Shortlink

A 100-Year Lifespan: Ways to Help Increase Enjoyment

The average life expectancy of a baby born in the U.S. today is 80 years. However, this prediction assumes prevailing patterns of mortality at the time of birth stay the same throughout a person’s life.1

In reality, patterns of mortality improve over time thanks to discoveries and innovations in nutrition and medical science. If you extrapolate the data to represent the same pace of mortality improvement in the future, people up to age 30 today can reasonably expect to live to an average age of 100.2

However, just as important as how long you live is how well you live. Below are some ideas on steps you can take to help ensure you enjoy your retirement years.  

One way to prepare for an active retirement is to engage in work-life balance early in life. Many people work long hours and don’t take enough vacation time. Over time, this can lead to mental and physical exhaustion. If we don’t take care of ourselves when we’re younger, we have less chance of enjoying a higher quality of life when we’re older.

Or, consider your perspective – are you pursuing your own happiness or trying to find meaning in life? Studies have demonstrated that the pursuit of happiness may not be as good for our well-being as the pursuit of a more meaningful life. In other words, being directed and motivated by valued life goals, which often can take more effort and cause more stress, may be more rewarding. To illustrate, consider the rewards of raising children versus embarking on a series of exotic vacations. Researchers have found that, over the long term, people who pursued more meaning and purpose were more deeply satisfied than those chasing temporary happiness.3

Another study even found a correlation between greater engagement in day-to-day life with a higher degree of financial success, possibly because this type of person tends to place a high value on pursuing long-term goals.4

Exercise is also key. According to the Centers for Disease Control and Prevention, about 32 percent of older adults do not engage in any physical exercise. Understandably, people who don’t prioritize exercise when they’re younger are not likely do so in retirement, so it’s important to make it a habit early on.5

It’s also important to choose activities you can continue as you age. Classes growing in popularity among the over-50 set include dance, strength training, gentle yoga, “gentle stretch,” “Pilates fusion,” ballet barre and tai chi. According to the American College of Sports Medicine, programs for older adults are among the top 20 fitness trends for 2017.6

Retirees may be familiar with the SilverSneakers program, celebrating its 25th anniversary. The program is free for adults over age 65 who are covered by Medicare Advantage, Medicare Supplement and many other plans.7

 In addition to things you should do to enrich a 100-year life, there are things that would make it less enjoyable. One of those things is dementia. While there are many risk factors for dementia, including age, alcohol use, smoking, diabetes, hypertension and genetics, a recent study discovered a few other common triggers that can increase the risk of cognitive decline:8

  • Taking anticholinergic drugs, which includes over-the-counter sleep aids, sedating allergy meds (e.g., Benadryl), sedating pain meds (e.g., Tylenol PM) and prescription meds such as some antidepressants and urinary incontinence treatments. The study also found that once people stop taking these meds, their risk dropped back to normal levels.
  • Lack of vitamin D
  • Heartburn medications with proton pump inhibitors (PPIs) such as Prilosec and Prevacid (complete list here)

We can help you prepare for longer life expectancies by utilizing insurance products within your overall retirement income strategy. Please feel free to contact us to discuss how we can help.

Content prepared by Kara Stefan Communications

1 Peter Vanham. World Economic Forum. Sept. 15, 2016. “You’ll Probably Live to Be 100. Here’s How You Need To Prepare For It.” https://www.weforum.org/agenda/2016/09/you-ll-probably-live-to-be-100-here-s-how-you-need-to-prepare-for-it/. Accessed March 3, 2017.

2 Ibid.

3 Emily Esfahani Smith and Jennifer Aaker. New York Magazine. Dec. 30, 2016. “In 2017, Pursue Meaning Instead of Happiness.” http://nymag.com/scienceofus/2016/12/in-2017-pursue-meaning-instead-of-happiness.html. Accessed March 3, 2017.

4 Drake Baer. New York Magazine. Jan. 4, 2017. “Living with Purpose Yields a Longer Life and Higher Income.” http://nymag.com/scienceofus/2017/01/living-with-purpose-yields-a-longer-life-and-higher-income.html. Accessed March 3, 2017.

5 Lynn Langway. Next Avenue. Jan. 30, 2017. “Boomers Took Fitness and Made It Their Own.” http://www.nextavenue.org/boomers-fitness-trends/. Accessed March 3, 2017.

6 Ibid.

7 Ibid.

8 Beth Levine. Next Avenue. May 25, 2016. “3 Surprising Things That Raise Your Dementia Risk.” http://www.nextavenue.org/3-surprising-things-raise-dementia-risk/. Accessed March 3, 2017.

 

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.

Shortlink

The Power of Mindfulness

It seems everywhere you turn these days, from news shows to news articles to local advertisements, there’s this idea of promoting “mindfulness” in our day-to-day lives. Mindfulness is generally accepted as focusing one’s mental state on the present moment, being completely aware of all elements around us.

Some financial professionals have expanded this idea of mindfulness to financial management. In an effort to help achieve this, some people practice a no-spending day, no-spending week or no-spending month. By avoiding expenses at all costs, we are forced to assess if and why we need to make certain purchases.1 For example, if you go into a store for one item, you shouldn’t leave with six more. Likewise, you might find you end up consuming all of the canned foods in your pantry before you feel the need to buy more.

Recognizing the difference between wants and needs is probably the biggest benefit to conducting a no-spend day.2 It’s also a good way to allocate your retirement income streams to help ensure your money doesn’t run out. In other words, you could designate steady and reliable income streams (such as Social Security, a pension or an annuity) for necessities such as food and utilities in retirement, while any other variable income can be used to pay for occasional indulgences.

There’s a growing body of research that supports this idea that mindfulness-focused activities, such as meditation and yoga, can help decrease anxiety, depression, stress and pain, as well as help improve general health, mental health and quality of life. In fact, one study concluded that the impact of ongoing mindfulness activities was both significant and long term compared to taking a short-term vacation which, at the outset, was very successful at relieving stress.3

Neuroscience studies also have correlated the impact of aerobic exercise on cognitive clarity. In fact, vigorous exercise has been identified as the only known trigger to create new neurons in the brain. These newly produced neurons appear in parts of the brain associated with learning, memory, concentration and time management.4

When comparing brain scans of young-adult cross-country runners to young adults who don’t engage in regular physical activity, scientists found that overall, the runners demonstrated greater functional connectivity for activities such as planning and decision-making.5

On the surface, it may seem that the older we get, the less sharp our minds become. But alas, there also are studies that demonstrate more mature minds benefit from “crystallized intelligence.” This represents the knowledge and data that we have accumulated over decades of work and life experience. Older workers in particular can counteract age-related cognitive lag by relying on this foundation of experience to troubleshoot problems and innovate new solutions on the job.6

Some educators believe that the medical profession should take this new focus on mindfulness into consideration, not just as a means to help patients cope with health conditions but also to help physicians become better at their jobs.

Doctors are sometimes guilty of taking a set of symptoms at face value and settling on an incorrect diagnosis because they are not tuned in to other symptoms or patient data that may have bearing. Medicine is an inexact science that takes years of experience to become adept at recognizing a wide array of conditions, yet it is equally important not to let that experience and confidence close the mind to other possibilities.

This is where the practice of mindfulness can help physicians become more attuned to each patient’s full array of symptoms and their own biases. To date, some experts believe a missing ingredient in medical education and medical practice are courses or workshops that teach physicians the practice and impact of mindfulness.7 This has become even more critical now that health care delivery has become more of a volume and administrative business with less time spent with patients.

Are you practicing mindfulness in the various areas of your life? Please give us a call if we can help you be more mindful of your current financial situation and long-term retirement income goals.

1 Maggie McGrath. Forbes. March 8, 2016. “Turbo-Charge Your Finances with the Power of Mindful Spending.” http://www.forbes.com/sites/maggiemcgrath/2016/03/08/turbo-charge-your-finances-with-the-power-of-mindful-spending/#2eba22013796. Accessed Feb. 21, 2017.

2 Ibid.

3 Monique Tello. Harvard Health Publications. Oct. 27, 2016. “Regular meditation more beneficial than vacation.” http://www.health.harvard.edu/blog/relaxation-benefits-meditation-stronger-relaxation-benefits-taking-vacation-2016102710532. Accessed Feb. 21, 2017.

4 Melissa Dahl. New York Magazine. April 21, 2016. “How Neuroscientists Explain the Mind-Clearing Magic of Running.” http://nymag.com/scienceofus/2016/04/how-neuroscientists-explain-the-mind-clearing-magic-of-running.html. Accessed Feb. 21, 2017.

5 Alexis Blue. World Economic Forum. Dec. 19, 2016. “Want to give your brain a boost? Running may be the answer.” https://www.weforum.org/agenda/2016/12/running-isnt-just-good-for-your-fitness-it-could-give-your-brain-a-boost. Accessed Feb. 21, 2017.

6 Kim Blanton. Center for Retirement Research at Boston College. Dec. 8, 2016. “Inside the Minds of Older Workers.” http://squaredawayblog.bc.edu/squared-away/inside-the-minds-of-older-workers/. Accessed Feb. 21, 2017.

7 Knowledge@Wharton. Feb. 16, 2017. “How Mindfulness Can Lead to Better Health Care Outcomes.” http://knowledge.wharton.upenn.edu/article/how-mindfulness-can-lead-to-better-health-care-outcomes/. Accessed Feb. 21, 2017.

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.

Shortlink

Health Tips from Around the World

These days, it’s difficult to tell if America is still the greatest country in the world or one that has slipped from its pedestal. Perhaps it depends upon the measuring criteria. It is widely documented that the U.S. spends more on health care than any other country, with a total bill of $3.2 trillion last year.1

Despite this tremendous investment in health care, an analysis of 14 developed nations showed life expectancies for people at age 65 are shorter in the United States. American women ranked last in longevity among the 14 developed countries, and men were second to last. Some experts suggest this is due to universal health care and more generous retirement benefits offered in other developed countries.2

Cost, particularly during retirement, may be a factor in how well health is maintained during the later years in life. If you’re considering creating a retirement income strategy that includes planning for potentially increasing health care costs in retirement, we can introduce you to various insurance product options.

While the federal government considers different ways to reform America’s health care delivery and payment system, it’s worth considering what other countries do to produce better results. On an individual basis, we can each learn new ways of managing our own health by considering tips from other countries.

For example, the Dutch are big on bicycling. The average citizen bikes more than 600 miles a year — not just for recreation, but also to and from work. As a result of this constant source of exercise, fewer call in sick to work, and studies show that bikers tend to have more energy and greater power of concentration than non-bikers.3

The Chinese practice Taoism, which involves taking mental and physical timeouts throughout the day to breathe deeply and reflect quietly. This philosophy is one of the basic tenets of today’s cognitive therapy that is used to treat depression, anxiety, stress, trauma and even chronic pain.4

In Finland, one of the national pastimes is relaxing in a sauna, which is believed to boost the immune system and cardiovascular endurance. The country boasts more than one sauna per every five people.5

Chopsticks used in many Asian cultures are known to slow down the pace of eating, which not only helps the body’s digestive system but tends to reduce the amount of food consumed.6

Yoga is a popular activity in India. Studies show that practicing yoga on a regular basis can improve circulation, flexibility, strength, posture and help clear the mind, reduce stress, ease pain and boost immunity. Another positive health influence in India is the use of various spices and herbs, including turmeric, ginger, chili peppers, saffron and cardamom.7

The French are considered somewhat of a mystery for their longevity and relative good health considering their love of wine, cheese and rich sauces. However, experts say they tend to stay slim because they eat small portions over long meals, resist snacking and stop eating when they feel full.8

One author has engaged in a project called Blue Zones, attempting to determine patterns among locales throughout the world that have high concentrations of centenarians, people who live to 100. In general terms, the most common pattern appears to be to “drink coffee for breakfast, tea in the afternoon, wine at 5 p.m.”9

Content prepared by Kara Stefan Communications

1 Carolyn Y. Johnson. The Washington Post. Dec. 27, 2016. “The U.S. spends more on health care than any other country. Here’s what we’re buying.” https://www.washingtonpost.com/news/wonk/wp/2016/12/27/the-u-s-spends-more-on-health-care-than-any-other-country-heres-what-were-buying/?utm_term=.b4bf88dc0213. Accessed Feb. 12, 2017.

2 Financial Planning. Jan. 11, 2017. “How long do U.S. retirees live compared to peers in other countries?” http://www.financial-planning.com/news/how-long-do-us-retirees-live-compared-to-peers-in-other-countries. Accessed Feb. 12, 2017.

3 P. Murali Doraiswamy, M.D.. Thrive Global. Nov. 30, 2016. “7 Well-Being Tips From Around the World… and the Surprising Science Behind Them.” https://journal.thriveglobal.com/7-well-being-tips-from-around-the-world-and-the-surprising-science-behind-them-b06aedeb8ac6#.3fk09m8ew. Accessed Feb. 12, 2017.

4 Ibid.

5 Ibid.

6 Integrative Nutrition. April 7, 2015. “7 Health Tips From Around the World.” http://www.integrativenutrition.com/blog/2015/04/7-health-tips-from-around-the-world. Accessed Feb. 12, 2017.

Jennifer Mulder. The Health Sessions. 2017. “The 8 Best Health Tips From Around the World.” http://thehealthsessions.com/best-health-tips-from-around-the-world/. Accessed Feb. 12, 2017.

8 Naomi Coleman. DailyMail. 2017. “Diet tips from around the world.” http://www.dailymail.co.uk/health/article-64420/Diet-tips-world.html. Accessed Feb. 12, 2017.

9 Eliza Barclay. NPR. Apr. 28, 2016. “Tea Tuesdays: Tea-Drinking Tips For A Longer Life.” http://www.npr.org/sections/thesalt/2015/04/28/400156651/tea-tuesdays-tea-drinking-tips-for-a-longer-life. Accessed Feb. 12, 2017.

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.

Shortlink

Medicare Reform Outlook: Uncertain

With a new administration in the nation’s highest office, there is growing debate about Medicare reform.

The federal program, which helps provide health insurance to those over 65 and certain younger people with disabilities, is partially funded by participant premiums and a 1.45 percent payroll tax, matched by employers. Yet, it routinely exceeds its funding sources, according to researcher Philip Moeller.1

Lawmakers, lobbyists and entities have set forth various proposals to modernize Medicare into a program that could essentially pay for itself. One recommendation is a premium support system, in which the federal government would pay a set amount for each Medicare beneficiary toward the purchase of a health insurance plan; this is often referred to as a defined contribution or voucher approach.2

Whether the Medicare program changes, we’re prepared to help you make adjustments to your retirement income strategy to help with future health care expenses; give us a call.

Yet, the outlook on possible Medicare changes is uncertain as different voices compete on how to fix the program. One of the most prominent advocates of Medicare reform, House Speaker Paul Ryan, has set forth a plan that provides premium support, guaranteed coverage options, competitive bidding among plans and higher assistance for seniors with lower incomes or greater health care needs.3

The Committee for Economic Development has proposed similar reform incentives to expand competition among Medicare Advantage plans. Under the committee plan, seniors would receive a geographically benchmarked premium subsidy and pay for the balance of Advantage plans based on the coverage they prefer among a range of competitive options.4

As Congress considers reforming health care for the entire nation, some of the latest proposals include many of the Medicare provisions already in force through the Affordable Care Act. These include preventative screenings for certain conditions and penalizing hospitals for poor-quality care while rewarding providers for care that results in improved health outcomes.5

Despite increasing calls for Medicare reform by the Republican party, the newly installed president campaigned on a platform to leave the program as is.6 Moving forward, whether this issue heats up as a party divider remains to be seen.

Content prepared by Kara Stefan Communications

1 Philip Moeller. PBS. Nov. 16, 2016. “Column: Who’s paying the true cost of Medicare?” http://www.pbs.org/newshour/making-sense/column-whos-paying-the-true-cost-of-medicare/. Accessed Feb. 5, 2017.

2 Gretchen Jacobson and Tricia Neuman. Kaiser Family Foundation. Jul. 19, 2016. “Turning Medicare Into a Premium Support System: Frequently Asked Questions.” http://kff.org/medicare/issue-brief/turning-medicare-into-a-premium-support-system-frequently-asked-questions/. Accessed Feb. 5, 2017.

3 Paul Ryan. PaulRyan.house.gov. Jan. 30, 2017. “Medicare.” http://paulryan.house.gov/issues/issue/?IssueID=9969\. Accessed Feb. 5, 2017.

4 Committee for Economic Development. Oct. 2016. “Modernizing Medicare.” https://www.ced.org/reports/single/modernizing-medicare. Accessed Feb. 5, 2017.

5 Bruce Japsen. Forbes. Jan. 29, 2017. “As GOP Backs Off ACA Repeal, Obama’s Medicare Reforms Remain.” http://www.forbes.com/sites/brucejapsen/2017/01/29/as-gop-backs-off-full-aca-repeal-obamas-medicare-reforms-stand/print/. Accessed Feb. 5, 2017.

6 Eric Pianin. The Fiscal Times. Dec. 4, 2016. “Pence Dampens Ryan’s Call for Major Medicare Overhaul Next Year.” http://www.thefiscaltimes.com/2016/12/04/Pence-Dampens-Ryan-s-Call-Major-Medicare-Overhaul-Next-Year. Accessed Feb. 5, 2017.

We are able to provide you with information but not guidance or advice related to Medicare. 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.

Shortlink

Higher Education Cost Inflation Helps Lead to Legitimizing of MOOCs

Almost 40 percent of high school graduates accepted for college admission ultimately do not attend the following year. The reason? College is expensive: The average college graduate emerged with about $30,000 in student loans in 2015.1

So you’ve got to wonder, is it worth it to graduate with that much debt, especially these days when job security can be a challenge? Parents all over America may ask themselves this question. After all, for decades a college education has been considered the key to getting a good job and pursuing an upper-middle-class lifestyle. But with stagnant wages, many college students may not find jobs that pay enough to cover those student loans while still paving the way for their financial future.

Thankfully, there is a movement to open up access to college education. One online education phenomenon that has exploded in popularity since 2011 is the MOOC, or “massive open online course.” They started out being free, short courses available to anyone with access to the internet. Today, many prestigious universities offer these courses, including Caltech, Harvard, MIT, Stanford, Oxford and the Sorbonne.2

With such widespread, even global, acceptance, many in education are pondering whether MOOCs offer a solution to two common problems with our higher education system: access and cost. Today, 93 percent of the global population lacks the ability to receive a higher education for geographic or economic reasons, and MOOCs can help to avoid conflict with both.3

There are several reasons why college tuition has increased so much. One is that individual states used to cover up to two-thirds of state-funded university budgets. Now they cover only about half, which means parents, students and student loans must cover that deficit. A second reason is that more money is allocated to pay for non-academic staff at colleges and universities; twice as much as in the past. A big part of that represents what many believe to be unreasonably high compensation for top university administrators, especially relative to what professors are paid.4

This may be why MOOCs have become so popular in recent years; there is less administrative and bureaucratic involvement in these courses. Between 2015 and the end of 2016, the number of users who registered for at least one massive open online course grew from 35 million to 58 million worldwide.5 More than 700 universities now offer 6,850 online courses, with business and technology being the most popular subjects. In fact, what started out as a free education movement has now added paid certificate and degree programs. This shift in business model is beginning to redefine MOOCs’ role in the education marketplace.6

Even campus-based colleges have joined the online education bandwagon. Today, most courses comprise online and classroom lectures; face-to-face and Facetime meetings with professors; online interactions with instructors and classmates for study sessions and projects; social media discussions and other web-related activities.7

As for the implications of completing a degree online, what was once a heavy stigma may be changing as more employers get their own experiences with online coursework. In fact, research has found that many online graduates from respected brick-and-mortar universities have the same chances of finding a job, getting a raise or being promoted as students who earned their degree on campus.8

Of course, any education technology, innovation or tool will have its own set of drawbacks and limits. However, it is promising to see universities adjusting the traditional model to help make college more affordable and accessible. Whether your child or grandchild prefers a traditional college education or is open to nontraditional types like MOOCs, we can help you create strategies utilizing insurance products to help put college within financial reach.

Content prepared by Kara Stefan Communications

1 Robert Ubell. IEEE Spectrum. Jan. 23, 2017. “Can MOOCs Cure the Tuition Epidemic?” http://spectrum.ieee.org/tech-talk/at-work/education/can-moocs-cure-the-tuition-epidemic. Accessed Jan. 31, 2017.

2 Rosamond Hutt. We Forum. Dec. 13, 2016. “You can now take a course at the world’s best universities for free.” https://www.weforum.org/agenda/2016/12/you-can-now-take-a-course-at-the-world-s-best-universities-for-free-here-s-how-that-happened. Accessed Jan. 31, 2017.

3 Diane Luckow. Simon Frazier University. Jan. 3, 2017. “SFU MOOC a new route for students.” https://www.sfu.ca/sfunews/stories/2017/sfu-mooc-new-route-for-students.html. Accessed Jan. 31, 2017.

4Robert Ubell. IEEE Spectrum. Jan. 23, 2017. “Can MOOCs Cure the Tuition Epidemic?” http://spectrum.ieee.org/tech-talk/at-work/education/can-moocs-cure-the-tuition-epidemic. Accessed Jan. 31, 2017.

5 Natalie Marsh. The PIE News. Jan. 4, 2017. “MOOC users reach 58 million globally.” https://thepienews.com/news/edu-tech/mooc-users-reach-58-million-globally/. Accessed Jan. 31, 2017.

6 Ibid.

7 Robert Ubell. IEEE Spectrum. Jan. 30, 2017. “What Do Employers Really Think About Online Degrees?” http://spectrum.ieee.org/tech-talk/at-work/education/what-do-employers-really-think-about-online-degrees. Accessed Jan. 31, 2017.

8 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.

Shortlink

U.S. Housing Market Update

The 30-year fixed mortgage rate rose from 3.5 percent to 4.25 percent after the presidential election. While higher rates might deter potential homebuyers — particularly young first-timers — residential real estate is expected to continue being a seller’s market throughout 2017.1

Meanwhile, the fate of Fannie Mae and Freddie Mac remains unclear. These government-sponsored enterprises have been managed by a federal agency since the housing slump in 2008. Trump’s pick for Treasury secretary, Steven Mnuchin, has indicated that his top priority is to privatize these mortgage giants.2

The real estate market bodes particularly well for retirees who have paid off their mortgage. While many retirees prefer to stay put in their longtime homes, it may be worth considering downsizing to a smaller place that is easier to maintain. Today’s market provides a wide range of potential homebuyers willing to pay top dollar for homes in areas with low inventory.3

Many retirees looking to downsize are in the same boat as other homebuyers: Plenty of motivation but not enough options from which to choose. In this situation, many are considering new construction, including the lower-cost “tiny house” trend.4

Those in the market for a new home can even custom build a smaller home designed to make life easier as they age, featuring no stairs, wide hallways, easily accessed storage areas and some of the new smart-home technological conveniences to help them stay in touch with loved ones.5

For those who haven’t retired, or aren’t prepared to downsize just yet, one possibility may be purchasing a smaller home now and using it for rental income until they’re ready.6

Be sure to consult with a professional real estate agent or broker to help decide what’s best for your unique situation.

Content prepared by Kara Stefan Communications

1 Diana Olick. CNBC. Dec. 13, 2016. “How rising mortgage rates may not matter for housing.” http://www.cnbc.com/2016/12/13/how-rising-rates-may-not-matter-for-housing.html. Accessed Feb. 8, 2017.

2 Holden Lewis. Bankrate.com. 2017. “What’s in store for housing market in 2017?” http://www.bankrate.com/finance/mortgages/housing-trends-1.aspx. Accessed Jan. 24, 2017.

3 Yuqing Pan. Realtor.com. Jan. 16, 2017. “Sold Out: These 10 U.S. Cities Have the Biggest Housing Shortages.” http://www.realtor.com/news/trends/top-10-housing-markets-constrained-by-tight-inventory/. Accessed Jan. 24, 2017.

4 Kiplinger. 2017. “10 Great Tiny Homes for Retirees.” http://www.kiplinger.com/slideshow/retirement/T010-S001-great-tiny-homes-for-retirees/index.html. Accessed Jan. 24, 2017.

5 TD Bank. Realtor.com. Sept. 18, 2015. “Is New Construction for You?” http://www.realtor.com/advice/buy/is-new-construction-for-you/. Accessed Jan. 24, 2017.

6 Bankrate. Aug. 2, 2016. “Funding retirement with rental income.” http://www.bankrate.com/finance/retirement/funding-retirement-with-rental-income-1.aspx. Accessed Feb. 22, 2017.

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.

AE02175017B

Shortlink

Prescription for Retail Therapy

How much do you use of what you buy? Research reveals that Americans throw away 30 percent to 40 percent of the food they purchase.1 That’s just food, most of which you see daily and toss out regularly as it goes bad. But what about the things that don’t go bad — the sports equipment in the hall closet, the coat you bought for one trip or the shoes you love but never wear?

Why do we buy so much?

Maybe it’s because shopping carts are bigger. That’s right; today’s average shopping cart is three times as big as when they were first introduced in 1938.2 Here’s another interesting tidbit: Customers buy more impulse items when they grab a handheld shopping basket instead of a cart.3 Perhaps that’s because we go into a store knowing we want only one or two items but get a higher sense of fulfillment if we add just one or two more to the basket — because there’s room, and we can.

Retailers conduct research on how to encourage consumers to spend more money. There’s an entire industry devoted to studying shopping habits. Therefore, the more you know, the better you can identify retail traps. It’s not that you shouldn’t buy things; it’s that you shouldn’t buy things you don’t want or need, so it’s good to identify when you’re about to fall into a retailer’s trap. After all, the less you buy, the more you save. And the more you save, the better we can help you explore ways to create a retirement income strategy that you can have confidence in.

One nice perk some stores offer is a place to sit and rest. It’s good for bored children, patient spouses and weary shoppers laden with packages. But you should know that some stores, such as IKEA, set up displays of items that aren’t selling that well near these sitting areas.4 Apparently, staring at an item long enough while in repose can trigger an interest in buying it.

Some people use shopping like comfort food, as a way to temporarily make them feel better after a bad day or stressful situation. This is affectionately called “retail therapy.”5 In fact, studies show that about 62 percent of Americans tend to self-soothe by shopping. Scientists say we feel better because our brain releases a chemical called dopamine when we encounter something novel or exciting. However, it’s worth mentioning that dopamine levels spike higher when you anticipate making a purchase, and lower after you’ve made it.6 In other words, you can get a good feeling by shopping but not always when making a purchase. Good to know.

It’s also interesting to note the difference between impulsive shopping and compulsive shopping. Impulsive is shopping or buying on a whim, whereas compulsive is more planned out and designed to accomplish a goal, if only to feel better. Compulsive shoppers are more likely to get into financial trouble by shopping too much or too often.7 Interestingly, people tend to shop more compulsively when they are with friends as opposed to relatives.8 This could be indicative of shopping for approval or to fit in with your friends, versus trying not to be judged by your relatives.

 

Content prepared by Kara Stefan Communications

1 United Nations Environment Programme. 2017. “Food Waste: The Facts.” http://www.worldfooddayusa.org/food_waste_the_facts. Accessed Jan. 16, 2017.

2 Ali Newton. Display Centre. Dec. 14, 2016. “5 Display Tricks Supermarkets Use To Sell More.” http://displaycentre.co.uk/5-tricks-supermarkets-use-sell-blog/. Accessed Jan. 16, 2017.

3 Ibid.

4 Quentin Fottrell. MarketWatch. Dec. 10, 2016. “10 Psychological Retail Tricks That Make You Spend More Money.” http://www.marketwatch.com/story/10-retail-tricks-that-make-you-spend-more-2013-12-04. Accessed Jan. 16, 2017.

5 Marianna Glynska. The Huffington Post. May 10, 2016. “Going Shopping: Stress Relief or Necessary Burden?” http://www.huffingtonpost.com/marianna-glynska/going-shopping-stress-rel_b_9875532.html. Accessed Jan. 16, 2017.

6 Paula Cookson, LCSW. Inpathy Bulletin. Dec. 21, 2016. “Retail Therapy.” http://insightbulletin.com/retail-therapy/. Accessed Jan. 16, 2017.

7 Elizabeth Hartney, PhD. VeryWell.com. Apr. 18, 2016. “Compulsive vs. Impulsive Shopping.” https://www.verywell.com/difference-between-compulsive-and-impulsive-shopping-22336. Accessed Jan. 16, 2017.

8 Tomas Chamorro-Premuzic. The Guardian. Nov. 26, 2015. “The Psychology of Impulsive Shopping.” https://www.theguardian.com/media-network/2015/nov/26/psychology-impulsive-shopping-christmas-black-friday-sales. Accessed Jan. 16, 2017.

 

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.

 

 
Shortlink

Take a Look at Life Insurance

Middle-aged adults have a plethora of middle-aged financial priorities. It’s hard to even call them priorities because each one is important; it’s just a matter of spreading the money you have across a variety of different needs.

In fact, a typical mid-life checking account might include payouts for a mortgage, college tuition, a savings account, an IRA, a life insurance policy, and a long-term care insurance policy — and that’s not even including the 401(k) contribution that is taken out of a paycheck before it gets deposited.

If you struggle with trying to figure out which financial priorities are most important or how to allocate a portion of your retirement savings among the many insurance product options, we can help. In fact, there are insurance products that can help with multiple priorities so you don’t have to spread your assets so thin.

Take life insurance, for example. There are many different kinds, and one of the main differences is between term and whole life. With a term policy, you purchase a death benefit amount and determine how long you want to hold the policy; it doesn’t pay out anything unless the owner passes away during the term. Whole life features a cash value account, which, over time, can build up a balance you can access, if needed.1

First and foremost, life insurance is there to help take care of your loved ones if you pass away. While many employers provide some life insurance coverage for employees, it may not be enough to avoid the long-term hardship of that loss of income. However, less than 40 percent of Americans have an interest in life insurance at all. It actually comes in seventh in terms of most people’s financial priorities.2

While a term life policy offers a death benefit for the selected term, a whole life policy can provide a death benefit that covers your entire life, as long as you keep paying the premiums. It’s worth mentioning that older policies may actually mature when the policy owner turns 100 and will pay out the death benefit while he or she is still alive. Newer policies, however, extend to a maximum age of 121.3

A whole life policy also offers certain tax advantages. While premiums may not be tax deductible, the cash value grows tax deferred, and distributions through the use of policy loans are generally tax free. The cash value can be accessed if the owner needs emergency funds or money to supplement his or her retirement income or it can even be used to pay the annual premiums on the policy.4 This is all in addition to the death benefit. Please note that withdrawals or policy loans of any type may reduce available cash values and death benefits and may cause the policy to lapse, or affect guarantees against lapse. Additional premium payments may be required to keep the policy in force.


Content prepared by Kara Stefan Communications

1 Amy Danise. NerdWallet. Jan. 5, 2017. “Life Insurance Explained in (Exactly) 250 Words.” https://www.nerdwallet.com/blog/insurance/life-insurance-explained-250-words/. Accessed Feb. 6, 2017.

2 BestLifeRates.org. Dec. 28, 2016. “2015 Life Insurance Statistics and Facts.” https://www.bestliferates.org/blog/2015-life-insurance-statistics-and-facts/. Accessed Jan. 10, 2017.

3 Michael Kitces. Nerd’s Eye View. March 2, 2016. “The Age-100 Tax Problem With Outliving the End of Life Insurance Mortality Tables.” https://www.kitces.com/blog/outliving-the-end-of-life-insurance-mortality-tables-the-age-100-tax-problem-when-life-insurance-expires/. Accessed Jan. 10, 2017.

4 Amy Bell. Investopedia. Aug. 21, 2014. “6 Ways To Capture The Cash Value In Life Insurance.” http://www.investopedia.com/articles/personal-finance/082114/6-ways-capture-cash-value-life-insurance.asp. Accessed Feb. 24, 2017.

 

Life insurance policies are contracts between you and an insurance company. Guarantees and protections provided by insurance products are backed by the financial strength and claims-paying ability of the issuing insurer.

 

The content provided in this newsletter is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.

 

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.

Shortlink

The Future of Globalization

There was a time, at the end of the 20th century, when globalization was celebrated. We became more connected with the rest of the world. We could communicate and share information in real time without cost, nations benefited from strong imports and exports, and companies could improve their bottom lines by utilizing lower-cost suppliers and workers throughout the world.

These days, perhaps not so much. Globalization has become a target for both opportunity and opposition, largely responsible for higher unemployment in developed nations and the protectionism movement.While exposure to different cultures, values and beliefs offers benefits, there is revitalized interest in intra-country government spending on infrastructure and employment.1

It’s easy to see why the topic of globalization would be divisive: what looks like a threat to some looks like opportunity to others. However, no matter what perspective you have, we are here for you. Let us help you stay focused on your long-term retirement income goals, regardless of global and local economic events.  

It is likely that, moving forward, globalization will be downplayed but not eliminated. Rather, at least one observer purports that countries, including the U.S., may expend more effort and resources on “regionalization” with neighboring countries.2

One negative consequence of globalization, combined with the 2007-2009 recession, was higher unemployment in the U.S. This unfortunate circumstance hit young people particularly hard.3 But interestingly, the phenomenon of young adults moving back home with their parents also is characteristic of a global trend. According to one report, the following percentages represent 15- to 29-year-olds who live with their parents in various countries:4

  • ·         Italy, 80.6%
  • ·         Greece, 76.3% 
  • ·         Slovak Republic, 76.2%
  • ·         Spain, 73.6%
  • ·         Canada, 30.9%
  • ·         Denmark, 34.3%
  • ·         Sweden, 35.1%
  • ·         United States, 32.1%5

On one hand, globalization has served to generate more jobs in certain disciplines. The phenomenon is, and will most likely continue to be, responsible for the growth of jobs for market research analysts, interpreters and translators, cartographers and customer service representatives.6

On the other hand, regardless of how many jobs renegotiated trade agreements may bring back to America, most authorities agree there won’t be nearly as many traditional manufacturing jobs as in the past. Since much assembly line work is now automated, the manufacturing jobs of the future are more likely to require technology degrees with IT skills and knowledge.7



Content prepared by Kara Stefan Communications.

1 Sebastian Mallaby. International Monetary Fund. December 2016. “Finance and Development: Globalization Resets.” Vol. 53, No. 4. http://www.imf.org/external/pubs/ft/fandd/2016/12/mallaby.htm. Accessed Feb. 27, 2017.

2 Jonathan Web. Forbes. Dec. 21, 2016. “2017 Will Be a Year of Regionalization, Not

Deglobalization.” http://www.forbes.com/sites/jwebb/2016/12/21/2017-will-be-a-year-of-regionalization-not-deglobalization/print/. Accessed Jan. 1, 2017.

3 Alex Gray. World Economic Forum. Nov. 11, 2016. “Still living with your parents? You’re not alone.” https://www.weforum.org/agenda/2016/11/why-do-so-many-young-adults-still-live-with-their-parents-in-these-countries. Accessed Jan. 1, 2017.

4 Ibid.

5 Drew Desilver. Pew Research. May 24, 2016. “In the U.S. and abroad, more young adults are living with their parents.” http://www.pewresearch.org/fact-tank/2016/05/24/in-the-u-s-and-abroad-more-young-adults-are-living-with-their-parents/. Accessed Jan. 1, 2017.

6 Rob Sentz. Forbes. Sep. 27, 2016. “Three Jobs That Are Growing Because of Globalization.” http://www.forbes.com/sites/emsi/2016/09/27/three-jobs-that-are-growing-because-of-globalization/#66d3c499648c. Accessed Jan. 1, 2017.

7 Scott Simon. NPR. Dec. 10, 2016. “Economist Says Manufacturing Job Loss Driven by Technology, Not Globalization.” http://www.npr.org/2016/12/10/505079140/economist-says-manufacturing-job-loss-driven-by-advancing-technology-not-globali. Accessed Jan. 1, 2017.

 

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.

Shortlink

Sleep and Other Surprising Economic Factors


As a result of all modern society’s demands, researchers say people are sleeping less than ever. Common sleep inhibitors include stress, alcohol consumption, smoking, lack of physical activity and excessive electronic media use.1

Sleep deprivation may be detrimental to one’s health, but there’s an economic toll as well. One recent study found that as much as 3 percent of our gross domestic product (GDP) is lost due to the collective impact of worker sleep loss (and hence, productivity).2

Another factor impacting our economy is timing. It may sound oversimplified, but the concept of “what goes up must come down” often applies to business cycles. For example, Barack Obama took office during one of the lowest points of the business cycle, so regardless of his policies there was generally no way to go but up.3

This is an interesting point, especially in a new year with a new presidential administration. Presidents are going to come and go. Business cycles are going to flourish and decline. And people are going to work and retire.

There is also a correlation between happiness and economic output, but not in the way you might think. One 2016 index showed many Western countries with high GDPs actually ranked low on the scale of happiness. There are no European countries in the top 10, the U.K. ranks 34 and the U.S. comes in at a dismal 108. What are the factors that lead to long-term happiness among citizens? Costa Rica, which is in first place, got rid of its military back in 1949 and reallocated all of that funding toward education and health care. It also produces 99 percent of its electricity from renewable sources.4

Speaking of quality of life, some cities that struggled post-recession have come to realize that beautifying their environs can improve talent recruitment for local companies. Perhaps that’s why mid-sized and small cities in the South and West that have invested in building green parks, bike lanes and cultural venues have attracted more college-educated young people.5 After all, a happy employee is usually a productive one, and productive companies produce a higher GDP.

Our goals for a confident financial future shouldn’t change based on who’s in the White House, or even if the economy is moving up or down.  Please feel free to contact us to discuss creating retirement strategies through the use of insurance products that can help you work toward your long-term retirement income goals.


Content prepared by Kara Stefan Communications.

1 Rand Corporation. 2016. “Why Sleep Matters: Quantifying the Economic Costs of Insufficient Sleep.” http://www.rand.org/randeurope/research/projects/the-value-of-the-sleep-economy.html. Accessed Dec. 30, 2016.

2 Ibid.

3 James DePorre. The Street. November 2016. “Rev’s Forum: 3 Factors That Will Drive the Market Action in 2017.” Dec. 28, 2016. http://realmoney.thestreet.com/articles/12/30/2016/revs-forum-3-factors-will-drive-market-action-2017. Accessed Dec 30, 2016.

4 Bert Oliver. Thought Leader. Dec. 30, 2016. “The ‘happiest’ nations in the world – what do they have in common?” http://thoughtleader.co.za/bertolivier/2016/12/30/the-happiest-nations-in-the-world-what-do-they-have-in-common/. Accessed Dec 30, 2016.

5 Richard Florida and Andrew Small. CityLab. Dec. 28, 2016. “Why Quality of Place Matters.” http://www.citylab.com/design/2016/12/why-quality-of-place-matters/509876/. Accessed Dec. 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.