Expected Contingency: 4 guidelines for women looking into planning their retirement

Women, on average, live longer than men—this is a plain truth (http://ti.me/8T7Ll),  a fact that must be taken into consideration when planning for retirement.  Running out of retirement funds partway through is not only a risk, it’s an unfortunate reality for many women who’ve outlasted their investments. With this in mind, here are a few general guidelines for women looking into planning their retirement.


1. Start early.

Not only is there still a distinct wage gap between female and male earners, women are also faced with the fact that, in all likelihood, they will end up with a good bit of extra time that they will be needing those retirement funds. This makes it an absolute imperative to start planning for retirement early in order to counteract these two factors working in tandem.


2. Plan for extra time.

As noted in the first point, women are still anticipated to outlast men by a good margin, about 5 to 10 years. Many in the younger generations can expect that to remain, alongside the average age increasing due to advancements in technologies. While planning for a retirement portfolio that will last forever is out of the reach of most, being realistic about longevity is extremely important, and making a conservative estimate may leave you in dire straits down the road. Plan for longevity.


3. Know your caregiver options.

Women with male partners will likely outlast their significant other.  While they will be there to administer care, unfortunately they afterwards find themselves bereft of any similar assistance themselves. Having a caregiver plan will help you sail smoothly throughout the entirety of your retirement and ensure that you have a helping hand as you age.


4. Know your personal risks.

There are a lot of statistics floating around about longevity, but statistics and averages are just that.  As individuals they’re helpful as general guidelines, but are completely ineffective as rules. Knowing not only your family’s medical history and risks associated (or lack of risks which may contribute to a greatly extended retirement) but also knowing your own financial tendencies, will help you get a better grasp on how to manage your money and what factors you should alert your financial advisor of when making a long-term retirement plan.

Extended life shouldn’t have to be something you look at as a downside. Taking steps in the immediate future to ensure that you won’t be too strongly impacted by the unique problems you’ll encounter as a woman facing retirement, will help you make the most of those extra years.
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A Brief History of Money

As credit and debit cards gradually take over the sphere of purchasing, money becomes less and less a physical thing. Whereas a decade ago satirists were drawing images of moguls swimming in a sea of bills, this satire is shifting to illustrate these same moguls now depositing checks with too many zeroes into overseas bank accounts. Even in our personal lives, carrying cash rarely has many applications—cards are accepted everywhere, and even when they aren’t there’s almost always an ATM within reach. But as we become more disconnected from our understanding of what is actually signified by our bank balance, by our available funds, it becomes important to reminisce on what the dollar physically is.
American currency has undergone a few major shifts. In the last decade, we’ve seen changes to the $5, $10 and $20 bills up to $100 bills, shifting from using the classic $1 style to a purplish numbering and much larger numerals—in many instances as an attempt to keep up with current counterfeiting technology. Printed money is painstakingly constructed, both for design and in an effort to make it harder to duplicate the process. This effort starts with engraving the plates, which are used for the intaglio printing onto the linen-cotton composite bills. Each bill is stamped with a force of around 10,000 psi, which is responsible for generating the raised texture of the ink.
Classically, what we understand as dollar bills used to be referred to as bank notes. They originated as a promissory note from banks to pay the bearer in coins, but as currencies shifted and inflation began working on a global scale, they soon became currency in their own right. This is where the shift from bills being produced by the banks themselves to being produced by, in many countries, a nationally appointed ‘central bank’ took place, gradually accepting them as indicators of a nation’s currency. Currently, these bills are printed at the Bureau of Engraving and Printing.
Coins go back much further, intended as a form of currency with a physical form that directly correlated to its value. This value of coins is known as their ‘melt value’, how much the coin is actually worth from a use standpoint when the metal is melted down and used for practical purposes. As inflation continued over centuries, this gradually became more and more obsolete, but coins maintain this intrinsic quality regardless.
It’s easy to lose track of spending when you aren’t handing over the coins and bills yourself. Without something physical and tangible to associate your wages and payments with, it becomes much easier to give. Keep in mind just what you’re paying with every time you use your card, regardless of where that actual, physical money may be.
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Long Term Care Insurance: The Basics

Life expectancies have exploded over the last 50 years, and for most couples, at least one spouse will survive until age 90 or older. Yet along with age comes a variety of maladies — everything from diabetes and high blood pressure to broken hips or dementia. Oftentimes, these types of illnesses and accidents require health care expenses in addition to the expense of long-term assisted or living care, but how do you know whether you should purchase a long term care insurance (LTCI) plan to complement your retirement plan?
According to the National Association of Insurance Commissioners (NAIC), before making this decision, ask yourself these questions:


  • Do you have assets you’d like to protect?
  • Do you need to ensure your nest egg remains untouched and unbroken?

If you answered “yes” to these questions, then long term care insurance is worth discussing with your agent or advisor.


  • Is your Social Security your only source of income?
  • Will you soon or already be eligible for Medicaid?
  • Are your retirement assets negligent?

If you answered “yes” to these questions, then you probably won’t need long term care insurance, but you should discuss it with your agent anyway.
Before meeting with your insurance agent or advisor, it will be helpful to review the NAIC’s Ten Tips Regarding Long Term Care Insurance:


  1. First things first: Long term care is not ideal for everyone. As mentioned above, if you have little to no retirement savings and are currently receiving Social Security payments, you most likely could not afford the additional expense. For these reasons, you should qualify for state assistance, which supersedes the need for LTCI.


  3. Be certain you understand what is typically covered under an LTCI policy, and conversely, what is not covered with long term care insurance. Don’t ever hesitate to pose questions to your agent or advisor or to the carriers that offer this coverage.


  5. Ask for guidance from your retirement planner or insurance agent on determining if LTCI is appropriate for your individual situation. If he or she agrees, ask for help budgeting it in your lifestyle, and also ask them to provide you with a list of LTCI companies they work with so you can do some independent research.


  7. If you don’t want to become a burden to your loved ones (both from a financial and caregiving point of view), then LTCI is certainly worth investigating. This is also true if you’d like to have more control over which type of facility you’ll receive care.


  9. Check in with a variety of companies before committing to a sale. In addition to asking each carrier about their rate-raising history, the NAIC also recommends that you do a comparison that considers:

  • Benefits

  • Coverage limits

  • Covered facilities

  • Insurer ratings (from A.M. Best or Moody’s)

  • What is and what is not covered by your premium You’ll also want to investigate the strength and reputation of each company, and that they possess the correct licenses to offer this product. Contact your state insurance department to verify your findings or to dig deeper into a company about which you have questions.


  1. Learn to watch the rates. Start by checking with the state insurance department to see how your state regulates premium increases among LTCI providers, and then conduct a bit of research n the major carriers you’re considering and evaluate their respective histories of raising rates for this coverage.


  3. Try to avoid solely relying on Medicare or Medicaid to pick up the tab for you long term care. While Medicare pays for a small amount of certain nursing home costs, if you want to qualify for Medicaid — as Medicaid does cover long term care, albeit in a typically-less-than desirable home — you’ll need to spend down your assets until you reach the poverty line to qualify.


  5. Many long term care insurers, just as with medical insurers, will choose not to cover preexisting conditions. Before you begin developing the difficulties often associated with older age, it’s a good  idea to buy LTCI as young as possible, ideally around age 50. The NAIC also warns that many LTC insurers use age 60 as an automatic trigger to increase your rates, so be sure to check on those rules, too.


  7. Remember that if you purchase a qualified long term care insurance policy, your premiums will receive tax breaks, and furthermore, the benefit payments are also tax-free.


  9. When you purchase LTCI, the insuring company should send you your policy. Be sure to read this policy carefully and make certain you understand its contents in their entirety. You may also elect to add an inflation protection option to your policy. This option periodically increases your benefits levels without you having first to provide evidence of insurability.

The decision to purchase a long term care policy is one that should not be entered into lightly. This is why working with a reputable agent or advisor who represents quality insurance carriers is so important. But these tips offered by the NAIC should get you started thinking about your LTCI needs and desires — and whether it fits into your retirement plan. Read through all the above tips, give them some good thought, and then take this list with you when you meet with an advisor or agent.


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Mortgage Matters: The Streamlined Modification Initiative

In spite of a decade characterized by nearly every housing catastrophe possible under the sun becoming a reality, the Federal Government is giving their replenishment efforts another powerful go with the “Streamlined Modification Initiative”. Going into effect on July 1st, the initiative itself will allow “eligible borrowers who are at least 90 days delinquent on their mortgage an easy way to lower their monthly payments and modify their mortgage without requiring financial or hardship documentation” (http://1.usa.gov/Yf9oA5). The biggest impact of this will be helping slightly disadvantaged borrowers maintain their status of home ownership, while similarly extending the life of their payments.
The effects of this are manifold, but most obviously it’s a means of ensuring that there will still be money flowing into housing, rather than mortgages becoming so stagnant that the market collapses in on itself again. While the initiative stipulates that borrowers will be extending the life of their debt to 40 years, that’s 40 years where the lenders are likely to be getting their money back from their borrowers, opposed to 30 years with a higher risk of defaults. This also means that the borrowers themselves aren’t going to have that extra spending or investing agency until an extra decade passes from their time of initial mortgaging. While the long-term effects of this on consumer spending and the economy is still unknown, in the short run it’s an attempt to simply make homeownership a less tenuous position for many families.
This is, ultimately, an initiative acting as a double-edged sword. There’s talk on both sides of the fence about this being the swan song for the traditional 30-year mortgage, and whether or not that’s a good thing. It’s good in that it’s an attempt to make up for the fact that families are having a harder time staying afloat (http://huff.to/V1Zled) and are finding themselves with less purchasing power than ever before. This problem coupled with the incoming generation expected to take over the reins of the economy struggling under a $1.1 trillion student debt burden (http://nyti.ms/12ia08t) and finding themselves, as a result, less likely to invest in much of anything other than keeping food on their table (fewer cars, fewer homes, fewer marriages, and little to no savings) this is, in the short term, something that seems to be somewhat necessary. As with any major piece of legislation governing such a large financial sector, keeping an eye on both how well this initiative works and how likely it is to continue past its August 1st, 2015 termination date will help you make smarter decisions for yourself, your finances, and your family.
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Lessons for College Kids: Three Lessons to give your children before college

One of the most stressful moments of a parent’s life is letting go, allowing your children to walk on their own two feet and hoping they don’t stumble and fall. This is true for all stages, from their first steps to their first bike ride, from their first time driving to their move out of the house into college. Yet the move to college comes with a level of financial freedom that the other stages rarely, if ever, experience, and it’s important to equip your children with the knowledge and tools they need to make the most of their finances once they don’t have their parents to rely on for groceries and other necessities. Here are a few ways to teach them the value of their money, and a few general things kids should know about before leaving the nest for school or work.


1.  Credit Cards aren’t free money.


Racking up credit card debt is easy for a fresh face who’s just starting to experience purchasing freedom. It becomes easy for students recently enrolled to overestimate (and underestimate) all that they’ll need to thrive in their new environment, and even easier to end up spending more money on food and fun than they otherwise should. Teaching your children the goals and benefits of credit (improving your credit score, expanding your line of credit) as well as the pitfalls one can encounter when using a credit card (crippling, unexpected debt) is important for ensuring their financial freedom well into the future.


2.  Work experience is also finance experience.


The moment a new worker gets their first paycheck is always a particularly special one, in that it teaches them both the value of their labor and just how easy it is to burn through the paycheck and have to wait two weeks to a month for the next one. Providing your children with small examples of hourly efforts and what those efforts translate into can help diminish the shock that comes with realizing just how much their work is worth once they actually find a job. Working through college can also help with this, but making sure your children know how to translate the money they spend into the effort it’ll take to recoup it is an important lesson.


3.  Budget!


Nobody likes budgeting right away. It’s daunting to try to figure out how you’ll be spending your money on a weekly to monthly basis. But like all good habits, if started early, teaching your future college student how to effectively budget their finances will provide them with a skill that will help them for the rest of their lives. Give them small budgets at first, let them join you in budgeting groceries, and encourage them to start budgeting when away at school and they’ll be finance-savvy in no time.


Giving your child the right skills for managing their money is both important and overlooked in a lot of families sending their children off to college. Being financially responsible is a full-time job, and the more work experience they get in earlier, the better they’ll be at it later in life. Make sure to make your children aware of when it is and when it isn’t appropriate to use credit, give them a bit of work experience to teach them the value of their money, and most importantly of all teach them how to budget themselves and they’ll be on a solid path to financial freedom.



The Internet Sales Tax: What to look out for.

May 6th has come and gone, and with it the passage of the internet sales tax through the US Senate. Getting an idea of how your investments may be affected by its passage is critical, particularly if you invest in companies with a distinct online retail element. It’s not too late to take a look and make some adjustments. The bill itself is a proposal to institute an across-the-board tax on all online sales for online retailers as a means of better regulating online sales and bringing retailers such as Amazon, back in line with their physical-store competitors who have been paying taxes on all their sales, while internet retail giants haven’t been shelling out anything of the sort since their inception.


This will also affect smaller businesses as well; the cutoff having been set at $1 million in gross margin, but many of the smallest businesses affected won’t be trading publicly regardless. Rather, the most distinct players will be the online retail giants, as well as big-box stores in the short-term future.  Keep an eye out for physical retailers such as Best Buy (who have been jokingly known for quite some time now as, “Amazon’s showroom”) playing a bit harder with some of their more expensive items. While companies such as Amazon and Wal-Mart have been proponents of this proposal, they’ll also be among those hit the hardest by it, though more often than not they have the funds to spare. Where it seems like it will be damaging in the short-term, it will hardly cause too much of a stir—rather, keeping an eye out for speculators and their impacts on the stock prices will be the larger factor. The most likely effect if this bill passes through the House, is driving prices up for smaller retailers who may let go of some of their more expensive merchandise, and thereby driving more customers to the larger retailers who can take the extra hit and who may end up with a better overall outlook.


While the internet sales tax may cause a bit of a dip in the short term for publicly traded online retailers, what this effectively accomplishes in the arena of the internet marketplace is, while hardly negligible, minimal. It’s not only important to know when to buy and when to sell, it’s also utterly imperative that you have an idea of when your stocks may be taking a temporary—or prolonged—dip, and how those factors will continue to affect their business well into the future. If your portfolio or your business has been hit by this, get in touch with an advisor or financial consultant to ensure that you’ll be able to not only keep your head above water, but to keep turning a steady profit.


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In The Wake of Austerity: One month and counting.

Between the fiscal cliff at the beginning of the year and the automatic budget cuts at the beginning of March, the United States has been making a lot of steps to try and reduce the deficit in the form of implementing far-reaching budget reforms. The effects of March’s budget cuts haven’t been fully felt yet, and we’ll probably still be feeling them for years to come as new problems arise.


The economy is reacting, as any economy would, to the sweeping changes, and while many economists feared that the wounds of the last few years of recession were still too fresh for the economy to handle such widespread budget reform, the U.S. has weathered the first month, though with a few distinct slowdowns in hiring. (http://econ.st/14JO6hC) Government hiring went down by about 7,000 expected for the month, alongside retail and construction/manufacturing jobs reporting significant drops in hiring rates. This coupled with the recent news that unemployment similarly fell, but fell because the eligible workforce was shrinking rather than from increased hiring from employers means the growth we’ve been seeing over the last year is going to be hitting a major speed bump. (http://n.pr/XuvQa0)


If nothing else, these effects can be looked at not as the end but a new beginning—the government is doing its best to get its deficit back under control, and while a number of important programs and jobs were sacrificed in order to do so, the only real way forward from here is a tentative upward trajectory. The hardest part is over with, and while we’re only a month out of the freshly-budgeted March 2013, there hasn’t been any drastic shifts for the worse. While growth has slowed, the economy is still technically growing, and with the government running more efficient than ever, once the growing pains are over with many economists are anticipating a much stronger economy for the rest of the year.


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Story by Numbers: Lessons to be gained from the latest unemployment poll

By all accounts, the fact that unemployment numbers are at their lowest in four years should be cause for celebration—with an unemployment at 7.6%, we’re led to infer that means there are more people with jobs, an implication built into the words and numbers. But the numbers aren’t everything, and they can easily present an optimistic view that, at its source, doesn’t actually signify an improvement in the economy. Rather, particularly in this case, these numbers instead highlight the fact that more people are leaving the workforce entirely, effectively not looking for work anymore, unemployment decreasing alongside employer hiring. (http://bloom.bg/ZkN3Ea)


This is no reason to panic of course, the economy has been growing slowly for the last few years and this is hardly a major shift off course. What’s more important to gleam from it is the lesson that the numbers aren’t always what matter the most, whether they are percentages meant to illustrate how well the economy is doing or how the stock market is faring or are simply financial goals as you plan for the future. Just as in this situation, where a number that we expect to be a good omen isn’t necessarily so, it’s always important to have an understanding of exactly what the numbers you’re working with will translate into in real goods and effects.


Whenever working with money and planning for future finances, it’s always a valuable exercise to attempt to understand and plan out just what that money you’re saving up will turn into once you have it; if you have a financial goal, know what it is you’re going to be putting that money towards. Doing so will make it easier to make assessments of how close you are to getting what you need from your financial portfolio, and it similarly acts as a means of focusing your buying power towards towards your long-term goals and any necessities, rather than allowing the money to fall prey to impulses. Much like with unemployment, recklessly hurdling towards an abstract goal will often cause some things to fall by the wayside, and you may run into some unintended consequences that you completely overlook because all of your focus is on whether or not you’re at the place financially (or otherwise) that you want to be.

Numbers are just that—twice removed from the reality of goods, properties, and services, they’re meant to allow us to keep track of our finances more easily. But as with any additional layer of complexity, it can at times be easier to see them and want more for the sake of more, rather than more for the sake of a tangible return. Even if you’re just looking to establish some financial security, giving yourself goals and making sure to approach not only the numbers but the realities of your finances critically will ensure that your money gets you where you need to go.
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