June 23, 2015

Estate Planning for Digital Assets

Bet you never thought about what would happen to your email, Facebook, Twitter, and other digital accounts after your death. Well, here's one more thing to add to your estate planning. Check out Consumer Action's Digital Estate Planning Guide at http://www.consumer-action.org/downloads/english/spring_2015_digital_estate_planning.pdf

June 11, 2015

Make your money last as long as you do

While there are a variety of strategies for spending down retirement investments to try to last for a lifetime, the only sure way to accomplish this is through the purchase of single payment life annuities (SPIAs). Lewis Mandell, Ph.D. explains why annuities are ideal for accomplishing this task in his book "What to do when I get stupid: A radically safe approach to a difficult financial era." See: http://lewismandell.com/. At the same time that our ability to make prudent financial decisions declines with age (after peaking at age 53 and really declining after age 70), confidence in our abilities actually increases! This is a scary combination well documented by extensive research. "The two major questions posed in the book ask how we can generate sufficient guaranteed real income to last the rest of our lives, not matter how long we live and what are the best ways to protect our lifetime income against possible irrational decisions of our future selves" (p. 152). This is a MUST READ for everyone approaching or in retirement AND for their children. I've heard too many stories of how elderly parents were taken advantage of by financial professionals with dubious interests, and by outright fraudsters, draining assets meant for heirs and leaving the adult children to support their parents.

How Utah Became a Bizarre, Blissful Epicenter for Get-Rich-Quick Schemes

Considering multi-level marketing... or just curious as to why Utah County is the epicenter of MLM? Read this fascinating account of a journalist's exploration of Utah MLM. "It’s early May and I’m at a Marriott hotel in Salt Lake City for a conference of Q Sciences, the company that sells EMPowerplus Q96. Here, everyone but me is a salesperson, which means these testimonials are also pitches. Q Sciences is a multi-level marketing company, selling not in stores but through regular people, who earn commission from selling products as well as recruiting others to do the same. This last bit makes multi-level marketing unique—and controversial. Trying to wrap your head around the concept of selling a business opportunity to sell a business opportunity to sell a business opportunity can feel like being lost in a hall of mirrors (after ingesting grainy, off-white powder). It’s profitable: The industry’s biggest players, like Amway, Mary Kay and Herbalife, each bring in upwards of $4 billion per year, according to Direct Selling News, a trade publication. To figure out how much the workers make, head back to the hall of mirrors. Tales of newly-minted millionaires circulate like cash, as do stories of people who’ve lost fatal amounts of it. Money is only part of why one joins, though: Here in the Utah Valley, distributors preach a gospel of mind-body wellness, founded on healthy supplements and spiritual growth. These suburban towns nestled at the foot of the Rockies are the epicenter of a global industry worth $183 billion. Depending on who you ask, this industry is either a bastion of American innovation or a scam of epic proportions, the Giza of pyramid schemes. Meanwhile, facts that might help you decide which one it is—such as whether distributors earn or lose money, and how much—are difficult to pin down." Read "How Utah Became a Bizarre, Blissful Epicenter for Get-Rich-Quick Schemes" by Alice Hines at: http://talkingpointsmemo.com/theslice/mormon-utah-valley-multilevel-marketing-thrive-doterra

June 10, 2015

Single female boomers are happier, healthier and more confident

It's great to read some good news about single women.

"Over half of unmarried female baby boomers plan to stick with their job for at least five years, according to a survey by Del Webb. "We've seen that single female boomers are happier, healthier and more confident than ever, and our survey results show that those who are still working aren't rushing to retire," Division President Lindy Oliva said." Read details at: http://www.thinkadvisor.com/2015/06/09/forget-retirement-older-single-women-love-their-jo

June 9, 2015

What small changes can you make to build your retirement security?

"What would you be willing to sacrifice to get a bigger nest egg for retirement? Seven in 10 workers — 69% — say they know they can save $25 or more per week than they currently save, according to data from the Employee Benefit Research Institute (EBRI). That would turbocharge their retirement planning." BY , INVESTOR'S BUSINESS DAILY
"What would they give up to get that $25 or more a week?
Almost half — 46% — told the EBRI that they would be willing to kiss off dining out or takeout food.
Here's what others would be willing to sacrifice:
•13% would give up soft drinks or snacks from vending machines.
•12% would forego movies, videos, DVDs or online streaming.
•11% would drop coffee from specialty shops.
•8% would cut back on lottery tickets.
So why aren't workers already cutting back on expenditures to save more?
Half — 50% — say they simply can't afford to give up anything. They need everything they're already spending money on.
Other reasons the workers cited:
•11% said they are out of work or underemployed.
•8% blamed education expenses for their inability to cut spending.
•7% said they spend every spare dollar to pay off non-mortgage debt.
•5% said all of their spare money goes to paying off their mortgage or other housing expenses.
One in 10 workers said they already are saving enough or can save enough without sacrificing anything.
And 6% said they haven't thought about it."
What about YOU?

Trouble Repaying Student Loan Debt?

“Student loan servicing practices may be adding to the stress of repaying your debt by creating roadblocks like payment processing problems, servicing transfer snags, or breakdowns in communications. That’s why the Consumer Financial Protection Bureau has launched an inquiry into student loan servicing and hope that you will share your #StudentDebtStress story. The CFPB wants to hear about your experience with your student loan servicer. Your stories will help us better understand and address #StudentDebtStress. 
If you have questions about repaying student loans, check out the CFPB’s Repay Student Debt feature to find out how you can tackle your student loan debt.

May 29, 2015

Who needs life insurance? Advice to young adults

As long as you each are able to support yourselves and you have no kids (and no mortgage) you don't need life insurance. Very few young adults become uninsurable. Note that one company might deny coverage while another company will sell the same person a policy. See: http://wealthpilgrim.com/who-should-buy-guaranteed-issue-life-insurance-a-surprising-answer/ (note the author is a certified financial planner which lends credibility).
How do I guarantee future insurability with a term policy? http://www.fool.com/insurancecenter/life/life08.htm
What factors might supplement replacement income? http://www.fool.com/insurancecenter/life/life03.htm
Note the important role Social Security plays in replacing income. Early in my career I had a student who was a widow with 4 kids under the age of 6. Her husband was killed in a vehicle accident when they had 2 toddlers and she was pregnant with twins! They had no life insurance. Luckily he had worked long enough to be covered by SS so she and the kids received SS survivors’ benefits. Very few insurance sales people will even mention SS Survivors' benefits as part of the process of deciding if you need insurance and, if so, how much.
SS Survivors Benefits http://www.socialsecurity.gov/pubs/EN-05-10084.pdf  "The younger you are, the fewer years you need to work. But no one needs more than 10 years of work to be eligible for any Social Security benefit. Under a special rule, if you have worked for only one and one-half years in the three years just before your death, benefits can be paid to your children and your spouse who is caring for the children." Each of you should set up an online Social Security account: http://ssa.gov/myaccount/
If you decide to buy life insurance read:
Life Insurance Buyer's Guide (but note the publisher is the industry) http://www.naic.org/documents/consumer_guide_life.pdf
New York State Life insurance consumer info: http://www.dfs.ny.gov/consumer/clife.htm
Do either of you have life insurance as an employee benefit? Sometimes you may have 1x your annual salary in insurance as a free benefit. Can you buy cheap life insurance as an employee benefit? By buying through your employer you are part of a group plan which does not require a health check (or only if you want to buy a really high amount of coverage).
Also consider that the surviving spouse would be the beneficiary of retirement accounts and other assets.
If you had a mortgage that you need both incomes to pay and want to be sure the surviving spouse could afford the mortgage if one of you died, then you might want to buy term life insurance policies.
Life insurance salespeople use scare tactics to try to sell guaranteed renewable whole life insurance because they earn much higher commissions on whole life policies than on term policies, not only when they first sell you the policy but for years afterwards if you keep paying premiums. So the sales person will really push whole life. 
You might be better off funding Roth IRAs.
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