long-term care. Seventy-five percent of people over the age of 65 will need some form of long-term care in their lifetime1, however, far fewer are financially prepared to handle that need. With nursing home costs averaging $84,000 per year2, it’s not surprising that many Americans are having to spend down their retirement savings to pay for care. Long-term care is custodial care received in an assisted living facility, nursing home, or your own home should you need assistance with activities of daily living or suffer from a severe cognitive impairment.

Long Term Care Insurance

Savvy employers are helping fill the uncertainty gap by introducing long-term care insurance to employees. Employers can offer long-term care insurance plans with reduced underwriting and group pricing that employees wouldn’t be able to get as an individual. Better pricing and easier approval make the product accessible to employees that couldn’t normally qualify for coverage.

Long-term care education is key to helping employees protect their retirement savings. Without your help, employees can fall victim to widely held misconceptions. They may think:

  • Other benefits will cover them
  • The government will pay for their care
  • This is only for old people

The truth is that long-term care insurance is the only benefit that covers this type of custodial care, and government options (Medicaid) are only available to people with low income and limited resources.

Shield and Supplement the 401(k)

Do you already contribute to your employees’ 401(k) plan? If so, you can spend the same amount of employer dollars, but provide richer benefits by pairing a 401(k) with long-term care insurance. By taking a small amount of contributions from the 401(k) plan and directing those toward your long-term care insurance premium, the resulting benefit can provide more than $200,000 of long-term care coverage and only slightly adjust the total 401(k) plan value.

Unlike other benefits, where providers may change from year to year, the majority of long-term care insurance purchasers will hold on to their original plan for life, and 99 percent of employees who have the coverage keep it when they move to their next employer, or into retirement. You can think of it as a “legacy benefit” that employees maintain for life to protect their retirement savings.

By Megan Fromm
Originally published by www.ubabenefits.com

 

Proposed regulations for revising and greatly expanding the Department of Labor (DOL) Form 5500 reporting are set to take effect in 2019. Currently, the non-retirement plan reporting is limited to those employers that have more than 100 employees enrolled on their benefit plans, or those in a self-funded trust. The filings must be completed on the DOL EFAST2 system within 210 days following the end of the plan year.

What does this expanded number of businesses required to report look like? According to the 2016 United Benefit Advisors (UBA) Health Plan Survey, less than 18 percent of employers offering medical plans are required to report right now. With the expanded requirements of 5500 reporting, this would require the just over 82 percent of employers not reporting now to comply with the new mandate.

While the information reported is not typically difficult to gather, it is a time-intensive task. In addition to the usual information about the carrier’s name, address, total premium, and payments to an agent or broker, employers will now be required to provide detailed benefit plan information such as deductibles, out-of-pocket maximums, coinsurance and copay amounts, among other items. Currently, insurance carriers and third party administrators must produce information needed on scheduled forms. However, an employer’s plan year as filed in their ERISA Summary Plan Description, might not match up to the renewal year with the insurance carrier. There are times when these schedule forms must be requested repeatedly in order to receive the correct dates of the plan year for filing.

In the early 1990s small employers offering a Section 125 plan were required to fill out a 5500 form with a very simple 5500 schedule form. Most small employers did not know about the filing, so noncompliance ran very high. The small employer filings were stopped mainly because the DOL did not have adequate resources to review or tabulate the information.

While electronic filing makes the process easier to tabulate the information received from companies, is it really needed? Likely not, given the expense it will require in additional compliance costs for small employers. With the current information gathered on the forms, the least expensive service is typically $500 annually for one filing. Employers without an ERISA required summary plan description (SPD) in a wrap-style document, would be required to do a separate filing based on each line of coverage. If an employer offers medical, dental, vision and life insurance, it would need to complete four separate filings. Of course, with the expanded information required if the proposed regulations hold, it is anticipated that those offering Form 5500 filing services would need to increase with the additional amount of information to be entered. In order to compensate for the additional information, those fees could more than double. Of course, that also doesn’t account for the time required to gather all the data and make sure it is correct. It is at the very least, an expensive endeavor for a small business to undertake.

Even though small employers will likely have fewer items required for their filings, it is an especially undue hardship on many already struggling small businesses that have been hit with rising health insurance premiums and other increasing costs. For those employers in the 50-99 category, they have likely paid out high fees to complete the ACA required 1094 and 1095 forms and now will be saddled with yet another reporting cost and time intensive gathering of data.

Given the noncompliance of the 1990s in the small group arena, this is just one area that a new administration could very simply and easily remove this unwelcome burden from small employers.

Originally published by www.ubabenefits.com

 

In some of my previous blogs, the foundation of the Consolidated Omnibus Reconciliation Act of 1985 (COBRA) continuation coverage was reviewed. Now that the groundwork has been laid, it is time to tread into the territories (or laws) where employers can lose their footing. The area covered in the following is that of the intersection of COBRA and the Family and Medical Leave Act of 1993 (FMLA).

The FMLA affects COBRA continuation coverage requirements. The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons for up to 12 weeks. The FMLA also protects employees, spouses, and dependents who are covered under a group health plan (GHP); those covered are entitled to the continuation of coverage while on leave on the same terms as if the employee was continuing to work.

Confusion may arise when FMLA and COBRA cross paths. A few problematic areas include determining when a qualifying event occurs, when calculating the maximum coverage period, and the consequences of an employee’s failure to pay their share of premiums during FMLA leave.

Qualifying Event

Typically, FMLA and COBRA intersect if an eligible employee does not return to work after exhausting his or her FMLA leave. While FMLA is not a COBRA qualifying event, a qualifying event could occur if the employee does not return to work or notifies the employer of his or her intent to not return to work at the end of the FMLA period. A qualifying event occurs if: (1) an employee or the spouse or a dependent child of the employee is covered under a GHP of the employee’s employer on the day before the first day of FMLA leave (or becomes covered during the FMLA leave); (2) the employee does not return to work at the end of the FMLA leave; and (3) the employee or the spouse or a dependent child of the employee would, in the absence of COBRA continuation coverage, lose coverage under the GHP before the end of the maximum coverage period. When it comes to the qualifying event of reduction in hours, the IRS specifically excludes FMLA leave from that category.

If the employer eliminates coverage under the GHP for the employee’s class of employees during the employee’s FMLA leave, then there is not a qualifying event. Any lapse of coverage under a GHP during FMLA leave is irrelevant in determining whether a set of circumstances constitutes a qualifying event or when a qualifying event occurs. Assuming the employer does not eliminate the GHP, the qualifying event occurs after the FMLA leave is exhausted and the employee does not return to work (or notifies the employer of the intent to not return to work).

Maximum Coverage Period

A qualifying event occurs on the last day of FMLA leave. The maximum coverage period is measured from the date of the qualifying event. If, however, coverage under the GHP is lost at a later date and the plan provides for the extension of the required periods, then the maximum coverage period is measured from the date when coverage is lost. For example, if the last day of FMLA leave is on the 21st of the month but the plan does not terminate coverage until the last day of the month, the last day of the month is the day of the qualifying event. The maximum coverage period is calculated from the last day of the month.

If state or local law requires coverage under a group health plan to be maintained during a leave of absence for a period longer than that required under FMLA (for example, 16 weeks of leave rather than for the 12 weeks required under FMLA), the longer period of time is disregarded for purposes of determining when a qualifying event occurs.

(Not) Paying Premiums

While on FMLA leave, the employee must continue to make any normal contributions to the cost of the premiums. Employers have a few options for handling payment of premiums during unpaid leave; the adopted policy should be documented in the employee handbook and discussed prior to the employee taking FMLA leave, if possible.

An employer’s trap arises if an employee does not pay his or her portion of the premium while out on unpaid FMLA leave. The employer may be tempted to discontinue coverage upon failure of the employee to pay their share. However, this is problematic if the employer cannot guarantee that the employee will be provided the same benefits on the same terms upon returning to work.

The employee’s failure to pay their share of the premiums while on FMLA leave does not create a COBRA qualifying event. Additionally, employers may not condition COBRA continuation coverage on whether the employee reimburses the employer for the premiums the employer paid while the employee was on FMLA leave. Moreover, it is not acceptable for an employer to increase the COBRA premium rate above 102 percent in order to recoup “past premiums due” when the employee was out on FMLA leave.

What happens if an employee experiences a COBRA qualifying event and elects COBRA, after which the employee takes FMLA leave, during which the employee fails to pay the COBRA premiums? Recall that the FMLA requires an employer to reinstate the employee to the same group health benefits after returning from FMLA leave. COBRA, however, is not a group health plan under FMLA. Consequently, an employee’s failure to pay COBRA premiums while on FMLA leave does allow the plan to terminate the employee’s coverage. (Remember, there may be grace periods for late payment or more generous state laws impacting the decision and time to terminate coverage. Be sure those timelines are followed and documented.)

While there is potential for the weary employer to misstep, the intersection of FMLA and COBRA can be handled, so long as it is with care and caution.

For an in-depth look at qualifying events that trigger COBRA, the ACA impact on COBRA, measurement and look-back issues, health FSA carryovers, and reporting on the coverage offered, request UBA’s ACA Advisor, “COBRA and the Affordable Care Act”.

Originally published by www.ubabenefits.com

On October 27, 2016, the Internal Revenue Service (IRS) released Notice 2016-62 announcing cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2017. Many pension plan limitations will not change in 2017 because the increase in the cost-of-living index did not meet the statutory thresholds that trigger their adjustment. Some items, though, will see minor increases. The following is a summary of the limits for 2017.

For 401(k), 403(b), and most 457 plans and the federal government’s Thrift Savings Plans:

  • The elective deferral (contribution) limit remains unchanged at $18,000 for 2017.
  • The catch-up contribution limit for employees aged 50 and over who participate in these plans remains at $6,000 for 2017.

For individual retirement arrangements (IRAs):

  • The limit on annual contributions remains unchanged at $5,500 for 2017.
  • The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000 for 2017.

For simplified employee pension (SEP) IRAs and individual/solo 401(k) plans:

  • Elective deferrals increase to $54,000 for 2017, based on an annual compensation limit of $270,000 (up from the 2016 amounts of $53,000 and $265,000).
  • The minimum compensation that may be required for participation in a SEP remains unchanged at $600 for 2017.

For savings incentive match plan for employees (SIMPLE) IRAs:

  • The contribution limit on SIMPLE IRA retirement accounts remains unchanged at $12,500 for 2017.
  • The SIMPLE catch-up limit remains unchanged at $3,000 for 2017.

For defined benefit plans:

  • The basic limitation on the annual benefits under a defined benefit plan is increased to $215,000 for 2017 (from $210,000 for 2016).

Other changes:

  • Highly compensated and key employee thresholds:
    • The threshold for determining “highly compensated employees” remains unchanged at $120,000 for 2017.
    • The threshold for officers who are “key employees” in a top-heavy plan increases to $175,000 for 2017 (from $170,000 for 2016).
  • Social Security cost of living adjustment: In a separate announcement, the Social Security Administration stated that the taxable wage base will increase to $127,200 for 2017, an increase of $8,700 from the 2016 taxable wage base of $118,500. Thus, the maximum Social Security tax liability will increase for both employees and employers.

Originally published www.thinkhr.com

On October 18, 2016, the Social Security Administration (SSA) announced the maximum amount of earnings that are subject to the Social Security payroll tax will increase in 2017 to $127,200. This adjustment is effective as of January 1, 2017 and equates an $8,700 increase from the maximum for years 2015 and 2016, which was $118,500. According to the SSA, of the estimated 173 million workers who will pay Social Security taxes in 2017, about 12 million will pay more because of the increase in the taxable minimum.

How does Social Security work?

The SSA uses the Social Security taxes that workers pay into the system to pay Social Security benefits and these taxes are based on workers’ earnings, up to a certain amount. As of January 2017, that amount is $127,200.

This adjustment, done annually, is based on the increase in average wages. Subsequently, by January 1 of each year employers must adjust payroll systems to account for the potential for a higher taxable wage (per SSA determination) and if there is an adjustment, impacted employees should be notified of the hit to their paycheck. So for your employees whose compensation exceeds the previous maximum ($118,500), this new amount means they will see a decrease in their take-home pay without an annual raise to account for the larger payroll tax. Keep in mind, Social Security is a retirement benefit but also works toward aiding older Americans, workers who become disabled, and families when a spouse or parent dies.

This increase not only impacts workers, it impacts employers as well because as the employee contributes so does the employer. The Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) tax rate for wages paid in 2017 is set by statute at 6.2 percent, for both employees and employers. So, an individual with wages equal to or larger than $127,200 would contribute $7,886.40 to the OASDI program in 2017, and his or her employer would contribute the same amount (the OASDI tax rate for self-employment income in 2017 is 12.4 percent).

What should an employer do now?

Take the time to adjust your payroll system to support the new dollar amounts, and while assessing your annual budget account for the increased tax amount and the impact on affected employees.

Of note, other adjustments from the SSA that are effective January 2017 are a 0.3 percent cost-of-living adjustment, which increases the monthly Social Security and Supplemental Security Income (SSI) benefits. The 60 million Social Security beneficiaries will see the benefit increase in January 2017 and the 8 million SSI beneficiaries will see the increase on December 30, 2016.

Originally published by www.thinkhr.com

Most employers should be reviewing payroll budgets and job descriptions to ensure that changes to salaries and job classifications are all in order by the December 1 deadline based on the new overtime exempt salary threshold and other final rule changes to the Fair Labor Standards Act (FLSA). Another area that will be impacted by these changes and needs review now is employee benefits.

Review Now

This is the best opportunity to review your company’s eligibility requirements for certain benefits and benefit levels. Some benefit plans may include eligibility requirements based on exempt versus nonexempt status or salary versus hourly status. With the FLSA changes soon approaching, and many companies preparing for their annual open enrollment periods, you may want to use these next few months to review your eligibility requirements and make any necessary changes. These classification changes may unintentionally cause a reduction or loss of certain benefits for some of your employees. Retirement Plans

Retirement Plans

Often, company contributions to retirement savings plans are based on an employee’s salary level. These contributions will increase as you raise salaries or incur additional overtime costs. The costs of short-term disability, long-term disability, and group life insurance plans are frequently based on an employee’s annual earnings; therefore, there may be an increase in these benefits costs as well. Review the eligibility requirements for health and welfare benefits and other fringe benefits offered by your company. Determine if any employees may be impacted and consider whether you will make any changes to those benefit plans.

Affordable Care Act

With regard to the Affordable Care Act (ACA), higher pay may increase the employee threshold for affordability if your company is using the rate of pay or W-2 safe harbor methods to determine health care affordability. Additionally, higher pay may reduce any government-provided health care subsidies that employees may currently be able to receive.

Tracking

Your company’s tracking method for recording hours of service when reviewing your employees’ measurement and stability periods should also be reviewed. Some employers may use different methods for different classes of employees. A change in class for certain employees may impact their measurement and stability period for health care benefit eligibility.

Time Off

Paid time off accruals, paid sick leave accruals, and workplace flexibility will all need to be addressed as you work through these changes. It is extremely important for you to be able to explain the changes to your employees and reinforce the fact that the new overtime law does not negate their importance to the company.

Communicating Changes

Managers should already be talking to employees about these changes and allowing employees to ask questions. Companies need to think about new ways of maintaining the same level of flexibility and autonomy that many of their exempt employees have enjoyed in the past. This may mean thinking of new and different ways of getting the work done that will provide a sense of empowerment and autonomy to the employees. Cross training, work sharing, and fine-tuning processes will allow better efficiencies enabling employees to accomplish more without the need for excessive work hours.

Employee engagement and morale issues are critical concerns as many currently exempt employees, particularly managers, will feel that they have lost their status and prestige. HR professionals and other senior leaders in the organization should be available to have open discussions with these employees to explain the new law and reinforce that this has nothing to do with their overall job performance or level of responsibility. For most, this does not mean a change in job duties; it merely means a change in the recording of hours and method of payment. When managed correctly, employees should not see a reduction in their wages. They should earn approximately the same as or more than their current salary, based on a wage increase, overtime earnings, or adjustment to a comparable hourly wage.

There is no argument that these changes will be significant for many employees. The continued FLSA minimum salary adjustments scheduled to occur every three years will create a new paradigm shift in how exempt and nonexempt employees are viewed. No longer can it be said that all managers are exempt employees, as many will continue to manage employees and also be eligible for overtime. Remember that you can pay your nonexempt employees a salary, but you also must have a method to record their hours worked and you must compensate them for overtime.

These changes are estimated to impact 4.2 million employees across the United States. How you communicate these changes to your employees will help tremendously in preserving a positive morale in your workplace.

Originally published by www.thinkhr.com

By Erica Oh Nataren
www.lifehappens.org

moneybankMany people in their 40s are facing an uncomfortable fact: They simply aren’t where they’d hoped to be financially. Fortunately, all their life experience can help correct for past mistakes.

“There’s a different trigger moment for everybody,” says Jay Howard, financial advisor and partner at MHD Financial in San Antonio, Texas. “But regardless of when it comes, people find themselves looking down the barrel of a gun as they consider retirement.”

One challenge is that it’s impossible to advise 40-somethings based on tidy “life stage” demographics. Some are just starting families, while others are sending offspring to college. They’re married, single, divorced, and just about everything in between.

But for those still grappling with financial instability, these four principles can help in moving forward with confidence:

1. Acknowledge what you’ve done right.
It could be one great decision sandwiched in between some fails, or just a single good habit that can mitigate the impact of a host of wrongs.

Take the example of Kiera Starboard, a 46-year-old controller at a San Diego software firm. A mom to two adult sons and a teenage stepson, she always made having sufficient life insurance—both term and permanent—a priority, the result of her previous training as a financial advisor. “Even if it was tight, I made the payments,” she says. “It was a priority for my family’s sake, and for my own peace of mind.”

Unlike the 40% of Americans who have no life insurance, Starboard was protected when the unthinkable happened last August. Less than two years into her marriage, her husband, Steve, was killed while riding his motorcycle to work—one month after they purchased a small, additional life insurance policy to supplement his employer coverage.

“To have had to deal with financial stress on top of everything else, it would have been unbearable, incapacitating,” says Starboard. “My stepson and I are certainly in a much better position today than we would have been, had Steve and I not followed the advice I used to give to others.”

2. Take action to shore up the decades ahead.
For many, the hardest part can be learning to put your own long-term future first—sometimes for the first time in your life.

“I see people focusing on their kids’ college savings, and not enough on retirement or an emergency fund for themselves,” says Starboard. Many advisors point out that kids can borrow for college if necessary, but no one can borrow for retirement.

The most important step is clear, says Howard: “You must have a written financial plan, period. Because that plan will dictate what you must do to be successful for the entirely of your life.

“The financial plan is your road map,” he continues. “In it will be your portfolio requirements, your savings goals, and your insurance-related needs.”

Finally, make sure your plan takes inflation into account, commonly estimated at 3% a year. Says Howard, “Inflation is the silent assassin that eats away at your nest egg.”

3. Apply the hard-fought wisdom you’ve gained.
“Treat the numbers determined by your plan—such as monthly savings—as bills that need to be paid,” advises Howard. When money comes in, it’s easy to start thinking of a new kitchen or a trip to Tulum. “Just be patient and keep the bills paid.”

Using that wisdom also applies to the big stuff. As the executor to her husband’s estate, Starboard has held back making any major decisions. “In a prior loss, I committed to real estate transactions and other things prematurely. At the time, it really felt like the right thing to do but my grief clouded my perception. I had a painful, expensive learning lesson.”

4. Focus on your shining future—really.
Forward thinking is an essential part of your financial plan, says Howard. “Get help really envisioning what kind of retirement you want. For each aspect, really drill down. For instance, where do you want to live? Do you want to be near your grandkids? Will you have the money to go see them? How often? It’s not just financial planning, it’s life planning.”

If all that forward thinking feels presumptuous, Howard recalls the eminently quotable Yogi Berra, who once said, “If you don’t know where you’re going, you might not get there.”

And finally, remember the simple refrain: it’s never too late.

Read more here …

By Kathy Binkley, RHU, ChHC
Benefit Advisor at The Wilson Agency
A UBA Partner Firm

healthcareI’m sure you’ve heard the phrase “Nothing in life is free,” and nothing is – not even Medicare. In most cases, you won’t have to pay a premium to get Medicare, at least for Part A (here’s a refresher on the different parts of Medicare), but that doesn’t mean it’s free. You’ve just pre-paid in the form of taxes. So you don’t have to worry about a premium for Part A, which covers in-patient hospital expenses, assuming you or your spouse paid Social Security for at least 10 years. However, there are other costs associated with Medicare, which vary depending on the specific insurance. Here are the costs for 2015.

Part A (Hospital Insurance):
$1,260 deductible (each benefit period)
$315 copay (per day) days 61 through 90 at the hospital
$630 copay (per day) days 91 through 150 at the hospital

Part B (Medical Insurance):
Monthly premium: $104.90
Deductible: $147
Cost Sharing: $20, varies

Part D (Prescription Drug Coverage):
Part D is also subject to a premium, which varies by plan and income. Additionally, prescriptions are subject to copayment or coinsurance and a deductible (if the plan has one).

Penalties:
There is a seven-month initial enrollment period for signing up for Part A and B. If you do not enroll during this time period and do not have creditable health coverage (such as an employer group health plan), you could be responsible for a paying a penalty.

Medigap:
Take another look at the prices for Part A. Can you imagine what you could end up paying for a long-term hospital stay? Medigap plans are additional insurance to help cover costs that Medicare doesn’t cover, such as copayments, coinsurance and deductibles. However, Medigap insurance requires an additional premium be paid.

Needless to say, even with Medicare the costs can be catastrophic. This is why we can’t emphasize enough how important it is that you save enough money for retirement. However, we understand that in many situations people are unable or unaware of the exorbitant health care costs they will face in retirement, so here is an article that discusses additional ways that retirees can tame those health care costs.

UBA resource

Under federal regulations, Medicare is a secondary payer for many individuals who have an employer group health plan available to them, either as an employee or the dependent spouse or child of the employee. Read the answers to thirteen key questions about Medicare Secondary Payer rules including who is affected, what coverage must be offered to Medicare-eligible employees, whether Medicare premiums can be reimbursed, and more.

Read More …

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- Securities Broker in San Francisco, CA

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