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).

November 5, 2018

Free Application for Federal Student Aid

It is essential to fill out the Free Application for Federal Student Aid (FAFSA) during your child's senior year in high school in order to be eligible for many student grants, loans, and scholarships. The earliest you can fill out the form is October 1 of the senior year.
However, you can get an estimate of aid eligibility with the FAFSA online estimating tool: Fafsa4caster at the U.S. Department of education website:

November 4, 2018

US slips in list of world's best places to do business

Under the Trump Administration with its pulling out of trade deals, boosting tariffs, and all around unpredictability, the US has fallen two places to eighth position in the World Bank's 2018 ranking of the world's best places to do business. New Zealand, Singapore and Denmark have retained the top three positions for the third consecutive year in the Doing Business Index.

Writing for The Wall Street Journal, Josh Zumbrun reports: "The World Bank’s rankings, which calculate the ease of opening and operating businesses, complying with taxes, and other aspects of an economy’s regulatory environment, are closely watched by businesses and policy makers around the world, with countries frequently orienting their domestic reforms around attempts to rise in the rankings."
“Sound and efficient business regulation is critical for entrepreneurship and a thriving private sector,” said Jim Yong Kim, the president of the World Bank Group.

The World Bank recently launched the Human Capital Index, which ranks countries on a number of health and education dimensions.  "While the U.S. scores eighth on the Doing Business Index, it ranked 24th in the inaugural Human Capital rankings, surpassed by much of Europe and a handful of East Asian nations, where child mortality is lower, fewer children are underdeveloped, and where students stay in school longer and test better.

We can and need to do better!

Compare popular retirement withdrawal strategies

Saving for retirement is hard enough but now comes the real test: how to spend the money to provide maximum enjoyment without living too long and running out of money. Andrea Coombes, writing for NerdWallet, review the most popular strategies:
  • The 4% Rule (really a guideline)
  • Dynamic Withdrawals
  • The Bucket Strategy
and provides tips for whichever strategy (or combination) you choose to follow. Her article provides a brief primer on the 3 strategies but this is a decision that requires careful consideration and perhaps the input from a professional (one who is a fiduciary).
Keep in mind that an immediate life annuity will insure against running out of money before your run out of breath. Check out my posts on annuities.
Read Andrea's article:

IRS raises caps on contributions to 401(k)s, IRAs

On November 1, 2018 the IRS announced cost-of-living adjustments to contribution limits for several types of retirement plans for 2019. The cap on contributions to 401(k), 403(b), many 457 plans and the Thrift Savings Plan rose to $19,000 from $18,500, while the limit for IRA contributions is $6,000, up from $5,500. This is the first increase since 2013. 
Other inflation adjustments were announced for retirement accounts. 
Start planning now to increase you retirement account contributions for next year. 
Reported by Richard Rubin for The Wall Street Journal, 11/2/18.

Create More Retirement Income and Cut Your Longevity Risk

When you retire, your monthly income stops unless you are one of the few retirees with a pension. "But there is a way to replace income no matter how long you live."

You can create
your own pension by buying an immediate annuity that pays guaranteed income for your life.

A deferred annuity, which pays out in the future, lets your money grow tax-deferred until you start taking payments.

An immediate annuity provides "income that replaces your salary or self-employment income, an income annuity insures against the risk of living longer than average."

An immediate annuity is "the only type of true longevity insurance. You transfer the risk to an insurance company in exchange for a premium."

"Risk-pooling and guarantees are what make lifetime annuities so valuable. With lifetime annuities, the 50 percent of people who die earlier than average subsidize those who live longer." You don’t know which half you’ll be in.

"You can self-insure against longevity risk by investing in stocks, bonds, and savings."  BUT! "You’ll need to save 25 percent to 40 percent more than with an annuity because you won’t have the advantage of risk-pooling, according to a Wharton Financial Institutions Center study."

Get the details from Ken Nuss at:

Moody's says gap between rich and poor threatens U.S. Triple-A bond rating thanks to republican tax cuts

For all virtually all of the last 100 years, the U.S. government has had the lowest cost to borrow money (which is a continual process) of any country in the world. Now the wealth gap threatens to destroy that track record and make borrowing more expensive and thus increase the deficit. On Oct. 8 Bradley Keoun, writing for, reported that President Trump's $1.5 trillion of tax cuts are forcing the U.S. Treasury to cover the gap by borrowing money in unprecedented amounts. This huge increase in borrowing threa=tens our country's creditworthiness.

The tax cuts have blown a huge hole in the federal budget, increasing the deficit to the highest amount in 6 years and skyrocketing the national debt past $21 trillion.
Credit analysis firm Moody's Investor service concluded that the growing gap between rich and poor is threatening our nation's credit rating.

Remember when the Republicans used to be the deficit hawks? No longer.
U.S debt has been considered the safest investment. While the interest rate is low, the likelihood of getting repaid was always 100%. Now that certainty is at risk.

According to Moody's "the $1.5 trillion in tax cuts have made the rich richer, while forcing the less-wealthy to cover a bigger share of the cost of government."
Both income inequality and wealth inequality are growing. 
And guess who owns the lion's share of our debt... yup, China.

November 1, 2018

Countdown to Retirement: A Five-Year Plan

You're in your late 50s or early 60s (or older) and suddenly" retirement looms with terrifying urgency. Do you have enough savings? Is your money invested too aggressively — or not aggressively enough?"
Peter Finch, writing for The New York Times,  provides a suggested “five-year countdown to retirement” based on interviews with financial advisers, economists and retirees.
What are the key things to concentrate on each year? 5, 4, 3, 2, 1... retire!
Check out:

Trump administrationt seeks to overturn the ACA's protections for pre-existing conditions

Something to think about as you get ready to vote on November 6:
Over 15M people could lose coverage if ACA lawsuit succeeds
"More than 15 million people could lose health care coverage or face premium hikes due to their gender, age or pre-existing conditions if a federal lawsuit filed by 20 Republican states targeting the Affordable Care Act succeeds in court, according to a report released by Democratic staff on the House Oversight Committee. The Trump administration-backed lawsuit seeks to overturn the ACA's protections for people with pre-existing conditions." 
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