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Navigating your finances as a couple

Tax season is a good time for couples to get on the same page regarding household finances. Now that you’ve filed your 2018 taxes, take time to think about how you can better work together with your spouse as you navigate 2019. Particularly for those who file jointly, it’s important for both spouses to understand the full financial picture – including how much income was earned during the year and from what sources, and how much and what type of expenses were incurred. 

Filing taxes together, while not the most romantic venture, can help couples take stock of their dreams and plans together and further commit to saving for the future. For example, if both partners are aware of the types of expenses that can be deducted, they each can work on ways to maximize those deductions throughout the year. Call us. We may be able to help you maximize tax-efficient opportunities to help reach your long-term goals.

Another reason it’s important for both spouses to understand the household finances is that, regardless of who takes the lead at tax time, both spouses can be impacted by any potential negative outcomes. For example, a spouse who files a fraudulent return may be the only one prosecuted, but that hardly helps the innocent spouse if the government seizes assets for back taxes.1

Some common financial secrets couples may hide from each other include having loads of debt or a low credit score, a past bankruptcy, habitually not paying bills on time or the inability to stick to a budget.2 This is why it is important for couples to start having money conversations even before they get married – whether it’s a first marriage or their fifth – and to continue having these conversations throughout their marriage.

But discussing finances in a relationship can be a tricky business. If one spouse doesn’t want to share this role, it’s important to find out why. Does he prefer to have all the control? Does she think it will be too difficult for both to agree on financial decisions? Does he not want to be bothered about money? Is she hiding income or spending habits?3 Knowing what’s at the heart of any money disagreements can help you find a resolution together.

While money is the number one issue that married couples argue about, and the second leading cause of divorce, after infidelity, you can build a strong marriage and a strong financial relationship.4 Open communication is the biggest key. Find a time when you’re both relaxed and sit down and discuss your goals and dreams. Work on your budget together — respecting each other’s differences, strengths and weaknesses — to ensure you’re both traveling in the same direction.5

Content prepared by Kara Stefan Communications.

1 Walter Pavlo. Forbes. Feb 25, 2019. “Ten Things Every Spouse Of A White Collar Defendant Should Know.” https://www.forbes.com/sites/walterpavlo/2019/02/25/ten-things-every-spouse-of-a-white-collar-defendant-should-know/. Accessed Feb. 25, 2019.

2 Natalia Lusinski. Bustle. Oct. 25, 2017. “What Are Financial Red Flags In A Relationship? 11 Signs Your Partner’s Spending Habits Are Worrisome.” https://www.bustle.com/p/what-are-financial-red-flags-in-a-relationship-11-signs-your-partners-spending-habits-are-worrisome-2359659. Accessed Feb. 25, 2019.

3 Miriam Caldwell. The Balance. Dec. 22, 2018. “When Your Spouse Won’t Participate in a Financial Plan or Budget.” https://www.thebalance.com/spouse-won-t-participate-in-a-financial-plan-2386017. Accessed Feb. 25, 2019.

4 DaveRamsey.com. “The Truth About Money and Relationships.” https://www.daveramsey.com/blog/the-truth-about-money-and-relationships. Accessed Feb. 25, 2019.

5 Ibid.

Our firm does not provide, nor is any statement contained herein intended to provide, tax advice. All individuals are encouraged to consult with a qualified tax professional prior to making any decisions about their personal situation.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Savings Ideas for Health Insurance

The growing cost of medical services and health insurance in the United States is a problem that is not isolated to a single demographic. Many people are impacted. The latest surveys of American businesses report that health insurance and benefits are one of their greatest expenses, second only to employee payroll.

Companies used to subsidize a greater share of the cost of insurance, but now employees – especially those with families – bear a far greater burden than ever before. As a result, households are paying more in out-of-pocket costs for health care whether they have employer-sponsored coverage or buy it on the individual market.1

If health care expenses are increasingly taking up a larger portion of your household budget, we may be able to help. There are various types of insurance products and tax-advantaged savings accounts that can help defray out-of-pocket spending. It’s also worth consulting with a tax professional to assess how you may be able to deduct medical expenses from your return – one of the few deductions still available for those who itemize.2

There is currently great debate over whether America’s system of paying for health care can be fixed or if it needs to be entirely overhauled. For years, the health insurance industry has pursued a strategy of encouraging their members to become more informed medical care consumers – to basically “shop” for lower prices and better value among providers and facilities. It’s true that many people are now more aware of how prices can vary, but this knowledge is often borne out of unfortunate experience.3

There are ways to help fix the broken system. For example, pharmaceutical companies lack transparency in how they price drugs, and it seems they vary what they charge for the same medications based on who can afford to pay more. A study conducted in 2018 found that approximately one out of every five prescriptions requires a higher out-of-pocket payment for insured people than the standard retail price for uninsured patients.4

To make matters worse, insurers made pharmacists agree not to inform customers of the discrepancy in price if they wanted to be included in the insurer’s network. Congress recently passed legislation negating this “gag order” on behalf of patients. However, the practice of charging the insured more than uninsured patients still exists, so you should always ask for a comparison between the two prices. Even if you have drug coverage, you are allowed to pay the uninsured price and cash in on those savings.5

Another form of insurance that may need further scrutiny is dental. A basic dental insurance plan typically covers cleanings, fillings and other routine care. However, more complex procedures such as a crown, bridge or root canal may only be covered for half the cost – if any coverage is provided at all. Furthermore, dental insurance usually has pretty low annual caps compared to medical insurance, such as $1,000 or $1,500 per year.

One way to expand coverage for dental care is to see what your health care insurance plan might cover. Often these policies will provide at least some coverage for procedures deemed “medically necessary”, such as dental repair resulting from injury, some periodontal surgery and even appliances prescribed for sleep apnea. It’s a good idea to call your insurer and/or review your policy for dental services that are categorized as either covered or excluded services. Some dentist offices are starting to collect health insurance information from patients and even filing relevant claims on their behalf.6

Content prepared by Kara Stefan Communications.

1 Dr. Josh Luke. Forbes. Jan. 22, 2019. “Simple Tips to Save Thousands on Healthcare in 2019.” https://www.forbes.com/sites/forbesbooksauthors/2019/01/22/simple-tips-to-save-thousands-on-healthcare-in-2019/#6e224617b87d. Accessed Feb. 19, 2019. [CLICK HERE]

2 H&R Block. “Can I Claim Medical Expenses on My Taxes?” https://www.hrblock.com/tax-center/filing/adjustments-and-deductions/medical-expenses-deduction/. Accessed Feb. 24, 2019. [CLICK HERE]

3 Alessandra Malito. MarketWatch. Dec. 15, 2018. “Outpatient visits are getting more expensive — but that’s nothing compared to inpatient costs.” https://www.marketwatch.com/story/the-average-outpatient-visit-is-getting-more-expensive-but-thats-nothing-compared-to-inpatient-costs-2018-12-14. Accessed Feb. 24, 2019. [CLICK HERE]

4 Monica Laliberte. WRAL.com. Feb. 19, 2019. “How to get cheaper medications at the pharmacy.” https://www.wral.com/how-to-get-cheaper-medications-at-the-pharmacy/18202615/. Accessed Feb. 19, 2019. [CLICK HERE]

5 Danny Hakim. The New York Times. March 9, 2018. “Ask Your Doctor. Until Then, Here’s a Word From Our Sitcom.” https://www.nytimes.com/2018/03/09/business/drug-commercials-product-placement-blackish.html?smprod=nytcore-ipad&smid=nytcore-ipad-share. Accessed Feb. 19, 2019. [CLICK HERE]

6 David Tuller. The New York Times. Sep. 20, 2018. “Exorbitant Dental Bill? Medical Insurance May Cover Some of It.” https://www.nytimes.com/2018/09/20/well/live/dental-bill-health-insurance.html. Accessed Feb. 19, 2019. [CLICK HERE]

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Don’t Leave Your Long-Term Care Plan to Chance

According to new research from Genworth, one of the nation’s leading long-term care insurance companies, Americans are both entering caregiver roles and requiring care at younger ages. Among the study’s findings:1

·         Nearly half of family caregivers now are men

·         The average age of a family caregiver is 47 (down from age 53 in 2010)

·         57% of family members who require care are 65 or older (down from 80% in 2010)

·         One in five long-term care recipients needs help as the result of an accident rather than illness (nearly twice the number from 2010)

·         U.S. caregivers provide an average of 21 hours of assistance a week for a duration of three years

It’s not clear why some of these statistics have changed so dramatically in eight years, but what is clear is that it’s prudent to develop a long-term care plan sooner rather than later. We may think that because people are living longer that they won’t need care assistance until their 80s and beyond, but the results of this recent survey tell a different story.

If you’re planning to live to a ripe old age, do yourself and your family and friends a huge favor: Find resources to help you remain independent as long as possible. There are a wide variety of options in all price ranges, and it’s never too early to consider a plan that’s right for your situation. If you would like help exploring these options, please give us a call.

Having resources lined up to help with daily challenges also means that when you do spend time with family, it’s quality time and not focused on household chores or other issues. This may mean having a reliable helper to turn to when your television goes on the fritz and you need someone (with technical knowledge and endless patience) to work with the company’s telephone support. It may mean changing lightbulbs in dark bathrooms or hauling trash cans to and from the curb. Household assistance can help with the day-to-day chores we may take for granted when younger and healthier. These types of assistance are commonly referred to as long-term services and supports (LTSS) and aren’t covered by Medicare. One report found that the average cost for those with high LTSS needs who are paying for services is about $10,000 a year.2

Long-term care insurance can help with more personal assistance. This type of coverage kicks in for more serious impairments to help with things like bathing, dressing, eating, going to the bathroom and getting around from room to room.3

For some, the first step to a caregiver plan is “right-sizing” to a family home that is easier and less expensive to maintain. Some may take the opportunity to move to a retirement community – to be surrounded by peers and services – or to choose a warmer client conducive to an active retirement lifestyle.4

Another option to consider is a Continuing Care Retirement Community (CCRC), which provides a progression of care as residents age. These communities offer a range of amenities, including housekeeping and dining options, transportation, wellness and fitness programs, recreational and social outings, and activities.5

As you plan for the future, don’t forget to enjoy today. Research has found that spending more time in nature has significant health benefits: 90 minutes a day outside in a wooded area can help reduce activity in the part of the brain linked to depression. Spending time in nature also has been attributed to lowering blood pressure; reducing anxiety, feelings of aggression and ADHD symptoms; increasing pain control; and boosting the immune system and feelings of happiness.6

Content prepared by Kara Stefan Communications.

1 Howard Gleckman. Forbes. Dec. 26, 2018. “The Changing Demographics Of Family Caregivers.” https://www.forbes.com/sites/howardgleckman/2018/12/26/the-changing-demographics-of-family-caregivers/. Accessed Jan. 31, 2019.

2 Wallace Stephens. The American Journal of Managed Care. Jan. 31, 2019. “Evaluating Hardships Faced by Elderly Americans Requiring Long-Term Care and Support.” https://www.ajmc.com/newsroom/evaluating-hardships-faced-by-elderly-americans-requiring-longterm-care-and-support. Accessed Jan. 31, 2019.

3 Dana Anspach. The Balance. Sept. 6, 2018. “Insurance and the Activities of Daily Living.” https://www.thebalance.com/what-are-the-activities-of-daily-living-2388730. Accessed Feb. 13, 2019.

4 AfterFiftyLiving.com. “5 Reasons to Move to a Retirement Community.” https://www.afterfiftyliving.com/5-reasons-to-move-to-a-retirement-community/. Accessed Jan. 31, 2019

5 U.S. News & World Report. Sept. 17, 2018. “Top 5 Things to Know About Continuing Care Retirement Communities.” https://health.usnews.com/wellness/aging-well/articles/2018-09-17/top-5-things-to-know-about-continuing-care-retirement-communities. Accessed Jan. 31, 2019

6 Evan Fleischer. BigThink. Oct. 12, 2018. “Doctors in Scotland can now prescribe nature to their patients.” https://bigthink.com/personal-growth/doctors-in-shetland-can-now-prescribe-a-walk-in-nature. Accessed Jan. 31, 2019.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Women in the Workplace

 

People are living longer, which also means more people are working longer, either because they want to stay engaged or they need more time to prepare for a longer retirement. Unfortunately, these trends haven’t made ageism any less prominent. One researcher found careers tend to peak at age 45 for men and age 40 for women. Employees beyond that age are less likely to be considered for promotions.1

 

As bleak as that may sound, imagine what it means for a woman. If she wants to have children, she will likely have them by the time she experiences the roadblock of ageism – meaning she’s already spent some time out of the workforce. Also, women are already behind the curve due to the persistent wage gap between men and women who do the same job. A woman who makes $10,169 a year less than her male counterpart will earn $406,760 less over a 40-year career.2

 

Earnings are just part of the story. Lower income means less money a woman can contribute to retirement savings accounts and lower Social Security benefits in retirement. The combination of lower income and fewer working years makes it more difficult for women to create a strategy for financial independence in retirement.

 

The problem of women earning less income impacts everyone. The problem can cause an over-reliance on government benefits and directly impacts the U.S. economy and overall GDP. Women’s participation in the workforce fell from 60.7 percent in 2000 to 57.2 percent in 2016.3

 

Not only is the U.S. missing out on a prime opportunity to enhance economic growth, it may actually begin to see an economic reversal due to reduction in the workforce.

 

The problem appears to originate at the beginning of women’s careers. If a young woman is paid less than a male colleague performing the same job with equivalent education and experience, it’s not likely she will ever catch up. Instead of determining a new hire’s salary based on the education, skills and experience necessary for a specific position, many employers still base the amount offered on the candidate’s prior salary history.4 Inequitable pay at the beginning could result in lower income throughout a woman’s career and into retirement.

 

While the Equal Pay Act — the federal law prohibiting pay discrimination based on gender — has been around for more than 55 years, it hasn’t balanced the scale when it comes to equal pay for men and women. However, there are some indications times are changing. For example, seven states have passed laws that prohibit employers from using a job candidate’s wage history to determine the salary offered for a specific position. New legislation to this effect is being considered in Maryland, Rhode Island and Illinois this year.5

 

For women concerned about a long-term retirement income strategy, talk to us. We can offer insurance solutions based on your current situation to help put you on a path to maintain the retirement lifestyle you deserve.

 

Content prepared by Kara Stefan Communications 

 

1 Lindsay Cook. Financial Times. Dec. 21, 2018. “Ageism in the workplace ‘starts at 40′ for women.” https://www.ft.com/content/e4141576-04eb-11e9-99df-6183d3002ee1. Accessed Jan. 30, 2019.

 

2 Susan Tompor. Pittsburgh Post-Gazette. Jan. 22, 2019. “How the gender pay gap hurts women’s retirement and 401(k) plans.” https://www.post-gazette.com/news/aging-edge/2019/01/22/Susan-Tompor-How-the-gender-pay-gap-hurts-women-s-retirement-and-401-k-plans/stories/201901220102. Accessed Jan. 30, 2019.

 

3 Alison Burke. Brookings Institution. Dec. 5, 2017. “10 facts about American women in the workforce.” https://www.brookings.edu/blog/brookings-now/2017/12/05/10-facts-about-american-women-in-the-workforce/. Accessed Jan. 30, 2019.

 

4 Lilly Ledbetter. CNN. Jan. 30, 2019. “Lilly Ledbetter: Women can’t wait any longer for paycheck fairness.” https://www.cnn.com/2019/01/30/opinions/paycheck-fairness-lilly-ledbetter/index.html. Accessed Feb. 28, 2019.

 

5 Ibid.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

 

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Digging Up the Sweet Benefits of Health Food Trends

When Lessie Brown, a 114-year-old woman from Ohio, passed away in January, her family attributed her longevity to the fact that she ate a sweet potato nearly every day until she was well past 100.1

All potatoes are packed with nutrition, but the more colorful the potato, the better.

Varieties of orange, yellow and purple sweet potatoes have fewer calories and carbs than your basic Idaho potato. A single sweet potato also provides more than 100 percent of the recommended daily allotment of vitamin A.2 Scientists rated the sweet potato as the No. 1 most nutritious food in a recent study, followed by figs, ginger, pumpkins and brussels sprouts.3

We all know nutrition is a huge part of staying healthy, but also remember good health can be a major influencer in making your savings last throughout retirement. The fewer the major medical bills, the more money you’ll retain.

Although staying healthy is a wonderful plan A, we can’t predict the future, no matter what we eat or how much we exercise. That’s why it’s important also to have a Plan B, which is where insurance products are generally appropriate. We typically buy insurance to help cover events that would financially devastate us, like having to replace our car or home, but it can also be used to replace or generate income during retirement. Contact us if you’d like more information.4

Another “super food” that’s been around for centuries is bone broth, basically soup made out of stewed bones. Remarkable nutritional qualities have raised bone broth’s popularity in the past few years. Here’s why:5

·         Wellness — Bone broth features a bounty of amino acids, which help reduce inflammation, improve digestion and boost the immune system. This helps us avoid common and seasonal ailments, like colds and flu.

·         Mobility — Keep moving so you can stay fit. Bone broth has natural glucosamine and chondroitin sulfates that aid in protecting, repairing and healing joints.

·         Appearance — When we look good, we feel good. Bone broth is packed with amino acids such as proline, which helps in the production of collagen, that magical protein that maintains skin elasticity, shiny hair and strong nails.

If you’re looking to lose weight as a way to get healthier, you may consider a low- or no-carb diet. Unfortunately, if you cut out all carbs, you’ll eliminate one of the building blocks of a healthy diet. Instead, consider switching to “slow-acting” carbs, which take more time to digest and facilitate a slower rise in blood sugar. Slow-acting carbs include whole-grain bread, fruits, vegetables and beans.6

Interesting new research shows if you’re in the mall food court and smell the wafting scent of french fries or pizza, you should wait a bit before you place an order. According to this study, if you immerse yourself in that scent for at least two minutes, you’re more likely to make a healthier food choice. The lesson here? Don’t give in to immediate impulses — apparently your body knows how to power through initial cravings and appeal to your better senses.7

 

Content prepared by Kara Stefan Communications.

1 John Seewer. The Associated Press. Jan. 8, 2019. “Lessie Brown, oldest person in the US, dies at 114.” https://www.apnews.com/5bc33af9912f450693fc742877cd2bfc. Accessed Jan. 24, 2019.

2 Cassie Shortsleeve. Time. Jan. 10, 2019. “Are Sweet Potatoes Healthy? Here’s What Experts Say.” http://time.com/5498125/are-sweet-potatoes-healthy/?xid=tcoshare. Accessed Jan. 24, 2019.

3 BBC. Jan. 29, 2019. “The world’s most nutritious foods.” http://www.bbc.com/future/story/20180126-the-100-most-nutritious-foods. Accessed Jan. 24, 2019.

4 ibid.

5 Rita Call. SixtyandMe.com. January 2019. “Five powerful reasons to give bone broth a try.” http://sixtyandme.com/5-powerful-reasons-to-give-bone-broth-a-try/. Accessed Jan. 24, 2019.

6 Allison Aubrey. NPR. Jan. 21, 2019. “You Don’t Have To Go No-Carb: Instead, Think Slow Carb.” https://www.npr.org/sections/thesalt/2019/01/21/686603016/you-dont-have-to-go-no-carb-instead-think-slow-carb. Accessed Jan. 24, 2019.

7 Jamie Ducharme. Time. Jan. 22, 2019. “The Surprising Way to Resist the Lure of Junk Food.” http://time.com/5506851/how-to-stop-eating-junk-food/. Accessed Jan. 24, 2019.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Drug prices continue upward climb as leaders seek solutions

In the first month of 2019, pharmaceutical companies have increased prices on more than 250 prescription drugs despite calls from the president and Congress to reduce drug costs.1 These hikes have evoked the ire of President Trump, who has pledged to reduce drug prices in the United States, which are higher than in most other developed nations.2

 

A study published in January in the journal Health Affairs showed that prices on brand-name oral prescription drugs increased by more than 9 percent annually from 2008 to 2016. During that same time frame, injectable drug prices rose more than 15 percent a year. Insulin doubled in price between 2012 and 2016, according to the Health Care Cost Institute.3

 

In more positive news, though drug price increases did continue for 2019, data from RxSavings Solutions, which helps health plans and employers find lower cost prescription medications, showed the overall number of price increases was down by about a third from 2018, when pharmaceutical companies raised prices on more than 400 prescription medications.4

 

As policymakers craft potential solutions, health care in general and drug prices in particular are variables that the average consumer simply cannot control. It’s up to each of us to create a strategy of combined savings and insurance vehicles to help pay for potential future health care expenses. If you’re concerned about how you’ll be able to manage health care expenses during retirement, we can help you consider your available options.

 

Drug manufacturers appear to have raised prices for reasons that go beyond simply recovering expenses. While the Health Affairs report found that some 2019 price increases were driven by innovation, most were increases to medications already in the market.5

 

Many industries generally rely on the free market to set prices – essentially charging what consumers are willing to pay based on supply and demand. However, in some cases when there are few competitors, there are few rules in place to prevent companies from raising prices across the board. In the case of health care, it also can mean that those who can’t afford treatments may be affected.

 

The American Medical Association’s website truthinrx.org explores the prescription drug marketplace, advocating for transparency in pricing. The site notes that even generic drugs – generally expected to be less expensive than name brand alternatives – aren’t immune to price increases. It offers the example of generic antibiotic tetracycline, which in 2012 was priced at pennies per 500 mg capsule but rose to more than $8 per 500 mg capsule in 2013.6 Another practice the site calls out among drug manufacturers is eschewing the expensive and time-consuming process of developing new drugs by instead acquiring existing drugs and raising their prices.7

 

It’s no secret that companies spend billions of dollars marketing medications, much of that aimed directly at physicians and medical facilities. Each year, health companies spend approximately $30 billion on marketing. Of that amount, about two thirds (68 percent) is targeted at persuading doctors and facilities to prescribe their drugs. That amount does not include the advertising targeted to consumers in television and magazine ads.8

 

While the Trump Administration has worked to negotiate with drug companies and published a plan to reduce drug prices, including potentially basing Medicare payments for some drugs on international pricing levels, thus far it appears to have had little impact. It may take legislative action to slow the trajectory of rising drug prices. In January, House Democrats proposed legislation designed to increase generic competition among patent-protected U.S. brand-name drugs deemed “excessively priced,” allow Medicare to directly negotiate with pharmaceutical companies for volume-based pricing, and enable American consumers to purchase lower-priced medications from Canada.9

 

Content prepared by Kara Stefan Communications.

 

1 Michael Erman. Reuters. “Drug companies greet 2019 with U.S. price hikes.” https://www.reuters.com/article/us-usa-drugpricing/drug-companies-greet-2019-with-u-s-price-hikes-idUSKCN1OW1GA. Accessed Jan. 29, 2019.

2 Dan Diamond, Adam Cancryn and Sarah Owermohle. Politico. Jan. 8, 2019. “Trump summons advisers to White House over drug price hikes.” https://www.politico.com/story/2019/01/08/trump-summons-advisers-drug-price-hikes-1068652. Accessed Jan. 17, 2019.

3 Alison Kodjak. NPR. Jan. 7, 2019. “Prescription Drug Costs Driven By Manufacturer Price Hikes, Not Innovation” https://www.npr.org/sections/health-shots/2019/01/07/682986630/prescription-drug-costs-driven-by-manufacturer-price-hikes-not-innovation. Accessed Jan. 17, 2019.

4 Michael Erman. Reuters. “Drug companies greet 2019 with U.S. price hikes.” https://www.reuters.com/article/us-usa-drugpricing/drug-companies-greet-2019-with-u-s-price-hikes-idUSKCN1OW1GA. Accessed Jan. 29, 2019.

5 Alison Kodjak. NPR. Jan. 7, 2019. “Prescription Drug Costs Driven By Manufacturer Price Hikes, Not Innovation” https://www.npr.org/sections/health-shots/2019/01/07/682986630/prescription-drug-costs-driven-by-manufacturer-price-hikes-not-innovation. Accessed Jan. 17, 2019.

6 TruthinRX.org. American Medical Association. 2019. “Drug prices in America are among the highest in the world. Who is pulling the levers on drug pricing?” https://truthinrx.org/price-hikes-secret-deals. Accessed Jan. 17, 2019.

7 Ibid.

8 Beth Mole. ARS Technica. Jan. 11, 2019. “Big Pharma shells out $20B each year to schmooze docs, $6B on drug ads.” https://arstechnica.com/science/2019/01/healthcare-industry-spends-30b-on-marketing-most-of-it-goes-to-doctors/. Accessed Jan. 17, 2019.

9 Ricardo Alonso-Zaldivar. Associated Press. Jan. 10, 2019. “Liberals dare Trump to back their bills lowering drug prices.” https://www.apnews.com/9d32fcda0f5944af9165306f6954cab3. Accessed Jan. 17, 2019.

 

 

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

 

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Country Getting Creative to Fund Infrastructure Changes

From politicians in Washington to residents whose cars are routinely damaged by potholes, perhaps the most agreed-upon issue in the U.S. is the country needs an infrastructure upgrade.

Frustrated by inaction at the national level, the president and CEO of the U.S. Chamber of Commerce recently announced $25,000 in cash prizes will be awarded to innovators who submit the most viable ideas for long-term, sustainable funding for infrastructure improvements. The competition is open to everyone, including students, business leaders and academics.1

Newly empowered House Democrats say repairing and replacing America’s crumbling infrastructure is one of their top priorities, as well as expanding the country’s broadband foundation.2

As the nation broadens its scope to national infrastructure, it’s a great reminder for each of us to look at our own. The road to and through retirement is paved by the financial strategies you put in place along the way. Contact us for a thorough review of your situation.

While infrastructure improvement has been a national talking point, the federal government owns only 8 percent of the country’s infrastructure and funds about 14 percent of it. The rest is managed evenly between state/local government and the private sector. However, the federal government regulates all major projects, whether national, local or privately funded and managed.3

In a break from how federal funds have been historically used to fund infrastructure projects, the Trump administration proposed the use of federal funds as an incentive for states to turn infrastructure projects into revenue-producing venues. The criteria in the competition for project funding includes innovation, effective use of technology, and social and economic return on investment.4

Creating infrastructure that essentially pays for itself (albeit through consumer household dollars) is one way to cut federal spending. According to a new study by the Reason Foundation, leasing existing toll roads, bridges, airports, seaports, water and wastewater facilities, and university parking systems to private partnerships could generate up to $885 billion for state and local governments to spend on new infrastructure projects.5

Despite the lack of national focus the past few years, there is some improvement on the infrastructure front. Compared to the 2013 report, the 2017 Infrastructure Report Card revealed slight improvements in the areas of hazardous waste, inland waterways, levees, ports, rail, schools and wastewater. Unfortunately, there was no score change in aviation, bridges, dams, drinking water, energy and roads. Parks, solid waste and transit actually declined. Overall, America’s cumulative grade remained a D+.6

According to a recent rating index, states with overall infrastructure in the most need of repair are Florida, Georgia and Minnesota. States in the best relative shape are Rhode Island, Hawaii and West Virginia. However, throughout the country, seven out of every 100 miles of roadway are reportedly in poor condition. Nine percent of bridges nationwide have been identified as structurally deficient, and 17 percent of dams are classified as presenting high-hazard potential.7

Content prepared by Kara Stefan Communications.

1 John Schultz. Logistics Management. Jan. 10, 2019. “U.S. Chamber head Donohue offering $25,000 for best infrastructure funding ideas.” https://www.logisticsmgmt.com/article/u.s._chamber_head_donohue_offering_25000_for_best_infrastructure_funding_id. Accessed Jan. 10, 2019.

2 Jacob Pramuk. CNBC. Jan. 3, 2019. “Nancy Pelosi and House Democrats take control — here are the policies they plan to pursue.” https://www.cnbc.com/2019/01/03/nancy-pelosi-and-democrats-take-house-majority-plan-to-check-trump.html. Accessed Jan. 11, 2019.

3 Knowledge@Wharton. Oct. 22, 2018. “Improving U.S. Infrastructure: Getting Past the ‘Coupon Effect.’” http://knowledge.wharton.upenn.edu/article/white-house-infrastructure-plan/. Accessed Jan. 10, 2019.

4 Ibid.

5 Inbound Leasing. Dec. 10, 2018. “U.S. Infrastructure Investment: A Private Matter?” https://www.inboundlogistics.com/cms/article/us-infrastructure-investment-a-private-matter/. Accessed Jan. 10, 2019.

6 American Society of Civil Engineers. “America’s Grades.” https://www.infrastructurereportcard.org/americas-grades/. Accessed Jan. 10, 2019

7 Samuel Stebbins. USA Today. Aug. 13, 2018. “Infrastructure spending: Which state is falling apart the worst?” https://www.usatoday.com/story/money/economy/2018/08/13/infrastructure-spending-states-that-are-falling-apart/37270513/. Accessed Jan. 10, 2019.

Our firm is not affiliated with the U.S. government or any governmental agency.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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U.S. Oil Production Fuels Worldwide Changes

 

In recent years, the scope of the oil market has changed. OPEC, headquartered in Vienna, Austria, was established in 1960 to unify the petroleum policies of its members. These 14 countries, mostly in Africa and the Middle East, are considered hotbeds for oil.1

 

However, the world’s two largest producers are the United States and Russia. Combined with OPEC member Saudi Arabia, the three produce more oil than all of the other OPEC members combined. The large amount of production results in excess supply and lower prices for consumers.

 

Moving forward, Saudi Arabia Crown Prince Mohammed Bin Salman is in favor of reducing production, so gas prices can rise and provide the revenues Saudi Arabia needs, while Donald Trump would prefer that prices remain low and Vladimir Putin seems indifferent.2

 

Oil prices were below $50 a barrel in early 2019, and the U.S. national average gas price was about $2.25 a gallon.3 Changes in gas prices tend to resonate with consumers because they’re so visible. Right now, a large automobile with below-average gas mileage doesn’t feel like much of a burden. But if prices rise, it hits home for consumers who suddenly must spend less on other goods just to fill up the family cars — and that can present a drag on overall economic growth.

 

It’s a lesson worth considering within our own household budget: The more we consistently save in some areas, the more we have to spend or save for others. If you’re looking for a sustainable way to generate more savings toward retirement, switching to a car with good gas mileage might not be a bad idea.

 

In the meantime, the United States’ goal to become less reliant on foreign oil is a test we may face in the near future. Hydraulic fracking helped make the U.S. the largest producer of crude oil in the world, and the International Energy Agency projects America’s oil production will equal that of Saudi Arabia and Russia combined within six years.

 

However, the news isn’t all positive. OPEC has opted to curb oil supplies to the U.S. in light of our increasing production and surplus inventory.4 The future of U.S. oil production threatens to destabilize our international partnerships, make the U.S. vulnerable to trade retaliation and generate more environmental concerns and climate change.5

 

Content prepared by Kara Stefan Communications.

 

1 OPEC. 2019. “Brief History.” https://www.opec.org/opec_web/en/about_us/24.htm. Accessed Jan. 4, 2019.

 

2 Julian Lee. Bloomberg. Nov. 18, 2018. “The Oil Price Is Now Controlled By Just Three Men.” https://www.bloomberg.com/opinion/articles/2018-11-18/bin-salman-trump-and-putin-control-the-oil-price-now. Accessed Jan. 4, 2019.

 

3 U.S. Energy Information Administration. Jan. 4, 2019. “Today in Energy.” https://www.eia.gov/todayinenergy/prices.php. Accessed Jan. 4, 2019.

 

4 Collin Eaton. Reuters. Jan. 3, 2019. “OPEC sends fewest oil cargoes to United States in at least five years.” https://www.reuters.com/article/us-usa-crude-imports-opec/opec-sends-fewest-oil-cargoes-to-united-states-in-at-least-five-years-idUSKCN1OX1N3. Accessed Jan. 4, 2019.

 

5 Justin Worland. Time. Jan. 3, 2019. “How An Oil Boom in West Texas Is Reshaping the World.” http://time.com/5492648/permian-oil-boom-west-texas/. Accessed Jan. 4, 2019.

 

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

 

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

 

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Customers Withdraw from In-Person Banking

A changing society has changed some of the ways customers and banks interact. For example, early efforts by brick-and-mortar banks to cut costs by promoting online transactions and electronic statements gave way to a new wave of competition from internet-based banks.1 This also severed some of the close relationships longtime customers enjoyed with familiar tellers and loan officers.

Another trend is small, community storefronts giving way to large institutions. Since legislation permitted banks to cross state lines and merge into large nationwide corporations, some have chosen to focus more on serving the needs of the masses.

Independent financial professionals and insurance agents remain focused on the needs of each individual client. The strategies we provide are never the same for any two clients, because your unique situation can’t be boiled down to a single number or a nationwide trend.

Banks are beginning to adopt changing philosophies to reconnect with lost customers. For example, Capital One’s new urban “café” branches are designed to appeal to hip, coffee-connoisseur millennials, with bright and open café-style branches where customers can purchase coffee and baked goods, hang out indefinitely and casually seek guidance.2

While this approach may spark a revival of in-person banking, for the most part, transactions are likely to continue to shift online. Branches may start operating as more of a consultative office, much like going in for a visit with your lawyer or accountant. As locations consolidate, the drive to the nearest branch could become longer, adding to the appeal of making simple deposits or withdrawals online.3

According to a new Digital Banking Report, banks in 2019 are expected to use more data to build individual customer profiles, as well as increased use of “box branches” — a standalone, secure booth where one customer at a time can enter to conduct digital financial transactions.4

Content prepared by Kara Stefan Communications.

1 Rob Parker-Cole. ITProPortal.com. Dec. 28, 2018. “Banking disrupted: Three tips to help banks adapt.” https://www.itproportal.com/features/banking-disrupted-three-tips-to-help-banks-adapt/. Accessed Dec. 31, 2018.

2 Tanza Loudenback. Business Insider. Feb. 9, 2017. “Capital One is trying to curry favor with millennials with cafés around the US offering free Wi-Fi, local coffee and food, and complimentary money coaching.” https://www.businessinsider.com/inside-capital-one-cafe-for-millennials-2017-2. Accessed Dec. 31, 2018.

3 Eric Reed. TheStreet.com. Feb. 15, 2018. “How to Make the Most Money From Your Bank in 2018.” https://www.thestreet.com/story/14489253/1/how-to-make-the-most-money-from-your-bank-in-2018.html. Accessed Dec. 31, 2018.

4 Jim Marous. The Financial Brand. Dec. 3, 2018. “Five Innovation Trends That Will Define Banking in 2019.” https://thefinancialbrand.com/77869/innovation-trends-banking-ai-api-personalization-payments/. Accessed Dec. 31, 2018.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Decreasing Benefits Contribute to Retiree Bankruptcy

For most of the 20th century, it was common for employers and unions to sponsor health care insurance for retired workers, which helped pay for some or all of Medicare’s cost-sharing requirements and deductibles. However, this trend reversed sharply in the mid-1990s. A survey by the Society for Human Resource Management found that only 19 percent of U.S. employers still offer retiree health benefits.1 

Many companies that do continue to offer retiree health coverage have curbed cost-sharing and benefits by charging higher premiums or requiring higher deductibles and copays. This cutback in benefits for retirees contributes to the current retirement crisis as cost burdens increasingly shift to retirees.

If you’re concerned about potential medical bills because you live on a fixed income or lack substantial savings, give us a call. We can look at your current situation and recommend a customized insurance strategy designed to fit your needs.

A recent report revealed individuals 65 and older are filing for bankruptcy at a rate nearly three times higher than in the early 1990s. Those 75 and older are filing at a rate of nearly 10 times more. This recent surge in retiree bankruptcy filings is being driven primarily by the greater burden of providing for one’s own income and paying more health care bills during retirement.2

Retirees who are not eligible for an employer-subsidized retiree health plan typically enroll in original Medicare or a Medicare Advantage plan.However, among the greatest health care costs for retirees is the rising price of prescription drugs. Medicare Part D plans, which cover prescription drugs, are sold by private insurers. Premiums vary based on the level and extent of coverage, but the average monthly premium in 2019 is $32.50. The average annual deductible is $415.3

The Bipartisan Budget Act of 2018 reduced the cost of brand-name medications during the coverage gap starting in 2019. That means Medicare beneficiaries are now responsible for paying their deductible, if applicable, and then any copays or coinsurance until they reach a total of $3,820 in prescription drug outlay. After that, the beneficiary will pay 25 percent of the cost of name-brand prescription drugs (37 percent of the cost of generic drugs) until reaching an annual out-of-pocket total of $5,100, after which he or she will pay 5 percent of all drug costs until the end of the plan year.4

When Part D plans were first established in 2006, beneficiaries paid 100 percent of the cost of their brand-name drugs. Under the Affordable Care Act (ACA), the coverage-gap cost was slowly reduced each year. However, it’s worth noting a U.S. District Court in Texas recently ruled to reverse the ACA drug plan provision. If the ruling holds up after appeal, beneficiaries would go back to paying 100 percent of drug costs when they fall into the coverage gap.5

Content prepared by Kara Stefan Communications.

1 Society for Human Resource Management. June 2018. “2018 Employee Benefits.” https://www.shrm.org/hr-today/trends-and-forecasting/research-and-surveys/pages/2018-employee-benefits.aspx. Accessed Dec. 30, 2018.

2 Darwin Bayston. Wealth Management. Oct. 1, 2018. “Taking on the Ugliest Trend in Retirement.” https://www.wealthmanagement.com/retirement-planning/taking-ugliest-trend-retirement. Accessed Dec. 30, 2018.

3 National Council on Aging. 2018. “What Is Medicare Part D?” https://www.ncoa.org/economic-security/benefits/prescriptions/part-d/. Accessed Dec. 30, 2018.

4 MedicareFAQ. 2018. “Medicare Part D Donut Hole will End in 2019.” https://www.medicarefaq.com/faqs/medicare-part-d-donut-hole-will-end-in-2019/?eiid=1448063140.1546215654. Accessed Dec. 30, 2018.

5 Howard Gleckman. Forbes. Dec. 17, 2018. “What Striking Down The Affordable Care Act Would Mean For Seniors.” https://www.forbes.com/sites/howardgleckman/2018/12/17/what-striking-down-the-affordable-care-act-would-mean-for-seniors/. Accessed Dec. 30, 2018.

Our firm is not affiliated with the U.S. government or any governmental agency.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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