October 31, 2016

Expect lower portfolio returns in the future

"There is a 0% chance of getting a 5% annualized return over the next 10 years in a balanced fund of 60% stocks and 40% bonds, according to a report from Research Affiliates. Target-date funds have only a slightly better chance, with a target-date fund with 10 years to retirement having only a 6% chance of achieving 5% a year, the report found."  Suzanne Woolley summarizes the study results in

"The Next 10 Years Will Be Ugly for Your 401(k)" available at: http://www.bloomberg.com/news/articles/2016-10-26/the-next-10-years-will-be-ugly-for-your-401-k

What Happens to Your Credit Card Debt After You Die?

"When examining a loved one's credit cards, it's crucial to know whose names were associated with the account. If there was only one name on the credit card account – that of the deceased – the debt may belong only to that person," according to Matt Schulz writing for USNWR. "When you die, your estate – all of the money and property you owned – typically pays off the balance. If there's not enough money in your estate to pay your debts, your creditors may just be out of luck. Your kids and your family typically can't inherit your debts, and the banks can't make someone else pay them."
But things get complicated in community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Couples in Alaska can opt-in) where assets and debts acquired during marriage are 'owned" equally by both spouses. Get the details at: money.usnews.com/money/blogs/my-money/articles/2016-10-24/what-happens-to-your-credit-card-debt-after-you-die

Utah, Nevada & Virginia 529 College Savings Plans rated Gold by Morningstar

Only three state 529 plans that offer tax-advantaged savings plans for children and adults  received the highest rating from Morningstar. Check out UESP.org for more details on Utah's perennially top-rated plan. Most adults don't realize that they can save for their own education through a 529 plan.

Medicare Demystified book

I strongly recommend the book Medicare Demystified (2014) by Ronald Kahan, MD for both Medicare eligible adults and their adult children who may be helping them navigate their choices. As a recent Medicare participant, I had read a lot of info on the internet and yet was still quite overwhelmed by my options. Finally I search online for "Medicare" + "insurance" and "Logan, UT" where I found an insurance company that provides detailed guidance on choosing a plan. My husband and I met with the insurance agent and learned a lot in the process. We were able to make a choice between traditional Medicare + Part D (drugs) + Medigap policy versus an all in one Medicare Advantage Plan. Insurance agents are paid commissions by the insurance companies selling Medigap policies so there was no cost to us.
I would have been in a better position to make a well-educated choice if I had found Kahan's book first. (Thanks to my brother-in-law Tom who lent me the book). I don't recommend trying to read the book cover to cover in a few short sittings. I was able to follow the information since I had just been through the process. But I also learned new facts that are critical once one faces medical procedures and costs. So far I've just paid my monthly premiums.
Kahan does an admirable job of describing a complex system, ending each chapter with "Key Points" and "Bottom-line Recommendations." Chapter 7 "An outline for Decision-Making" is especially valuable to the first time enrollee. Part two: "Using your Medicare Plan" is the section you will likely refer to repeatedly in the future.
The book will be a valuable addition to my personal library as we encounter the need for medical procedures and payments. Although one can switch from traditional Medicare to Medicare Advantage plans during the annual enrollment period. You can switch between the two plans and within Medigap and Advantage plans during the annual enrollment period.
There are lots of misconceptions and misinformation bandied about regarding Medicare. Having incomplete or incorrect information can be very costly! So buy this book and refer to it as needed. Children of older parents: buy the book, read it to make sure your parents don't miss sign up deadlines and Help them navigate a complex program as they age and need more guidance.

October 28, 2016

Parents Pass (Bad) Money Habits to Kids

"Parents signal their attitudes about money, either through purposeful and explicit messages or in unconscious ways.  Meanwhile, children learn the behaviors that take them into adulthood by observing what parents do.  These observations can override financial knowledge in shaping behavior." The Squared Away Blog features a research summary by Dr. Sonya Britt, a certified financial planner and associate professor at Kansas State University, who explains some of the parent-child dynamics that affect money management behaviors. Check it out to see how you are affecting your children or were/are affected by your parents at: http://squaredawayblog.bc.edu/squared-away/parents-pass-bad-money-habits-to-kids/

How to Save for Retirement When You're Self-Employed

Writer Abby Hayes explains the importance of starting early to invest for retirement and the options available for the self-employed. Whether self-employment is your only source of income or a supplement to a job, learn about the options and get started today. See: http://money.usnews.com/money/blogs/on-retirement/articles/2016-10-26/how-to-save-for-retirement-when-youre-self-employed

Considering a Reverse Mortgage?

If you are considering a reverse mortgage to help finance retirement, information on the newest programs and government regulations are available in a book by renowned retirement researcher, Wade Pfau: "Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement."

October 27, 2016

Podcast: Is It Time to Rebalance Your Portfolio?

Market performance can alter the relative values of the asset classes you hold in your portfolio. If it's been a while since you've rebalanced your portfolio, now may be a good time to consider doing it. Listen to the podcast (5 min. 55 sec): http://www.finra.org/investors/podcasts/time-to-rebalance-portfolio?utm_source=MM&utm_medium=email&utm_campaign=Investor%5FNews%5F102716%5FFINAL

Cyber Security is important!

October is Cyber Security Awareness Month, so it's a great time to make sure you—and your family—are staying safe online. Check out the resources at StaySafeOnline.org for tips on keeping a "clean machine" and protecting your personal information, as well as tips for parents and how to protect your mobile devices. 

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