Browse > Home / Archive: May 2015

| Subscribe via RSS

All About Automobile Policy Coverage

May 26th, 2015 | No Comments | Posted in Financial News

shutterstock_154203536If you are trying to make sense of your automobile insurance options and limits that you need, we can help. We’ve covered the basics to help you read and understand your coverage options and policy language.

Comprehensive and Collision

Collision – Covers damage to your car when your car hits, or is hit by, another vehicle or other object. Collision pays to repair your vehicle, less the deductible you choose. For older cars, you may want to consider dropping this coverage, since it is typically limited to the cash value of your car. This coverage is not required by the state, but if you have a loan or lease, then the lien holder will require it.

Comprehensive (Other Than Collision or OTC) – Covers your vehicle, and sometimes other vehicles you may be driving, for losses resulting from incidents other than collision. This includes damage to your car if it is stolen or damaged by flood, fire, falling objects or animals. States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist that you carry it until the value of your vehicle and your tolerance for risk.

Selecting Comprehensive and Collision Deductibles

Collision coverage is generally sold with a deductible of $250 to $1,000; comprehensive insurance is usually sold with a $250 deductible. Opting for a higher deductible is a way of lowering you’re your auto premium. Remember, the higher the deductible, the more you’ll pay out of pocket if you have a claim. When deciding on a deductible that’s right for you, take into consideration your available cash, disposable income, the value of your vehicle and your tolerance for risk.

Ways to Save on Your Auto Premium

  • Consider raising your deductible
  • Keep a good driving record
  • Drive less to qualify for a low-mileage discount
  • Drive a car with safety features such as anti-lock brakes, airbags, etc…
  • Install an anti-theft device
  • Ask about multi-policy discounts
©2008, 2011, 2013 Zywave, Inc. All rights reserved.

Are You Retiring Within the Next 5 Years?

May 26th, 2015 | No Comments | Posted in Financial News

What should you focus on as the transition approaches?

shutterstock_230366815You can prepare for your retirement transition years before it occurs. In doing so, you can do your best to avoid the kind of financial surprises that tend to upset an unsuspecting new retiree.

How much monthly income will you need? Look at your monthly expenses and add them up. (Consider also the trips, adventures and pursuits you have in mind in the near term.) You may end up living on less; that may be acceptable, as your monthly expenses may decline. If your retirement income strategy was conceived a few years ago, revisit it to see if it needs adjusting. As a test, you can even try living on your projected monthly income for 2-3 months prior to retiring.

Should you try to go Roth? Many pre-retirees have amassed substantial retirement savings in tax-deferred retirement accounts such as 401(k)s, 403(b)s and traditional IRAs. Distributions from these accounts are taxed as ordinary income. This reality makes some pre-retirees weigh the pros and cons of a Roth IRA or Roth 401(k) conversion for some or all of those assets. You may want to consider the “Roth tradeoff” – being taxed on the amount of retirement savings you convert today in exchange for the ability to take tax-free withdrawals from the Roth IRA or 401(k) tomorrow. (You must be 59½ and have owned that Roth account for at least five years to take tax-free distributions.)1

Should you downsize or relocate? Moving to another state may lessen your tax burden. Moving into a smaller home may reduce your monthly expenses. In a perfect world, you would retire without any mortgage debt. If you will still be paying off your home loan in retirement, realize that your monthly income might be lower as you do so. You may want to investigate a refi, but consider that the cost of a refi can offset the potential savings down the line.

How conservative should your portfolio be? Even if your retirement savings are substantial, growth investing gives your portfolio the potential to keep pace with or keep ahead of rising consumer prices. Mere gradual inflation has the capability to erode your purchasing power over time. As an example, at 3% inflation what costs $10,000 today will cost more than $24,000 in 2045.2

In planning for retirement, the top priority is to build savings; within retirement, the top priority is generating consistent, sufficient income. With that in mind, portfolio assets may be adjusted or reallocated with respect to time: it may be wise to have some risk-averse investments that can provide income in the next few years as well as growth investments geared to income or savings objectives on the long-term horizon.

How will you live? There are people who wrap up their careers without much idea of what their day-to-day life will be like once they retire. Some picture an endless Saturday. Others wonder if they will lose their sense of purpose (and self) away from work. Remember that retirement is a beginning. Ask yourself what you would like to begin doing. Think about how to structure your days to do it, and how your day-to-day life could change for the better with the gift of more free time.

Many retirees find that their expenses “out of the gate” are larger than they anticipated – more travel and leisure means more money spent. Even so, no business owner or professional wants to enter retirement pinching pennies. If you want to live it up a little yet are worried about drawing down your retirement savings too fast, consider slimming transportation costs (car and gasoline expenses; maybe you could even live car-free), landscaping costs, or other monthly costs that amount to discretionary spending better suited to youth or mid-life.

How will you take care of yourself? What kind of health insurance do you have right now? If your company sponsors a group health plan, you may as well get the most out of it (in terms of doctor, dentist and optometrist visits) before you leave the office.

If you retire prior to age 65, Medicare will not be there for you. Check and see if your group health plan will extend certain benefits to you when you retire; it may or may not. If you can stay enrolled in it, great; if not, you may have to find new coverage at presumably higher premiums.

Even if you retire at 65 or later, Medicare is no panacea. Your out-of-pocket health care expenses could still be substantial with Medicare in place. Long term care is another consideration – if you think you (or your spouse) will need it, should it be funded through existing assets or some form of LTC insurance?

Give your retirement strategy a second look as the transition approaches. Review it in the company of the financial professional who helped you create and refine it. An adjustment or two before retirement may be necessary due to life or financial events.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – turbotax.intuit.com/tax-tools/tax-tips/Retirement/The-Tax-Benefits-of-Your-401-k–Plan/INF22614.html [5/7/15]
2 – investopedia.com/articles/markets/042215/best-etfs-inflationary-worries.asp [4/22/15]

Keep Your Budget in Mind When Planning a Vacation

May 26th, 2015 | No Comments | Posted in Financial News

shutterstock_92215372

Vacations don’t have to be expensive to be memorable and fun. Here are some suggestions to
plan a successful vacation.

Create a vacation budget

Decide how much money you can afford to spend on a summer vacation. Start by updating your monthly budget. Review your income, expenses, and debt obligations and be sure to set aside money for emergencies. Then decide how much you can direct towards a summer vacation. Add up the total estimated costs of your trip in advance, before making final plans. Then, put away money each month into a savings account.

Involve your family

Once you’ve determined how much money you can afford for a vacation, decide how best to spend it. Include your family members to decide on where to go and what to do. If your budget is limited, consider an at-home vacation like a grand picnic with families, friends and neighbors. You could also host a pool party at a local pool or visit tourist attractions in your area.

Research your vacation options

Use the internet to get information on sightseeing, tourist attractions, and discount travel and lodging. Ask travel agents for information on seasonal discounts. Read the latest travel guides available online, in newspapers, and through local visitor and tourism associations. Get advice from friends and relatives who’ve traveled to places you plan to visit. They can help direct you to places that are fun and affordable.

Plan your itinerary in advance

Map out your daily activities and routes to ensure that you’re staying on-course and on budget. Unplanned activities can often amount to unplanned spending. Before you know it your budget will be busted.

Have a credit plan

Check credit card balances on your accounts well before you travel. Make sure they are paid off or under half the limit that you can charge. Credit cards are helpful on the road. They’re safer than cash because they can be replaced if lost or stolen. They can make it easy to overspend, though, so be sure to limit your charges to budgeted expenses. Also, limit credit card cash advances. This is expensive cash because you could be assessed a flat fee and charged interest as of the date the advance is taken. If you need cash, use your ATM or debit card instead. Only use one or two credit cards and be sure to keep all receipts and record your charges in a ledger. When you return home, pay off the credit card charges using the money that you saved for the vacation.

Protecting Yourself Against Cyberattacks

May 26th, 2015 | No Comments | Posted in Financial News

How vulnerable is your data?

shutterstock_25358903225% of Americans were cyberhacked between March 2014 and March 2015. The American Institute of CPAs announced that alarming discovery in April, publishing the results of a survey conducted by Harris Poll. Disturbing? Certainly, but the instances of pre-retirees being victimized were even greater – 34% of adults aged 55-64 reported having their data stolen or compromised within that period.1

Small businesses are also commonly victimized. While identify theft has eroded consumer and employee trust in Target, Sony, Home Depot, Anthem and Wells Fargo, they will survive; a small business with limited IT resources may not. Symantec says that 30% of all targeted cyberattacks occur against firms employing fewer than 250 workers. The National Cyber Security Alliance says that the average small business that gets hacked has a 60% chance of closing its doors within six months.2

Hackers will not put your household out of business, but they can steal the assets within your checking account or your workplace retirement plan in seconds. They can also take your Social Security number, email address, annual income data and more and sell it or retain it to hurt you in the future.

Cyberattacks within the financial world are especially frightening. Bank and brokerage accounts are respectively insured by the FDIC and SIPC, yet that insurance only protects a customer or client in cases of institutional failure. It does not cover cybertheft.3

How can you strengthen your online defenses against cyberthieves? One way to do that is through two-factor authentication, or 2FA.

Corporations are starting to realize the vulnerability of a username-password combination. Given that so many usernames are derivations of real names, and given that many passwords are still mentally convenient, a hacker can access such accounts with relative ease.

If a company installs another security factor beyond the username-password combination – such as a voiceprint audio I.D. or a one-time numeric code texted to your phone to permit account access – hacking an account becomes much harder. This two-factor authentication may become the norm in the near future.

Too many Americans use simple passwords, sometimes at multiple websites. (Did you know that “password” is one of the most commonly used passwords?) Fortunately, free software has emerged to generate random passwords for different accounts. High net worth households are discovering Norton Identity Safe, RoboForm, LastPass, Dashlane and other apps capable of creating super-strong passwords.4

Aside from using stronger passwords, avoid falling prey to the classic mistakes. When you use free Wi-Fi at a coffeeshop or airport or make a bid at an online auction site of questionable origin, you are taking your chances. The same goes for opening mystery email attachments and sharing private data on websites lacking the HTTPS protocol.

Will cybersecurity improve in the coming years? A widely adopted 2FA standard may make online theft much harder to pull off. Other defenses are being touted, some with more merit than others. Using a fingerprint as a password sounds good, but has a crippling drawback: you can change a password, but try changing your fingerprint. Some consumers are getting new EMV-equipped credit and debit cards that rely on microchips rather than magnetic strips; many of these are not the chip-and-PIN cards common to Europe, however. Instead, they are chip-and-signature cards. The second security factor is simply you signing your name. Cybersecurity analysts believe that while the chip-and-signature cards are better than the old technology, they fall short of chip-and-PIN cards.5

True cybersecurity may prove elusive, but personal vigilance and password management software are good steps toward building a better defense against cyberattacks.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – aicpa.org/Press/PressReleases/2015/Pages/AICPA-Survey-One-in-four-Americans-Victimized-by-Information-Security-Breaches.aspx [4/21/15]
2 – wscpa.org/more/news/article/wscpa-blog/2015/04/23/think-you-are-too-small-to-be-a-target-of-cyber-crime-think-again-?Site=WSCPA#.VVExkpMsDCo [4/23/13]
3 – dailyfinance.com/2015/02/12/anthem-customers-protect-your-accounts/ [2/12/15]
4 – businessinsider.com/9-things-youre-doing-that-make-you-a-perfect-target-for-hackers-2015-5?op=1 [5/6/15]
5 – washingtonpost.com/news/get-there/wp/2015/04/30/your-new-credit-card-may-not-be-as-safe-as-you-think/ [4/30/15]

Why You Should Look for a Registered Investment Advisor

May 26th, 2015 | No Comments | Posted in Financial News

Standards matter, especially in wealth management.

shutterstock_183272549Who should manage significant wealth? In recent years, more and more high net worth households have found their answer to that question: a Registered Investment Advisor.

What is the RIA difference? RIAs have a fiduciary duty to act in your best interest. That is a legal obligation, and it is expressed in the investment recommendations the RIA and their representatives make and the advice and guidance they offer. If even the potential for a conflict of interest exists, it must be fully disclosed.1,2

Investment brokers are not asked to work by a fiduciary standard, only a suitability standard. Under a suitability standard, a broker is asked to recommend investment products that are “suitable” for a client – an investment that is regarded as appropriate for his or her objectives. An investment conveniently offered by his or her broker might meet that standard – one offered with little or no evaluation of other options, one that may have high fees and bring that broker a relatively large commission.1

In fact, the typical investment broker works on a commission basis – a percentage of his or her compensation depends on product sales. Just who ends up paying the broker those commissions? They may be paid by the investment companies involved – or the client. They may not even be mentioned until after the product sale.1

In contrast, many RIAs manage the assets of high net worth investors on a fee basis. The management fees usually represent a percentage of invested assets belonging to the client. Hourly or per-project fees may be charged for other services. These fees are disclosed up front. RIAs are not affiliated with brokerage firms, so the potential for brokerage directives coloring the advisor-client relationship is diminished.1,2

As the designation implies, an RIA is an investment advisor that has registered with either the Securities and Exchange Commission (SEC) or the securities authorities in the state(s) in which they operate. Technically speaking, an RIA is a financial firm. The individual advisors working for the RIA are IARs, or Investment Advisor Representatives – but the phrase “RIA” is often informally used to refer to both an IAR and the firm for which she or he works.1,2

The demand for RIAs is growing. Individuals, couples, families and institutions with sizable wealth management concerns often turn toward RIAs. From 2008-12, assets under management by RIAs increased an average of 8.8% annually, to the point where they were managing $1.5 trillion of invested assets in 2014. Additionally, the number of RIAs grew by 8% per year from 2008-12.3

Those statistics bear out an emerging truth: high net worth households want unbiased investment consulting, and see value in working with RIAs that are fee-based or even fee-only.

The typical RIA firm is built to address varied client priorities. An independent RIA firm is usually owned and operated by a highly experienced financial professional with prestigious designations (such as the Certified Financial Planner™ designation). That individual does not usually work alone. Often, the RIA firm employs or retains a “team” of professionals skilled in disciplines that may include portfolio management, tax planning, estate planning and retirement planning. These individuals are usually financial professionals who have spent significant time in the industry, and who have committed themselves to continuing education.2

Standards matter in life, and they especially matter in wealth management. As you want a wealth management with high standards, a Registered Investment Advisor is the clear choice.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.
1 – sfchronicle.com/business/networth/article/Proposed-rule-would-lead-to-better-advice-on-6207776.php [4/17/15]
2 – nerdwallet.com/finance/question/what-s-the-difference-between-a-registered-investment-advisor-and-the-traditional-advisor-working-at-a-large-bank-or-brokerage-f-521 [8/13/13]
3 – forbes.com/sites/halahtouryalai/2014/04/16/still-booming-top-rias-keep-getting-bigger/ [4/16/14]

May 2015 – Monthly Economic Update

May 26th, 2015 | No Comments | Posted in Monthly Economic Update

May2015-MonthlyEconomicUpdate

5 Dos And Don’ts Of Backyard Landscaping

May 22nd, 2015 | No Comments | Posted in Lifestyle

Your backyard can be many things — a quiet retreat, a play area for the kids, an adventurous space for the pets — the possibilities rest with your imagination. It’s important to keep the purpose of the space in mind when you landscape. You should also consider climate conditions and any other concerns before digging in and planting new flowers or shrubs. Here are the main dos and don’ts of backyard landscape design to guide you:

Do:

#1 Use a landscape professional when needed.
Landscape professionals know everything about your local climate conditions. They also regulate the design process from beginning to end. It saves you a lot of time and hassle, especially if you’re busy with work or the kids. You can end up with a beautiful product for a little extra money but a lot less time and work on your part.

#2 Think in the long term.
Plant care can sometimes become cumbersome. Choose plants that won’t be too hazardous or high maintenance, especially if you aren’t home a lot to care for them. You should think about what the mature size of a plant will be before investing in it.

#3 Consider your home’s appeal.
Exterior appeal is just as important as interior appeal. This doesn’t mean your front yard is the only area buyers will focus on. If your backyard is unkempt, wild, or not fenced in, buyers will be less likely to put an offer down.

#4 Plan for as little maintenance as possible.
What kind of timeframe do you have to water and nurture plants? Are you a stay at-home mom with a lot of other responsibilities? Do you have a green thumb? Take all of these into consideration when choosing your plants. You don’t want to spend hundreds on these green babies only to watch them die because they’re left alone for weeks at a time without food or water.

#5 Watch for weeds.
Never let weeds grow in your backyard, especially if you’re trying to get a garden underway. Weeds, including dandelions, are invasive and problematic — and they detract from the overall appeal from the yard. While your children might enjoy picking these and letting their seeds fly, it spells more work for you in the long term. You might consider spraying some pre-emergent herbicide on your garden beds to save you a little time and trouble.

Photo courtesy of Almost Perfect Landscaping, LLC in Paramus, NJ

Don’t:

#1 Install invasive species.
While some invasive plants might seem beautiful, they are more trouble than they’re worth. Species that need a certain kind of climate will wither and die quickly. This leads to more money spent on replacements in your garden. You should ask a professional lawn care service about which plants thrive in your area, and moreover, which exotics to avoid.

#2 Let the lawn take over.
While green lawns are great for children and dogs, gardening enthusiasts should think about downsizing their lawn for more gardening beds and shrubs. You can dig up grass and replace it with more attractive flowers or shrubbery. For parents or dog owners, remember to keep the lawn well-trimmed. If you don’t have time, have your lawn professionally mowed for $50 to $110.

#3 Plant trees too close.
Never plant a tree too close to your home, or else you could be looking at roof repair in the winter. Consider how tall and long its branches will be. The absolute minimum distance a short tree should be from your home is 20 feet, but taller trees should be planted up to 50 feet away.

#4 Allow the overgrowth to stay.
Overgrown trees, shrubs and flowers can detract from the beauty of a backyard. Whether you planted them or they were already there, you should think about removing them if their maintenance is too much work. You don’t want the backyard’s beauty to be overshadowed by these problematic plants.

Conclusion
These are only some tips for ensuring a beautiful backyard design. The absolute number one rule for your backyard is this: create your perfect oasis. Whether it’s a place to enjoy warm summer nights, have a family meal or throw the ball with your dog, your backyard should be a welcome environment.

Source: huffingtonpost.com

Coffee, Caffeine and Calories

May 22nd, 2015 | No Comments | Posted in Lifestyle

Stay healthy and keep the java flowing with these essential tips.

© Prime Solutions Advisors, LLC. All Rights Reserved. Visit our website at www.primesolutionsadvisors.com | Powered by OnLetterhead Digital Marketing Solutions.