"Incorporating an income annuity into a retirement portfolio increases
income, cuts retirement stress and boosts retirees' confidence,
according to a study by researchers Michael Finke and Wade Pfau from The
American College. Income annuities lower the risk
of outliving savings in retirement without lowering overall income,
compared with an investment-only approach, the study found." Retirement Security SmartBrief, April 24, 2019.
"new research including 10,000 simulations show income annuities really do improve retirement outcomes compared to investments alone."
This is according a study commissioned by Principal Financial Group
and conducted by Michael Finke, Ph.D., CFP, and Wade Pfau, Ph.D., CFP,
nationally renowned researchers from The American College (who are not
affiliated with Principal). Check out: https://401kspecialistmag.com/study-by-finke-pfau-shows-annuities-improve-retirement-outcomes/
To learn more about annuities, use the search function in this blog.
April 24, 2019
Where to put your "safe" money when interest rates are low
Low interest rates are great when you are borrowing money but frustrating for savers, especially retirees who seek to keep up with inflation but want to avoid risk. Of course, the best way to keep up with or beat inflation, at least before taxes, is to invest in stocks. But you don't want all your money in stocks due to the high risk of losses in the short run.
So where can you put your savings today?
Look for higher rates at online banks, money market accounts, certificates of deposit (18 months is the sweet spot today). Consider building a ladder of 18 month CDs.
Buy highly rated corporate bonds in bond funds. Avoid "high yield" junk bond funds which are risky and could lose value quickly.
Vanguard Short-Term Corporate Bond (VCSH) is an investment grade ETF (exchange-traded fund) charges only 0.07% expense ratio and is very highly rated by Morningstar.The fund is currently yielding 3%.
Source: "Investment strategies in a time of low rates" by Michael A. Polluck writing in The Wall Street Journal, April 22, 2019.
So where can you put your savings today?
Look for higher rates at online banks, money market accounts, certificates of deposit (18 months is the sweet spot today). Consider building a ladder of 18 month CDs.
Buy highly rated corporate bonds in bond funds. Avoid "high yield" junk bond funds which are risky and could lose value quickly.
Vanguard Short-Term Corporate Bond (VCSH) is an investment grade ETF (exchange-traded fund) charges only 0.07% expense ratio and is very highly rated by Morningstar.The fund is currently yielding 3%.
Source: "Investment strategies in a time of low rates" by Michael A. Polluck writing in The Wall Street Journal, April 22, 2019.
Medicare Part B cost going up
According to The Wall Street Journal (4/23/19) the cost of Medicare part B premiums for 2020 will likely increase $8.80/month from $135.50 to $144.30. The previous increase was from $134 in 2018.
While Medicare part A that covers hospitalization is usually free for most Americnas 65 and older, Part B charges a monthly premium that ranges from $135.50 to $460.50 depending on income.
Most retirees also purchase private supplemental policies or Medicare Advantage Plans (that charge premiums, co-payments and deductibles) to cover expenses not included in Medicare.
So retirees and soon-to-be retired persons need to plan for rapidly increasing health care costs in retirement.
While Medicare part A that covers hospitalization is usually free for most Americnas 65 and older, Part B charges a monthly premium that ranges from $135.50 to $460.50 depending on income.
Most retirees also purchase private supplemental policies or Medicare Advantage Plans (that charge premiums, co-payments and deductibles) to cover expenses not included in Medicare.
So retirees and soon-to-be retired persons need to plan for rapidly increasing health care costs in retirement.
April 15, 2019
Don't make your family guess your health care wishes
Writing in The Salt Lake Tribune (4/15/19), Chad Bittner, MD explains the need for an Advance Health Care Directive. April 15-19 is national health Care Decisions Week.
It is very important to have conversations with family about end of life wishes and now is the time; not tomorrow, next week, or sometime.... Fewer than 30% of Americans have tackled this task.
Talk with your advocate and doctor about your wishes.
Write it down.
Give copies of your health care directive to your advocate, doctor and family members.
Great tools are available at https://ucoa.utah.edu/directives/:
It is very important to have conversations with family about end of life wishes and now is the time; not tomorrow, next week, or sometime.... Fewer than 30% of Americans have tackled this task.
- Discuss
- Decide
- Document
Talk with your advocate and doctor about your wishes.
Write it down.
Give copies of your health care directive to your advocate, doctor and family members.
Great tools are available at https://ucoa.utah.edu/directives/:
Utah Advance Health Care Directive Forms and Instructions
Get Help With Advance Directives at www.LEAVING-WELL.org
April 10, 2019
A Guide to Student Loan Forgiveness
Consumer Reports offers A Guide to Student Loan Forgiveness
Recent news suggests it is almost impossible to get one's student loans forgiven, especially under the current administration and Education Secretary Betsy DeVoss. However, it may be worth a try with the help of Consumer Reports.
"The 12-year-old federal Public Service Loan Forgiveness program (PSLF) is one of the bigger programs. Under PSLF you can wipe out your remaining student debt after making 10 years' worth of on-time payments if you work in a qualifying public-sector job."
"About 35 million American workers are employed in the public sector and could be eligible for the federal Public Service Loan Forgiveness program alone, according to an estimate from the Consumer Financial Protection Bureau. Yet less than one million people have applied for PSLF so far. To help students find these programs, TISLA created a database that lists more than 100 loan-forgiveness programs."
Check the website of The Institute of Student Loan Advisors (TISLA), "a nonprofit that provides free one-on-one counseling for student loan borrowers." http://freestudentloanadvice.org/
"First the caveats. Most loan-forgiveness programs have very specific requirements. Of the ones open to all borrowers, most apply to those suffering financial hardship. Typically, forgiveness programs are only for federal loans, though some are awarded based on where you live and cover private loans, too. In some situations the amount forgiven is considered income, so you could owe a big tax bill."
Get the details:
https://www.consumerreports.org/student-loans/guide-to-getting-student-loans-forgiven/?EXTKEY=EE941IBAC&utm_source=acxiom&utm_medium=email&utm_campaign=20190409_cromc_engagewkly
Recent news suggests it is almost impossible to get one's student loans forgiven, especially under the current administration and Education Secretary Betsy DeVoss. However, it may be worth a try with the help of Consumer Reports.
"The 12-year-old federal Public Service Loan Forgiveness program (PSLF) is one of the bigger programs. Under PSLF you can wipe out your remaining student debt after making 10 years' worth of on-time payments if you work in a qualifying public-sector job."
"About 35 million American workers are employed in the public sector and could be eligible for the federal Public Service Loan Forgiveness program alone, according to an estimate from the Consumer Financial Protection Bureau. Yet less than one million people have applied for PSLF so far. To help students find these programs, TISLA created a database that lists more than 100 loan-forgiveness programs."
Check the website of The Institute of Student Loan Advisors (TISLA), "a nonprofit that provides free one-on-one counseling for student loan borrowers." http://freestudentloanadvice.org/
"First the caveats. Most loan-forgiveness programs have very specific requirements. Of the ones open to all borrowers, most apply to those suffering financial hardship. Typically, forgiveness programs are only for federal loans, though some are awarded based on where you live and cover private loans, too. In some situations the amount forgiven is considered income, so you could owe a big tax bill."
Get the details:
https://www.consumerreports.org/student-loans/guide-to-getting-student-loans-forgiven/?EXTKEY=EE941IBAC&utm_source=acxiom&utm_medium=email&utm_campaign=20190409_cromc_engagewkly
April 9, 2019
Utah State Treasurer has $370 million in Unclaimed Property
OK... This is NOT a scam. Every state has unclaimed property awaiting claim by owners or their rightful descendants. What is unclaimed property? Examples include forgotten utility deposits, life insurance payouts, health insurance reimbursements for overpayments, and contents of safe deposit boxes.
When my parents died I checked with the appropriate authorities in New York state. After filling out a couple forms, I received a few hundred dollars (related to health insurance claims that were overpaid).
For Utah, visit; mycash.utah.gov or call 801-715-3300.
Thanks to The Salt Lake Tribune, April 9, 2019.
When my parents died I checked with the appropriate authorities in New York state. After filling out a couple forms, I received a few hundred dollars (related to health insurance claims that were overpaid).
For Utah, visit; mycash.utah.gov or call 801-715-3300.
Thanks to The Salt Lake Tribune, April 9, 2019.
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