December 26, 2018

How much are you paying your financial advisor? How much are they earning in commissions?

Now that the Trump administration has nixed the fiduciary standard which would have required financial advisors to hold the best interests of their retirement clients above their own pocketbooks. The Obama administration's Labor Department had proposed a rule that financial sales people/brokers/advisors who deal with retirement accounts and clients would have to follow a fiduciary standard whereby they would have to act in their client's best interests rather than selling the client a financial product that produced the highest commission.  Well forget that! Unless you work with a certified financial planner (CFP) or other professional who follows a fiduciary standard don't trust your "advisor" to do what is in your best interest.
Currently the Securities and Exchange Commission (SEC) chair is proposing a new ruling to protect consumers that would require brokers to disclose their sales incentives, sales contests and commissions.
"Most brokerage firms pay their employees more for selling certain products over others, depending on how lucrative they are. This can result in customers paying more for products and services than they need to, though brokers defend the practice as the only way to reasonably offer a range of investment options." ("Brokers fight to keep pay perks, by Gabriel T. Rubin. The Wall Street Journal, 12/26/18 p. B1.

December 20, 2018

Widow(er)s get help for the IRS

Widow(er)s are eligible to file a joint income tax return with your deceased spouse for the year the death occurred (assuming you have not remarried). Also, for the next two years, you may be eligible for special benefits as a "qualifying widower" See IRS Publication 501 for details.
Click on the Publication 501 link in the website to get a PDF. It says it's for filing 2017 returns but the website indicates there are no recent changes. See page 9 of the PDF for "Qualifying Widower" status.
"This filing status entitles you to use joint return tax rates and the highest standard deduction amount (if you don't itemize deductions) for the two years following the year of spouse's death.

So you can file a joint return for the year the death occurred and then use "qualifying widower" status for the following two years.

Difference Between Socially Responsible Investing (SRI) and Environmental, Social and Governance (ESG) Investing

Samual Adams, writing for Advisor Perspectives (12/17/18), explains the difference between SRI and ESG:

"SRI was originally developed to allow investors to avoid companies they disliked for ethical or values-based reasons. This original form of SRI is now called “exclusions” or “negative-screen” investing. Other SRI strategies have been developed, including positive screen or thematic investing, where only companies aligned to the investors’ values are bought. More recently, impact investing has become popular; here investors provide capital to innovative companies working to solve social problems like endemic unemployment or recidivism." SRI is also known as: "sustainable, responsible and impact investing."

 Check out the online article for a helpful infographic that distinguishes between ESG, SRI and impact strategies. "Both conventional and ESG strategies aim to maximize financial return for the risk taken. They put financial return first, before any other issues are addressed. The values-driven' categories... include strategies that consider financial return after the investors' values have been satisfied."

ESG strategies focus on the inclusion of environmental, social and governance risks and opportunities into traditional financial analysis . "ESG is about economic value. SRI is an attempt to incorporate ethics and social concerns into portfolios. SRI is about individual values."

Read the article for more detailed explanation.

December 18, 2018

What you need to know about dealing with disasters

"We all hope disaster won’t strike, but statistics show that most U.S. residents live in areas at risk for floods, earthquakes, hurricanes or other natural disasters. While you might not be able to avoid a disaster, you can reduce your financial risk by taking steps to insure yourself properly and by understanding how FEMA assistance can help, and where it could fall short."

"Consumer Action’s new Disaster Coverage educational module helps prepare homeowners and renters for the possibility that their home and possessions could be damaged or destroyed and that they could be displaced if their home becomes inhabitable."

In Homeowners and Renters Insurance: What you need to know before and after a natural disaster, readers learn which disaster losses are—and are not—covered under a standard homeowners or renters insurance policy, how to make sure they are adequately insured, what steps to take to recover their losses after disaster strikes, and what their options are if their insurance falls short.

In FEMA Spells Disaster Relief for Homeowners and Renters, readers learn about the types of FEMA assistance available, program eligibility and the application process. The publication also highlights the limitations of FEMA assistance and stresses the importance of purchasing adequate personal insurance coverage.

"Consumer Action empowers low- and moderate-income and limited-English-speaking consumers nationwide to financially prosper through education and advocacy."
For more information about Consumer Action email or call 800-999-7981.

December 17, 2018

US budget deficit skyrockets due to Trump tax cuts

"The US government's budget deficit stood at $305 billion in October and November, the first two months of fiscal 2019, compared with $202 billion in the same period a year earlier, according to Treasury Department figures. A shift in the timing of some payments and lower receipts from individual taxpayers due to the tax cuts earlier in the year are cited as factors contributing to the increase." Retirement Security SmartBrief 12/17/18. Source: The Wall Street Journal article by Kate Davidson.
"A strong economy typically leads to narrower deficits, as rising household income and corporate profits help boost tax collections, while spending on safety-net programs tends to decline. But that isn’t happening now, primarily because of the tax cuts."
"The federal budget deficit is projected to hit $1 trillion in the current fiscal year, up from $779 billion in the previous fiscal year, " according to the White House and the Congressional Budget Office (CBO).
What does the future hold for taxpayers, our children and grandchildren? "Overall, federal deficits are projected to rise in the coming years as spending on programs such as Medicare and Social Security grows and interest costs rise."
Aren't you glad you got a tax cut this year? Maybe you should use it as a down payment against your child's future.

December 13, 2018

How to Avoid the Holiday Debt Trap

It's that time of year... when diets and spending plans get ignored until the pain hits in the new year. FINRA (Financial Industry Regulatory Authority) provides some good tips and reminders.

"Thanksgiving came early this year, and media sources have already reported record-breaking holiday spending in the wake of Black Friday and Cyber Monday sales. The holiday shopping season is in full swing. But beware—more time to shop means more time to spend.
Let's face it, there's no escaping the aftermath of too much holiday cheer, whether it's a few extra pounds or the dreaded hangover. Binging on gifts and entertaining can leave a lasting pain, too: credit card debt."
  • Make a Budget and Check it Twice

  • Track Your Spending

  • Consider Shopping Solo

  • Reward Yourself With Your Credit Card Rewards

  • Get Smart About Credit Card Offers

Details and pep talk at:

Fixed Indexed Annuities AKA Equity-indexed Annuities

Know These 3 Things Before You Invest in a Fixed-Indexed Annuity

"To evaluate whether a FIA is right for you, you need to understand how you'd make money on the investment, how the insurer profits and how and at what point you can get access to your funds" explains David Stone, Founder and CEO of RetireOne, writing for Kiplinger's. He explains: Offering some upside potential with a guarantee against losses, these investments are principally a trade-off: You transfer some risk to the issuing insurance company in return for limited participation in the gains of an index. On the other hand, equities offer more growth, but … they can't guarantee anything."
Who should consider fixed indexed annuities and why? "Because of the low interest rate environment, finance experts like Dr. Wade Pfau and economist Roger Ibbotson have recommended that financial advisers and their clients think of FIAs as another asset class, framing them as an alternative to fixed-income investments like bond funds."
Stone explains the big 3 factors to understand:
  • How you earn money with that investment.
  • How the insurance company earns money.
  • How access to your money may be limited for a period of time.
Read his explanation at:

Check out this article by Jeff Rose from Forbes on Fixed-indexed or Equity-indexed annuities:

Don't Buy A Fixed Index Annuity Until You Read This

FIA: Dream Investment or Potential Nightmare?

Fixed-index annuities are popular — but carry risks

A Beginner's Tutorial for Fixed Index Annuities

December 12, 2018

Health Insurance Exchange open enrollment deadline less than a week away; 3 things Utahns need to know

Check out this info from the St. George News:
The deadline to sign up for coverage is Saturday, Dec. 15
The average price for premiums has decreased and the number of plans has increased
Select the plan that best meets your needs 
Utah consumers can get help filling out their application in three ways:
  • By phone. Consumers can call the Marketplace Call Center at 800-318-2596 (TTY: 855-889-4325). Available every day, except certain holidays.
  • In-person help. Consumers can use the Find Local Help tool on to see if they can get in-person help in their community.
  • Health insurance agents & brokers. Agents and brokers can help consumers enroll through the exchange or handle the whole process. Search for health insurance agents and brokers using the Find Local Help tool.
 Full article available at:

December 10, 2018

Marriott-Starwood data theft

Here we go again... another data breech. Even if you haven't stayed at an affected property recently, check out this info on ID theft and how to protect yourself. Below is quoted directly from Starwood:

We remind you it is always advisable to be vigilant for incidents of fraud or identity theft by reviewing your account statements and free credit reports for any unauthorized activity. You may obtain a copy of your credit report, free of charge, once every 12 months from each of the three nationwide credit reporting companies. To order your annual free credit report, please visit or call toll free at 1-877-322-8228. Contact information for the three nationwide credit reporting companies is as follows:

Equifax, PO Box 740241, Atlanta, GA 30374,, 1-800-685-1111
Experian, PO Box 2002, Allen, TX 75013,, 1-888-397-3742
TransUnion, PO Box 2000, Chester, PA 19016,, 1-800-916-8800
If you believe you are the victim of identity theft or have reason to believe your personal information has been misused, you should immediately contact the Federal Trade Commission and/or the Attorney General’s office in your state. You can obtain information from these sources about steps an individual can take to avoid identity theft as well as information about fraud alerts and security freezes. You should also contact your local law enforcement authorities and file a police report. Obtain a copy of the police report in case you are asked to provide copies to creditors to correct your records. Contact information for the Federal Trade Commission is as follows:
Federal Trade Commission, Consumer Response Center, 600 Pennsylvania Avenue, NW Washington, DC 20580, 1-877-IDTHEFT (438-4338),
If you are a resident of Connecticut, Maryland, Massachusetts, North Carolina, or Rhode Island, you may contact and obtain information from your state attorney general at:
Connecticut Attorney General's Office, 55 Elm Street, Hartford, CT 06106,, 1-860-808-5318
Maryland Attorney General's Office, 200 St. Paul Place, Baltimore, MD 21202,, 1-888-743-0023 or 1-410-576-6300
Office of the Massachusetts Attorney General, One Ashburton Place, Boston, MA 02108,, 1-617-727-8400
North Carolina Attorney General's Office, 9001 Mail Service Center, Raleigh, NC 27699,, 1-919-716-6400 or 1-877-566-7226
Rhode Island Attorney General’s Office, 150 South Main Street, Providence, RI 02903,, 1-401-274-4400
If you are a resident of Massachusetts or Rhode Island, note that pursuant to Massachusetts or Rhode Island law, you have the right to file and obtain a copy of a police report. You also have the right to request a security freeze.
If you are a resident of West Virginia, you have the right to ask that nationwide consumer reporting agencies place “fraud alerts” in your file to let potential creditors and others know that you may be a victim of identity theft, as described below. You also have a right to place a security freeze on your credit report, as described below.
Fraud Alerts: There are two types of fraud alerts you can place on your credit report to put your creditors on notice that you may be a victim of fraud—an initial alert and an extended alert. You may ask that an initial fraud alert be placed on your credit report if you suspect you have been, or are about to be, a victim of identity theft. An initial fraud alert stays on your credit report for at least 90 days. You may have an extended alert placed on your credit report if you have already been a victim of identity theft with the appropriate documentary proof. An extended fraud alert stays on your credit report for seven years. You can place a fraud alert on your credit report by contacting any of the three national credit reporting agencies.
Credit Freezes: You have the right to put a credit freeze, also known as a security freeze, on your credit file, free of charge, so that no new credit can be opened in your name without the use of a PIN number that is issued to you when you initiate a freeze. A security freeze is designed to prevent potential credit grantors from accessing your credit report without your consent. If you place a security freeze, potential creditors and other third parties will not be able to get access to your credit report unless you temporarily lift the freeze. Therefore, using a security freeze may delay your ability to obtain credit.

There is no fee to place or lift a security freeze. Unlike a fraud alert, you must separately place a security freeze on your credit file at each credit reporting company. For information and instructions to place a security freeze, contact each of the credit reporting agencies at the addresses below:
Experian Security Freeze, PO Box 9554, Allen, TX 75013,
TransUnion Security Freeze, PO Box 2000, Chester, PA 19016,
Equifax Security Freeze, PO Box 105788, Atlanta, GA 30348,
We remind you it is always advisable to be vigilant for incidents of fraud or identity theft by reviewing your account statements and free credit reports for any unauthorized activity. You may obtain a copy of your credit report, free of charge, once every 12 months from each of the three nationwide credit reporting companies. To order your annual free credit report, please visit or call toll free at 1-877-322-8228. Contact information for the three nationwide credit reporting companies is as follows:

November 29, 2018

Compare costs of hospital outpatient procedures with new tool

"The Centers for Medicare & Medicaid Services has launched an online tool that lets users see average Medicare reimbursement for procedures performed in hospitals or ambulatory surgical centers. The Procedure Price Lookup tool, part of an initiative to improve health care price transparency, also lets consumers see the national average copay for those without Medicare supplemental insurance." Retirement Security SmartBrief, Nov. 29, 2018. Writing for UPI, Tauren Dyson explains the new Procedure Price Lookup Tool
Check out the tool at:

CMS launches tool that prices surgeries for patients

Consumer Financial Protection Bureau being ravaged by Trump's team

"A report from the minority staff of the Senate banking committee accuses Consumer Financial Protection Bureau acting Director Mick Mulvaney of undermining the bureau's mission and says director nominee Kathy Kraninger may continue to weaken the CFPB. President Donald Trump should consider someone with consumer protection experience to lead the agency, the report says." (Retirement Security SmartBrief, 11/29/18). Read the article by Kate Berry in American Banker:

November 27, 2018

Brokers can purge complaints to make themselves look ethical

The Wall Street Journal reports that "thousands of brokers have scrubbed their records clean of complaints by customers and employers, allowing them to hide information from potential investors. "The process, called "expungement" is under the direction of the Financial Industry Regulatory Authority (FINRA), that regulates the industry and is funded by those it regulates. According to an academic research study 70% of brokers who apply to have their misdeeds wiped from the records are granted their request. So don't trust the FINRA "broker check" resource on its website.

Vanguard mutual fund company lowers fees on index mutual funds

Vanguard is famous for its low investment expenses but now the deal gets even better. 
The Wall Street Journal reports that Vanguard is lowering the minimum investments needed to qualify for admiral shares which charge lower expenses than the regular investor class of funds. Instead of $10,000 minimum to qualify for lower expense ratios, one only need to invest $3,000. The new lower fees apply to 38 index mutual funds.
Details at:

Can't retire due to parents and kids at home

Just so you know you are not alone... Michael Phillips & Heather Gillers, writing in The Wall Street Journal, explore the increase in the sandwich generation. "A 2014 study by the Pew Research Center found 52% of U.S. residents in their 60s--17.4 million people--are financially supporting either a parent or an adult child, up from 45% in 2005. Among them, about 1.2 million support both a parent and a child, more than double the number a decade earlier, according to an analysis of the Pew findings and census data." (11/17-8/18, A 1 & 9)
The main consequence is delayed retirement. A full decade after the Great Financial Crash, many people are still suffering the economic consequences.

4 Mental Tricks to Help You Save More for Retirement

"How do you psych yourself up to save money for a goal that’s decades away, like retirement? With a little mental trickery."
"Amassing the high dollar amounts needed for your golden years takes a long-term commitment. Sticking to your resolve — both financially and emotionally — requires strategies for dealing with a steady stream of near-term spending temptations and other expenses (planned and otherwise).
Here are some ways to help you stay strong." from Dayana Yochim writing for NerdWallet. Details at:

1. Paint a detailed picture of the life you want to live

2. Give your willpower muscle a break

3. Calculate the cost of today’s spending decisions

4. Reward your selfless behavior




Managing Someone Else's Money- Help from CFPB

"Millions of Americans manage money or property for a loved one who is unable to pay bills or make financial decisions. To help financial caregivers, the Bureau has developed easy-to-understand guides. The guides help you understand your role as a financial caregiver, also called a fiduciary. Each guide explains your responsibilities as a fiduciary, how to spot financial exploitation, and avoid scams. Each guide also includes a “Where to go for help” section with a list of relevant resources."
Watch the webinar:
Despite efforts by the Trump Administration to kill the Consumer Financial Protection Bureau, it lives! Check out the website for lots more useful consumer information:

November 26, 2018

Thinking of Buying Vehicle Insurance Online? Think Again

Writing for The Wall Street Journal (11/24-25/18), Nicole Friedman explains the pitfalls of online shopping for car insurance. The experience can be frustrating for many reasons, including, the proprietary formulas that insurance companies use. You need to visit multiple sites for the different companies (and set up your own spreadsheet for comparison). Some of the biggest insurers (including Stte Farm & Geico) don't share their rating system with price comparison sites. Now most sites are simply "lead generation" sites that identify potential customers for agents to contact.
Another reason: Your info may be sold. Most auto insurance comparison sites sell shoppers' info to agents and insurance companies.
So... what do you get in return for sharing your personal info? Two to three quotes, emails, and phone calls from agents.
"It's nothing more than a garbage arbitrage play, where someone buys your info once and sells it 10 times" according to Keith Melnick, CEO or insurance comparison sites Zebra (which no longer sells leads).
Insurance is regulated by the states with each state having different rules.
The actual cost will differ from the estimated price, sometimes significantly. 
Most shoppers need an expert's help to decide how much insurance to buy for their circumstances. 
"The quoted price matches up with the final price about 60% of the time."

Related: Take Control of your Auto Loan webinar from the Consumer Financial Protection Bureau:

November 23, 2018

Why it pays to delay claiming Social Security retirement benefits

A recent New York Times article by Peter Finch explains why it pays for most people to delay claiming social security past one's "full" or "normal" retirement age.
"There’s a big financial advantage for those wait. For each year past your full retirement age that you can put off applying for Social Security, your monthly check will increase by 8 percent."
"Let’s say you aim to retire this fall at 62, having worked 40 years and ending up with a final salary of $80,000. Your benefit would come to $1,455 a month, according to the Social Security Administration’s website, But if you could wait and keep working until 66, your full retirement age, you’d get $2,074 a month. At 70, it would be $2,833 — almost double the check you would get at 62."
“The terms for these deferrals began to be designed in the mid-1950s, and mortality was so different and interest rates were so different then,” said John Shoven, a Stanford University economics professor and an authority on Social Security. “What was a fair deal when it was introduced is really an outrageously good deal now.”

November 21, 2018

Thoughts on Thanksgiving Dinner

PLEASE note the role of wasted food as a contributor to green house gases. Leftovers are good! Don't throw them out!

For many Americans, a Thanksgiving without turkey is no Thanksgiving at all. Every year in late November we serve 46 million turkeys, more than on Easter and Christmas combined.
For vegetarians, faux products like Tofurky are common alternatives. But from the perspective of greenhouse gas emissions, do vegan replacements made from soy and wheat beat out their animal counterparts?
Yes, according to David Chen, a master’s student at the Potsdam Institute for Climate Impact Research. When Mr. Chen was an undergraduate at McGill University in Montreal, he assessed the environmental impacts of all the meals at the university’s cafeterias. The results were published in 2016.
The paper didn’t focus on turkey, but it did study chickens, which Mr. Chen called “kind of the ultimate efficient factory-farmed animal.”
This efficiency has to do with a measurement called the feed conversion ratio, which represents how much food you have to give an animal to produce a given quantity of meat. A completely efficient animal would turn one pound of grain into one pound of meat, for a ratio of 1:1.
“The reality right now for chickens is around 1.5,” Mr. Chen said.
For turkeys the ratio is closer to two pounds of fodder per pound of meat, which makes turkeys less efficient than chickens, and the related emissions higher.
Chickens release three to 16 times more greenhouse gas emissions per pound than soy products. So that means a tofu-based alternative could have a far smaller carbon footprint than poultry.
There are some caveats. The study focused on equal weights, comparing, say, a pound of turkey to a pound of soy. But it didn’t take calories into consideration. A pound of turkey has about 862 calories compared to 344 for tofu, so in theory you’d be eating less of the turkey.
And depending on how they’re raised, the carbon footprint of chickens can be on par with that of rice, or tomatoes and peppers raised in greenhouses. It’s also about 2.5 times less than the footprint of cheese.
Chickens also require less water than soy, Mr. Chen said.
Whether you cook an actual turkey, a Tofurky or something different altogether, hold onto your leftovers. According to the Food and Agriculture Organization of the United Nations, if food waste were a country it would be the third-largest emitter of greenhouse gases in the world.
In the United States, about 40 percent of the food that gets wasted is thrown out by consumers, so if you want to enjoy a traditional Thanksgiving with less guilt, eat your leftovers. The New York Times Cooking editors have assembled a few recipes to help you do just that. 

November 19, 2018

Four Tips To Help YOu Teach Your Kids About Money

Invest early to teach children about critical financial concepts and values, as explained by Greg Powell. Although the article is geared to financial advisors, any parent can understand the four points of teaching children about finances in order to protect their own (the parents') long term financial security.
1. Cultivate communication skills around financial topics
2. Help your kids build their own savings—and learn how to use them.
3. Understand that kids need teachers, not Santa Claus.
4. For entrepreneurial kids, stress the importance of profits—not just revenue.  
Read the full article:

Trump Tax Cut Not so Great

Whle the Republicans touted the tax reductions many Americans would experience, they failed to "advertise" a not so great aspect of the new law. In addition to increasing the federal deficit by massive amounts over the coming years, they also failed to mention a "gotcha" in the law as reported in the Retirement Security SmartBrief (11/19/18):
"An inflation adjustment written into last year's tax law will reduce the benefits of the Trump administration's tax cuts by allowing the IRS to gradually collect more from taxpayers. The standard deduction and tax brackets will rise in response to inflation more slowly, a change that will cost taxpayers $133.5 billion over 10 years, according to Congress's Joint Committee on Taxation." Read the details in the Wall Street Journal's MarketWatch:
Trump’s tax cut will shrink in 2019 thanks to inflation switch

November 18, 2018

How much to annuitize

A significant proportion of Americans are living longer than they anticipated. An income annuity is designed to protect against outliving one's assets. Mark Hulbert answers the question: "Do annuities have a place in your retirement portfolio?" Jeffrey Brown, Dean of the College of Business at the University of Illinois at Urbana-Champaign and director of the Retirement Research Center of the National Bureau of Economic Research describes the role of annuities: “the entire point of an annuity is to insure against longevity risk.”
"What is the right amount to allocate to annuities in your retirement portfolio? The answer, as you can imagine, depends on a whole host of assumptions."
"One clue comes from an analysis conducted by David Blanchett, head of retirement research at Morningstar. His focus was on deferred-income annuities, which differ from SPIAs in that their guaranteed payment begins at a later point. After analyzing more than 78,000 possible scenarios, each one of which represents a different series of assumptions, Blanchett found that the average optimal allocation across all scenarios was 30.52%."

November 6, 2018

I-bond rate increases to 2.83%

The current interest rate on I-bonds: 2.83% for bonds issued November 2018-April 2019.
This is an increase from 2.52% for the previous 6 months. 
Learn about I-Bonds: 
Rates & Terms

  • I bonds have an annual interest rate derived from a fixed rate and a semiannual inflation rate.
  • Interest, if any, is added to the bond monthly and is paid when you cash the bond.
  • I bonds are sold at face value; i.e., you pay $50 for a $50 bond.

Redemption Information

  • Minimum term of ownership: 1 year
  • Interest-earning period: 30 years
  • Early redemption penalties:
    • Before 5 years, forfeit interest from the previous 3 months
    • After 5 years, no penalty

Tax Considerations

  • Savings bonds are exempt from taxation by any State or political subdivision of a State, except for estate or inheritance taxes.
  • Interest earnings are subject to Federal income tax.
  • Interest earnings may be excluded from Federal income tax when used to finance education (see education tax exclusions).

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