June 3, 2019
Hybrid long term care policies
Due to the high cost of traditional long term care insurance (LTCI) and the likelihood of substantial premium increases in the future, insurance companies are offering hybrid policies that combine LTC protection with whole life insurance or with an annuity. With these policies the insured can be assured that their beneficiaries will receive a payout (from the life insurance) if they never need to pay for LTC. Also, if they pay for the LTC/life insurance policy with a single premium then no worries about future premium increases. The LTC/annuity hybrid offers flexibility on using the proceeds.
Check out this article and other items in this blog: https://www.thinkadvisor.com/2019/05/31/standalone-ltci-premiums-skyrocket-but-alternatives-abound/
Single persons without children who have no strong desire to leave an estate should first consider their assets and Social Security and pension payments along with the value of their house as a way to cover LTC costs before buying insurance. If SS + Pension + assets + proceeds from sale of house would cover LTC, then buying a policy would not be the best option.
Check out this article and other items in this blog: https://www.thinkadvisor.com/2019/05/31/standalone-ltci-premiums-skyrocket-but-alternatives-abound/
Single persons without children who have no strong desire to leave an estate should first consider their assets and Social Security and pension payments along with the value of their house as a way to cover LTC costs before buying insurance. If SS + Pension + assets + proceeds from sale of house would cover LTC, then buying a policy would not be the best option.
May 31, 2019
How a health care overhaul would cut jobs -- and help the economy
"As calls for radical health reform grow louder, many on the right, in
the center and in the health care industry are arguing that proposals
like “Medicare for All” would cause economic ruin, decimating a sector
that represents nearly 20% of our economy."
"It’s true: Any significant reform would require major realignment of the health care sector, which is now the biggest employer in at least a dozen states. Most hospitals and specialists would probably lose money. Some, like the middlemen who negotiate drug prices, could be eliminated. That would mean job losses in the millions."
"Though it will be economically painful, the point is to streamline for patients a Kafka-esque health care system that makes money for industry through irrational practices. After all, shouldn’t the primary goal of a health care system be delivering efficient care at a reasonable price, not rewarding shareholders or buttressing the economy?"
Yes, there would be economic disruption and job losses...
Economist and health policy expert Robert "Pollin suggests that a transition to Medicare for All should be accompanied by a plan to give those made redundant up to three years of salary and help in retraining for another profession."
"Despite the short-term suffering caused by any fundamental shift in our health care delivery system, reform would ultimately redirect resources in ways that are good for the economy, many experts say."
“I’m sympathetic to the impact that changes will have on specific markets and employment — we can measure that,” Schulman said. “What we can’t quantify is the effect that high health care costs have had on non-health care industries.”
"The expense of paying for employees’ health care has depressed wages and entrepreneurship, he said. He described a textile manufacturer that moved more than 1,000 jobs out of the country because it couldn’t afford to pay for insurance for its workers. Such decisions have become common in recent years."
“Yes, these are painful transitions,” said Baicker, who is now the dean of the University of Chicago’s Harris School of Public Policy. “But the answer is not to freeze the sectors where we are for all time. When agriculture improved and became more productive, no one said everyone had to stay farmers.”
Read the details from Elisabeth Rosenthal at:
https://khn.org/news/analysis-a-health-care-overhaul-could-kill-2-million-jobs-and-thats-ok/
"It’s true: Any significant reform would require major realignment of the health care sector, which is now the biggest employer in at least a dozen states. Most hospitals and specialists would probably lose money. Some, like the middlemen who negotiate drug prices, could be eliminated. That would mean job losses in the millions."
"Though it will be economically painful, the point is to streamline for patients a Kafka-esque health care system that makes money for industry through irrational practices. After all, shouldn’t the primary goal of a health care system be delivering efficient care at a reasonable price, not rewarding shareholders or buttressing the economy?"
Yes, there would be economic disruption and job losses...
Economist and health policy expert Robert "Pollin suggests that a transition to Medicare for All should be accompanied by a plan to give those made redundant up to three years of salary and help in retraining for another profession."
"Despite the short-term suffering caused by any fundamental shift in our health care delivery system, reform would ultimately redirect resources in ways that are good for the economy, many experts say."
“I’m sympathetic to the impact that changes will have on specific markets and employment — we can measure that,” Schulman said. “What we can’t quantify is the effect that high health care costs have had on non-health care industries.”
"The expense of paying for employees’ health care has depressed wages and entrepreneurship, he said. He described a textile manufacturer that moved more than 1,000 jobs out of the country because it couldn’t afford to pay for insurance for its workers. Such decisions have become common in recent years."
“Yes, these are painful transitions,” said Baicker, who is now the dean of the University of Chicago’s Harris School of Public Policy. “But the answer is not to freeze the sectors where we are for all time. When agriculture improved and became more productive, no one said everyone had to stay farmers.”
Read the details from Elisabeth Rosenthal at:
https://khn.org/news/analysis-a-health-care-overhaul-could-kill-2-million-jobs-and-thats-ok/
How long does it take to pay off student loans?
College grads expect to pay off student debt in 6 years—this is how long it will actually take
"Educational services company Cengage surveyed 2,500 recent and upcoming graduates for the Cengage Student Opportunity Index and found that respondents, on average, believe it will take six years to pay off their student loans.""In reality, it will take closer to 20" as summarized by Abigal Hess.
Get the details and learn more at: https://www.cnbc.com/2019/05/23/cengage-how-long-it-takes-college-grads-to-pay-off-student-debt.html
May 27, 2019
Who pays for Trump's tariffs? You do of course!
Here is one example from Planet Money that illustrates the point:
"In early 2018, after the American company Whirlpool complained about foreign competition, the Trump administration implemented tariffs on washing machines imported from all over the world. It’s a 20% tariff on the first 1.2 million washing machines sold a year and a 50% tariff on every one after that."
"While these tariffs were imposed on foreign manufacturers, the study by Flaaen, Hortaçsu, and Tintelnot, like study after study before it, finds it’s ultimately U.S. consumers who pay. New washing machines in America got about 12% more expensive. That’s not too surprising."
"What is surprising is that dryers also got more expensive even though they weren’t subject to the tariff. That’s because washers and dryers are in econospeak “complementary goods.” They are more valuable together and are typically bought at the same time. “Before the tariffs, most manufacturers were pricing paired washer and dryer models at the exact same sticker price,” Felix Tintelnot, a co-author of the study, says. “This pricing strategy was maintained after the tariffs… so the full effect of tariffs on prices is only visible after factoring in the price of the complementary good – dryers.”
"The clear losers in the study are Americans who needed to buy a washing machine or dryer in the last couple years. But, because the tariffs made foreign washing machines more expensive, it made American-made washing machines more appealing — and it convinced LG, Samsung, and Whirlpool to create about 1,800 jobs making washing machines and dryers in the US. Cool, right? Not really. After taking into account the extra money paid for these appliances because of the tariff, those 1,800 jobs ended up costing Americans about $815,000 per job every year."
Get more details and examples at: https://www.npr.org/sections/money/2019/05/21/725135293/more-tariffs-on-china-more-head-scratching-from-economists?utm_source=npr_newsletter&utm_medium=email&utm_content=20190521&utm_campaign=money&utm_term=nprnews
"In early 2018, after the American company Whirlpool complained about foreign competition, the Trump administration implemented tariffs on washing machines imported from all over the world. It’s a 20% tariff on the first 1.2 million washing machines sold a year and a 50% tariff on every one after that."
"While these tariffs were imposed on foreign manufacturers, the study by Flaaen, Hortaçsu, and Tintelnot, like study after study before it, finds it’s ultimately U.S. consumers who pay. New washing machines in America got about 12% more expensive. That’s not too surprising."
"What is surprising is that dryers also got more expensive even though they weren’t subject to the tariff. That’s because washers and dryers are in econospeak “complementary goods.” They are more valuable together and are typically bought at the same time. “Before the tariffs, most manufacturers were pricing paired washer and dryer models at the exact same sticker price,” Felix Tintelnot, a co-author of the study, says. “This pricing strategy was maintained after the tariffs… so the full effect of tariffs on prices is only visible after factoring in the price of the complementary good – dryers.”
"The clear losers in the study are Americans who needed to buy a washing machine or dryer in the last couple years. But, because the tariffs made foreign washing machines more expensive, it made American-made washing machines more appealing — and it convinced LG, Samsung, and Whirlpool to create about 1,800 jobs making washing machines and dryers in the US. Cool, right? Not really. After taking into account the extra money paid for these appliances because of the tariff, those 1,800 jobs ended up costing Americans about $815,000 per job every year."
Get more details and examples at: https://www.npr.org/sections/money/2019/05/21/725135293/more-tariffs-on-china-more-head-scratching-from-economists?utm_source=npr_newsletter&utm_medium=email&utm_content=20190521&utm_campaign=money&utm_term=nprnews
Bottom Line: Trump's Tariffs hurt U.S. consumers!
Investing $5,000 a year results in $1.2 million in 40 years so start now!
Wait... $5,000 x 40 $200,000. How did you get $1.2 million? The extra $1million is due to compounding.
Writing for MarketWatch, Mitch Tuchman explains compound interest.
“Shark Tank” star Kevin O’Leary has some simple advice for anyone who finds investing scary: Just do it. Now.
“When you’re 21 years old, or 20 or 18 or 19 and you start putting aside 10% of what you make, you’ll [have] over $1 million by the time you’re 65,” O’Leary told CNBC.
“If no one else is going to worry about your retirement, I want you to worry about it.”
https://www.marketwatch.com/story/kevin-oleary-this-easy-math-trick-helps-you-crush-retirement-goals-2019-03-28?mod=cx_picks&cx_navSource=cx_picks&cx_tag=mw&cx_artPos=7#cxrecs_s
Of course, investing never provides a guaranteed annual return but the example should motivate you, whatever your age, to convert your daily impulse spending into future financial security....even if you have less than 40 years until your "financial freedom" goal.
Writing for MarketWatch, Mitch Tuchman explains compound interest.
“Shark Tank” star Kevin O’Leary has some simple advice for anyone who finds investing scary: Just do it. Now.
“When you’re 21 years old, or 20 or 18 or 19 and you start putting aside 10% of what you make, you’ll [have] over $1 million by the time you’re 65,” O’Leary told CNBC.
“If no one else is going to worry about your retirement, I want you to worry about it.”
https://www.marketwatch.com/story/kevin-oleary-this-easy-math-trick-helps-you-crush-retirement-goals-2019-03-28?mod=cx_picks&cx_navSource=cx_picks&cx_tag=mw&cx_artPos=7#cxrecs_s
Of course, investing never provides a guaranteed annual return but the example should motivate you, whatever your age, to convert your daily impulse spending into future financial security....even if you have less than 40 years until your "financial freedom" goal.
Wealth inequality is bad and getting worse
Writing May 5, 2019 in The
Washington Post, economist Robert J. Samuelson explains how the gap between
rich and poor is getting worse in America. It's not about income... it's about
the incredible growing wealth disparity.
The $100
trillion question: What to do about wealth? and... what is the current
administration doing about the problem?
Summarizing
data from a recent Federal Reserve board study, Samuelson concludes: "The
study’s most striking feature is how gigantic the numbers are."
source: https://www.washingtonpost.com/people/robert-j-samuelson/?utm_term=.551849e3978d
The
distribution of wealth is highly skewed and getting worse:
"In
2018, the net worth of the wealthiest 10 percent of Americans represented 70
percent of household wealth, up from 61 percent in 1989, the study’s first
year. Even among this upper crust, wealth became more concentrated. Over the
same years, the share of the top 1 percent went from 24 percent to 31
percent."
"The
bottom 50 percent of U.S. households had virtually no net worth, the difference
between assets and liabilities, mainly loans. Their wealth share tumbled from 4
percent of total wealth in 1989 to 1 percent in 2018."
"The
big losers over the past 30 years could be termed the broad middle class: those
with wealth starting at the median (the midpoint of all wealth) and going to
the 90th percentile. Their share of household wealth, though still sizable, has
dropped from 35 percent in 1989 to 29 percent in 2018."
"The
truth is that we still don’t fully understand the surge in economic inequality
of the past three decades. The populist temptation is to blame greed, but this
is not a satisfactory explanation because greed is hardly new. It seems virtually certain that, sooner or later,
taxes on the well-to-do and wealthy will go up. That’s where the money is, and
that’s where the biggest private gains have been."
Maybe it is
time to revisit the recent tax reform legislation.
How did you
fare under the new income tax law?
May 25, 2019
Impact of student loans on women
Women are at a crucial disadvantage when it comes to student loans
"Researchers surveyed 1,000 college-educated adults across America and
found that 37% of women did not understand the basics of student loans —
which are things like timelines, monthly payments, interest rates, tax
implications, refinancing and evaluating lenders, before they borrowed —
versus only 20% of men."
Overall, less than half of millennials (44%) surveyed fully understood
when and how they needed to repay their student loans before taking on
the debt and more than a third admitted that they didn’t comprehend the
basics of student debt.
Writing forYahoo Finance
https://finance.yahoo.com/news/student-loans-women-194505040.html
Trump's tariffs cost US consumers $106 billion per year. Your cost: $831/year
"US tariffs recently imposed on goods from China will cost American
households $106 billion annually, according to a report from the Federal
Reserve Bank of New York. These tariffs likely will reduce overall
tariff revenue collected by the US and will "create
large economic distortions," the report said."
Tariffs are a hidden tax on consumer purchasing power.
Invest that $800 each year for 10 years in an Individual Retirement Account (IRA) or 401(k) at a modest 4% return for a total of $11,173. Use an online calculator to make your own estimates:
http://moneychimp.com/calculator/compound_interest_calculator.htm
Tariffs are a hidden tax on consumer purchasing power.
Trump's China tariffs hike will cost average U.S. family $831 a year
- Higher U.S. tariffs on Chinese goods are "likely to create large economic distortions and reduce U.S. tariff revenues," according to economists at the New York Federal Reserve.
- The latest round of 25% tariffs on $200 billion in certain Chinese imports will cost U.S. households $106 billion a year, or $831 for the average family, New York Fed researchers found.
- Tens of billions in recent stock-market losses reflect worries that U.S. trade friction with China isn't going away soon. https://www.cbsnews.com/news/trumps-china-tariffs-hike-will-cost-typical-u-s-family-831-a-year-fed-economists-say/
Invest that $800 each year for 10 years in an Individual Retirement Account (IRA) or 401(k) at a modest 4% return for a total of $11,173. Use an online calculator to make your own estimates:
http://moneychimp.com/calculator/compound_interest_calculator.htm
May 22, 2019
Hundreds of financial professionals pose a risk to their clients!
"A proposed rule from the Financial Industry Regulatory Authority that
would impose restrictions on firms employing high-risk registered
representatives and financial advisers may apply to 61
financial-services companies, said FINRA CEO Robert Cook. John Salerno,
who manages the high-risk representative program, said hundreds of
individuals have been identified as presenting risk to clients."
https://www.investmentnews.com/article/20190517/FREE/190519929/finra-makes-its-list-to-target-hundreds-of-rogue-individuals
ALWAYS ask a financial salesperson/adviser if they are a fiduciary... which means they must put the client's interests first.
Check related blog posts on fiduciaries. The Obama administration proposed regulations requiring financial salespersons and advisors who deal with retirement accounts to be fiduciaries but the trump administration shot down that consumer protection.
Check the background of investment professionals at https://www.finra.org/ using Broker Check.
https://www.investmentnews.com/article/20190517/FREE/190519929/finra-makes-its-list-to-target-hundreds-of-rogue-individuals
ALWAYS ask a financial salesperson/adviser if they are a fiduciary... which means they must put the client's interests first.
Check related blog posts on fiduciaries. The Obama administration proposed regulations requiring financial salespersons and advisors who deal with retirement accounts to be fiduciaries but the trump administration shot down that consumer protection.
Check the background of investment professionals at https://www.finra.org/ using Broker Check.
Subscribe to:
Posts (Atom)