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Drug Prices: The Power of a Celebrity Tweet

When drug manufacturer Mylan increased the list price of EpiPen last summer, it suffered the wrath of celebrity backlash. Actress Sarah Jessica Parker publicly criticized the company for raising the price of its emergency allergy treatment to $608.1 

EpiPen, which has been around for decades, cost less than $100 when Mylan originally acquired the product in 2007. The company declined to comment on the price hike, but cited high-deductible health plans as a reason consumers now pay so much out-of-pocket for drugs.2 

If you think health care expenses are high now, imagine what they could be if they continue on this trajectory. One recent study asserted that, because health care inflation is dramatically higher than regular inflation, someone who retires this year may encounter $33,000 or more in total health care expenses during retirement than someone who retired in 2015.3 

When planning for retirement, it’s important to factor in the potential increase of medical costs and other expenses, in addition to possible reduced expenses,  such as mortgage payments and work commuting. We can help you create a retirement income strategy through the use of insurance products that you can feel confident about. 

While increasing pharmaceutical prices aren’t a new controversy, Parker’s celebrity status may have helped bring the issue into mainstream discussion. She posted on Instagram that she would no longer purchase the company’s products, urging them to “lower the cost to be more affordable for whom it is a life-saving necessity.”4 

The new-found spotlight on drug prices has generated some pretty interesting revelations about the industry. For example, because the process for developing new drugs and getting them approved by the FDA is so costly and time-consuming, some drug makers routinely look at their product line to see which ones are in a market that will tolerate a substantial price increase.5 

Unfortunately, one of those markets is “orphan drugs.” “Orphan drug” is the category name of medications developed for rare diseases, specifically those that affect fewer than 200,000 people. Because of the smaller market, these drugs tend to be quite expensive. In fact, legislation passed in 1983 was designed to encourage drug makers to develop treatments for such rare diseases. However, the market has become so lucrative that it threatens to increase insurance premiums for the broader population.6 

Regardless of what happens in the drug industry, what is important is how each of us can prepare for health care expenses and take advantage of cost-reduction strategies where available. To this end, the following are some basic tips to consider when a prescription drug is necessary:7 

  • Ask for a generic drug when prescribed a name brand drug
  • Ask your physician if there is a single medication that can address ailments for which you take multiple pills
  • Before you get your prescription filled, check with your insurance to see where the drug lies in your plan’s drug formulary. If it’s in a higher tier, print out the formulary and show it to your physician to see if there’s a lower-tier option that would work as well. Your pharmacist, in consultation with your doctor, may be able to help with this as well.
  • Use a mail-order plan for common maintenance medications
  • Make sure the pharmacy you go to is within your plan’s network
  • Check the drug manufacturer’s website for discount coupons 

 

Content prepared by Kara Stefan Communications. 

1 CBS News. Aug. 26, 2016. “Sarah Jessica Parker cuts ties with EpiPen over price hikes.” http://www.cbsnews.com/news/sarah-jessica-parker-cuts-ties-with-epipen-over-price-hikes/. Accessed Oct. 3, 2016.
2 Tara Parker-Poe and Rachel Rabkin Peachman. The New York Times. Aug. 22, 2016. “EpiPen Price Rise Sparks Concern for Allergy Sufferers.” http://well.blogs.nytimes.com/2016/08/22/epipen-price-rise-sparks-concern-for-allergy-sufferers/?_r=0. Accessed Oct. 8, 2016.
3 HealthView Services. Sept. 21, 2016. “HealthView Services: 2016 Retirement Health Care Costs Data Report.” http://www.hvsfinancial.com/PublicFiles/2016_RHCC_Data_Report.pdf. Accessed Oct. 3, 2016.
4 CBS News. Aug. 26, 2016. “Sarah Jessica Parker cuts ties with EpiPen over price hikes.” http://www.cbsnews.com/news/sarah-jessica-parker-cuts-ties-with-epipen-over-price-hikes/. Accessed Oct. 3, 2016.
5 Knowledge@Wharton. Aug. 26, 2016. “Will Mylan’s EpiPen Episode Help Curb Pharmaceutical Price Gouging?” http://knowledge.wharton.upenn.edu/article/why-competition-failed-to-regulate-the-cost-of-epipen/. Accessed Oct. 10, 2016.
6 Carolyn Y. Johnson. The Washington Post. Aug. 4, 2016. “High prices make once-neglected ‘orphan’ drugs a booming business.” https://www.washingtonpost.com/business/economy/high-prices-make-once-neglected-orphan-drugs-a-booming-business/2016/08/04/539d0968-1e10-11e6-9c81-4be1c14fb8c8_story.html. Accessed Oct. 13, 2016.
7 Kara Brandeisky. Time. Feb. 29, 2016. “13 Smart Ways to Save on Prescription Drugs.” http://time.com/money/4229587/save-money-prescription-drug-costs/. Accessed Oct. 13, 2016. 

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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Opposites Attract: Couple Finances

It’s very common for a married couple to have vastly different financial personalities. One may be frugal and the other a big spender. As we all know, money can be the source of some pretty big challenges in a relationship. 

In fact, a recent survey revealed that 73 percent of couples said their financial approach differed from their partner’s. Thirty percent of couples argue over finances at least once a month, and 5 percent admit to having their own individual account that their other half doesn’t know about.1 

While you could say arguing is just another form of communication, there may be better ways of conveying money matters in a relationship. For example, many couples set a maximum amount that each partner feels he or she can spend without consulting the other. This survey discovered the average sum is $400. However, that amount is lower with millennial couples ($100) and higher among baby boomers ($500). Interestingly, 21 percent of couples don’t know how much their significant other has in his or her personal retirement account, such as an employer 401(k).2 

Traditionally, employers have provided the means for retirement income or savings vehicles but not offered much guidance in preparing for retirement. While more are making a concerted effort to help workers understand how much income they’ll need during retirement through various tools and resources,3 it’s important to work with your financial professional to build a retirement income strategy tailored specifically to your household’s needs and objectives. 

If you and your significant other haven’t really thought about your different approach to finances, an assessment might help alleviate some stressful situations where money is concerned. While it’s not an exact science, you also may consider taking any of the many free online quizzes to see how the two of you differ in regard to your financial personality.4 

Older couples may be less prone to argue about how to spend their money, but that doesn’t mean they’re any more compatible in their financial personalities or that they experience any less money-related anxiety. It often means they’ve settled into their respective roles and let the status quo take its course. However, it’s important to discuss upcoming events such as when to retire, where to live and how much money may be needed to maintain their lifestyle in retirement.5 

However, couples shouldn’t be so focused on retirement finances that they don’t account for the possibility of new adventures. One of the first determinations is to ask yourself — how do you want to spend your retirement? Where do you want to live or travel?6 What sort of activities will you want to pursue? Are there any big-ticket items, such as starting a new business venture? All of these questions help you determine the amount of income you’ll need, so it’s a good place to start.7 

Content prepared by Kara Stefan Communications. 

1 Suzanne Woolley. Bloomberg. Sept. 21, 2016. “The Secret to a Good Marriage Might Be Keeping Small Financial Secrets.” http://www.bloomberg.com/news/articles/2016-09-21/the-secret-to-a-good-marriage-might-be-keeping-small-financial-secrets. Accessed Sept. 30, 2016.
2 Ibid.
3 Aon Hewitt. 2016. “2016 Hot Topics in Retirement and Financial Well Being.” http://www.aon.com/attachments/human-capital-consulting/2016-hot-topics-retirement-financial-wellbeing-report.pdf. Accessed Sept. 30, 2016.
4 Maggie McGrath. Forbes. March 4, 2016. “Myers-Briggs Your Wallet: Learning Your Financial Personality Could Be the Key to Fixing Your Money Woes.” http://www.forbes.com/sites/maggiemcgrath/2016/03/04/myers-briggs-your-wallet-learning-your-financial-personality-could-be-the-key-to-fixing-your-money-woes/print/. Accessed Sept. 23, 2016.
5 Eleanor Laise. Kiplinger. May 2016. “Older Couples Face Money Battles.” http://www.kiplinger.com/article/retirement/T037-C000-S004-older-couples-face-money-battles.html. Accessed Sept. 23, 2016.
6 Jane Bennet Clark. Kiplinger’s Personal Finance. September 2016. “How Couples Can Retire in Harmony.” http://www.kiplinger.com/article/retirement/T047-C022-S002-how-couples-can-retire-in-harmony.html?rss_source=rss. Accessed Sept. 30, 2016.
7 John Wasik. The New York Times. April 22, 2016. “Thinking Beyond Money in Retirement.” http://www.nytimes.com/2016/04/23/your-money/thinking-beyond-money-in-retirement.html. Accessed Sept. 30, 2016. 

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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Being Wise in a Smart World

These days, it seems like everything’s getting smarter. Smart phones, smart cars, smart appliances, smart technology. 

Maybe we take things like this for granted, but you can start typing any phrase into Google, and the computer will finish it for you. That’s pretty darn smart. 

Unfortunately, our increasingly smart world creates a host of new problems that accompany all the advantages. For example, these innovations are more vulnerable to security and privacy hacking1 and could be more costly to maintain and repair. 

After all, who do you call when you can’t turn off your smart oven remotely with your cellphone? Your cellphone carrier, internet provider or an appliance repair company?

In New York City, they’ve launched smart sidewalks — kiosks where passers-by can charge their phones or look up information on a tablet with internet access.2 But like many new innovations, there are unintended consequences, like people blasting music from the computer at all hours and even looking up inappropriate content at city intersections.3 

Unfortunately, even members of the younger generation who have grown up with smart technology, are graduating college and finding it difficult to land jobs that utilize all this smart technology. Some have lamented that recent graduates lack the knowledge and skills they need to land a job and succeed at their new careers.4 

You would hope some things, like your oven and your cellphone, wouldn’t require professional assistance. Your finances, however, may be another matter. As a financial professional, we are here to help you create a retirement income strategy through the use of insurance products that will help you work toward your long-term retirement goals. 

Content prepared by Kara Stefan Communications. 

1 Amanda Razani. Readwrite. July 14, 2016. “IoT and problems: The issues that bedevil any new tech.” http://readwrite.com/2016/07/14/iot-and-problems-the-concerns-that-arise-with-iot-pt2/. Accessed Sept. 23, 2016.
2 Amanda Razani. Readwrite. July 20, 2016. “New York’s sidewalks get a smart upgrade.” http://readwrite.com/2016/07/20/new-yorks-sidewalks-get-a-smart-upgrade-ct4/. Accessed Sept. 23, 2016.
3 Joshua Brustein. Bloomberg. Sept. 14, 2016. “Building a Smart City? Have You Thought About Porn and Privacy?” http://www.bloomberg.com/news/articles/2016-09-15/building-a-smart-city-have-you-thought-about-porn-and-privacy. Accessed Sept. 23, 2016.
4 Karsten Strauss. Forbes. May 17, 2016. “These Are The Skills Bosses Say New College Grads Do Not Have.” http://www.forbes.com/sites/karstenstrauss/2016/05/17/these-are-the-skills-bosses-say-new-college-grads-do-not-have/#c6ac420596eb. Accessed Oct. 25, 2016. 

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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Jobs After Age 55

The good news is 62- to 64-year-olds experienced the largest increase in jobs between 2007 and 2014.1 The not-so-good news is that many of those jobs are not of the upscale, high-paying variety.2 

New research from the Center for Retirement Research at Boston College offers insights into the type of work that older people are securing today:3  

·     -    The jobs are high on service and low on physical labor

·     -    Service jobs: managers, sales supervisors, accountants, real estate sales, property management

·     -    Low-skilled jobs: truck drivers, janitors, nursing aides, child care, retail, cab driver

·     -    Valued skillsets: dependability, outdoor work

·     -    Jobs that pay around 10 percent less than those of younger workers

A survey of households and individuals from the latest census found that, between 2008 and 2012, older workers (62+) with a college degree had less than a 50 percent chance of finding work, while those without a college degree had only a 35 percent chance.4 

During an economic downturn, it’s not uncommon for employers to lay off employees, and many older workers end up getting more pink slips than others. One reason may be because they tend to earn more, so some workplaces may be inclined to hire younger, lower-paid employees to improve profit margins.5 

While this may sound like age discrimination, lawsuits along those lines have become harder to win. In 2009, a court ruling made it more difficult for workers to sue for age discrimination. Plaintiffs must now prove that advanced age was the main reason for being let go — not just a contributing factor.6 

Even aging workers who continue working at the same company will likely find their income doesn’t increase as much as it did when they were younger. A 2015 Federal Reserve study found that, from ages 45 to 55, wages decrease by 9 percent; they then drop another 9 percent from ages 55 to 65.7 

The job situation may be more challenging for women, in part because they tend to live longer than their husbands and are therefore more likely to spend some part of their retirement living on one income. According to U.S. Labor Department projections, about one in seven women work past age 65, and within eight years that number will rise to nearly one in five.8 

Working longer isn’t all bad, from a financial or social standpoint. It enables people to save longer, give their retirement assets more opportunity to accumulate, decreases how long they’ll have to live on their retirement savings and enables them to save money via employer-based health insurance.9 Plus, work provides cognitive and social engagement, which for many is a lot more fun than sitting at home or even traveling alone. 

Content prepared by Kara Stefan Communications. 

1 Quoctrung Bui. The New York Times. Aug. 18, 2016. “More Older People Are Finding Work, but What Kind?” http://www.nytimes.com/2016/08/18/upshot/as-more-older-people-seek-work-they-are-put-into-old-person-jobs.html?_r=0. Accessed Sept. 19, 2016.
2 Ibid.
3 Ibid.
4 Ibid.
5 Bob Sullivan. CNBC. July 7, 2016. “For older workers, getting a new job is a crapshoot.” http://www.cnbc.com/2016/07/07/for-older-workers-getting-a-new-job-is-a-crapshoot.html. Accessed Sept. 19, 2016.
6 Ibid.
7 Teresa Ghilarducci. PBS. Jan. 14, 2016. “Why women over 50 can’t find jobs.” http://www.pbs.org/newshour/making-sense/women-over-50-face-cant-find-jobs/. Accessed Sept. 19, 2016.
8 Nick Timiraos. The Wall Street Journal. Feb. 22, 2016. “How Older Women Are Reshaping U.S. Job Market.” http://www.wsj.com/articles/older-women-reshape-u-s-job-market-1456192536. Accessed Sept. 19, 2016.9 Kerry Han
non. Forbes. July 3, 2016. “5 Tips To Help Women Work Longer.”
http://www.forbes.com/sites/nextavenue/2016/07/03/5-tips-to-help-women-work-longer/#74c7bf943156. Accessed Sept. 19, 2016.

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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