As Times Change Women Learn to Leverage Life Insurance Ownership

Posted on March 29, 2011 by admin

Women have always lagged behind men in life insurance ownership, but the gap is quickly closing.

According to a study done by LIMRA, almost 6 out of 10 women owned some sort of life insurance in 2010, about the same as men’s ownership. So, what’s the big deal? Life insurance, whether male or female, has always been one of the most cost effective ways for men and women to protect their loved ones in the event that anything should happen to them — as well as provide for their own futures. It protects your family in the event of lost income due to death, provides retirement security, pays off mortgages and can even fund college educations. Life insurance is crucial when it comes to protecting your financial future.

Interestingly enough, studies show that women place more value on life insurance (70%) than men (62%). Furthermore, most modern U.S. households are dual-income households with more women working and contributing to the family’s finances. And with 30% of women out-earning their husbands, women are making or helping to make many of the financial decisions for their families. To put it frankly, men are no longer the socially-accepted alpha male of the household; women are either matching their partner’s income or exceeding it. This is exactly why the need for women to have life insurance is even more critical now than ever.

Here’s a breakdown of household dynamics and how women should leverage their life insurance ownership and long term care in each situation:

Two-income family: today’s two-income families typically depend on both paychecks to make ends meet. If anything happened to you and the income you provide would your family be able to suffer a severe financial loss? Adequate life insurance can replace your income, remove uncertainty and help guarantee your family’s financial security.
Single women heading a household: as a single parent you are responsible for the support and care of your children. Your need for life insurance is even more crucial than in a dual-parent household, which would have another source of income if one parent dies.
Full-time home maker: this is just as much a partnership as the two-income family in that it takes the efforts of both to make the household function. Your services, while in many respects beyond value, are priceless. How would your husband and children manage without you?
Single woman: your need for life insurance may be even greater than for married women. Just because you are single doesn’t mean you are without responsibilities. Life insurance protects against loans, debts and any other final expenses that would fall on parents or other loved ones. Furthermore, life insurance purchased today can protect your future insurability as you get older – albeit a family or a retirement fund.

As times change and women’s economic roles evolve within their family and our society it is crucial to point out the importance of life insurance policies for their financial protection. Advisors can help women make critical decisions about life insurance and long term care. Whether you’re single, married or leading a household on your own, it is critical to understand how life insurance can help protect against unexpected financial damage and contribute to long term care plans.

Future Looks Bright for Small Businesses

Posted on March 22, 2011 by admin

According to the U.S. Small Business Administration, small businesses represent more than 99 percent of all U.S. employers and have created 65 percent of new jobs in the past 17 years. It’s obvious how incredible their impact is on America’s economy. And it’s only getting bigger. Confidence in U.S. small businesses has climbed to its highest level in three years. The National Federation of Independent Business’s optimism index rose to 94.5%, the highest index since the recession began in December 2007. From employment to sales to the potential end of price cutting, small businesses are taking a stab at improving the outlook of America’s economy, and future is looking bright.
Before we review the encouraging numbers small businesses are currently posting, let’s check out some small business statistics and trends that highlight the true impact that small businesses have on our economy. The estimated 29.6 million small businesses in the United States:

Employ just over half of the country’s private sector workforce
Hire 40 percent of high tech workers, such as scientists, engineers and computer workers
Include 52 percent home-based businesses and two percent franchises
Represent 97.3 percent of all the exporters of goods
Represent 99.7 percent of all employer firms
Generate a majority of the innovations that come from United States companies

The benefits of small businesses in our economy are limitless. They can provide job opportunities, increase government revenue due to businesses taxes, and most importantly, they can stimulate our economy and possibly economies around the world. Small businesses are the engine that drives the American economy, and the number of small businesses tends to increase during rough financial and economic times. As you can see, this is definitely true in our current situation. The good news is that the hike in the small business optimism index will bring our economy great benefits and paybacks.

Employment rates in the small business sector are slowly increasing, with plans to add to payrolls rising 2 points to a net 5%. In a February survey, a net 15% of firms said they were having difficulties filling job openings. The sales outlook is looking good too. The net percent of small business owners projecting higher sales, adjusted for inflation, rose 1 point to 14 percent, the highest level since September 2007. Plans for capital investment are holding steady, and the percentage of those expecting credit conditions to ease is also staying the same. As far as price cutting goes, February’s report signaled the “end of a long period of price cutting,” which signals a potential future increase in price averages as supply adjustments restore pricing power.

While we are far from being where we were before the recession, it is encouraging to see that small businesses are stimulating our economy and helping us slowly dig our way out of the economic slump. It is also important to note that there are myriad factors that affect our economy, but the promising numbers on small businesses speak for themselves. Let’s hope this is a sneak peek at what lies in our economic future.

The Waiting Game???

Posted on March 16, 2011 by admin

When should you begin taking Social Security?

The updated version

It’s a popular and seemingly simple question but has no simple answer. In fact, coming up with the perfect answer requires you to be part actuary, part financial planner and part fortune teller. Still, you can make a better decision if you take the time to understand some of the twists in how benefits are calculated… or better yet, contact us or other well versed source to help.

The amazing “loophole” social security strategy of the “do over” was immediately dropped last December and without much warning. It was such a great idea for many recent retirees that it was unceremoniously rescinded. (I wrote previously a few great SSI strategies). Back to the drawing board and the age old (no pun intended) question, “When should I begin taking my social security benefit?

Before we venture down that winding road a warning for the oldest baby boomers, which are turning 65 this year:

Regardless of when you take Social Security and when you stop working, you need to enroll in Medicare when you first become eligible at 65, or you could face financial penalties in the form of higher premiums.

By contrast, you can start collecting Social Security anytime from age 62 to 70 and the later you start, the bigger your benefit.

Women live longer than men, so generally women are more likely to benefit from delaying social security until age 70. But if you are married, you may qualify to begin receiving an amount equal to half your spouse’s social security benefit at age 62, even if he has not chosen to begin taking his social security benefit. This is a very important and free money concept that you MUST investigate.

The married couple’s strategy:

Here’s where claiming strategies can get really complicated—and where understanding the Social Security rules is even more important. Then there’s the issue of how spousal benefits are calculated when both partners are still alive. When you claim benefits, you’re eligible for what you yourself have earned, or up to half of your living spouse’s full retirement benefit, whichever is higher. But there’s yet another angle. Suppose a couple wants at least some cash coming in from Social Security before the hubby reaches 70? Once he reaches his full retirement age of 66, he can claim his benefits and then ask that his claim and his benefits be immediately suspended. He then can continue to wait for a bigger benefit, while his wife is now eligible to claim spousal benefits.

Here are some more points to consider when making your decision on Social Security (SSI):

If you’re still working, don’t claim benefits before your full retirement age:

“Never claim SSI early while working unless you really need the money to survive. That’s because of the earnings penalty. Until you reach the full retirement age, you lose a “significant” portion of your SSI… it’s just not worth it… it just doesn’t pay to take benefits while you’re still earning a decent salary.

Don’t take Social Security until you’re sure you want it:

In December, the Social Security Administration effectively killed a “do-over” strategy that had allowed seniors to file for benefits and then later repay them, without interest, and get a bigger check. In effect, you got eight years—from 62 to 70– to change your mind about taking early benefits. You could even use a do-over as a way to get an interest free loan from the government. But since the December change, you have only 12 months to change your mind after initially filing for benefits.

Your families health history:

If you don’ need an early check to make ends meet, and particularly if you’re single; this could be a significant factor in your decision. If you’re in poor health, and you want to get some of your tax dollars back, it can make sense to claim Social Security as early as possible… otherwise, delay as long as possible.

Don’t get hung up on the break-even date:

You’ll hear a lot of talk about the “break-even” age—the age you have to live to so that waiting to collect a bigger check pays off. You simply decide if you are a gambler and make a bet that you won’t live longer than about age 77… otherwise, keep it simple and delay…

The cost of making the wrong decision in when to take your social security benefit can be large. Seek advice and as always, feel welcome to contact My Money Track for help.

Solutions to your Biggest Money Problems

Posted on March 15, 2011 by admin

It’s 2012. No two individuals have the same financial woes. Not only do financial situations vary in income, debt, spending and saving habits, but they also vary in the perspectives of those individuals and how they rank their specific money problems. After researching a few polls on the most popular money problems, we’ve created a list of what financial issues most individuals worry about the most and what you can do about it.

I spend too much. Without a doubt, the most worrisome financial problem people dwell over is the act of spending too much money, but why? While credit cards play a big factor in their ease and accessibility of use, scientists have actually proven that spending money makes us happy. Surprise? Probably not. Much like chocolate cake or kissing a loved one, the idea of spending money can release a feel-good chemical in our brains called dopamine. Overspending can also stem from poor planning or lack of time. So, how do you stop spending? It’s not easy but doing things like changing your daily habits, only having one credit card and using more cash, unsubscribing from catalogs and finding other inexpensive ways to be happy will help you curb your spending problems.

I save too little. You’re not alone! According to the U.S. Department of Commerce, the average American household saves 0.4 percent of its disposable income! Some blame low interest rates; if you’re making very little in your savings account you have less incentive save. Others blame spending too much. It’s obvious – when you spend too much you can’t save what you should. One nice way to make yourself save is to detail out a clear goal. Additionally, you can set up automatic deductions from your paycheck, open a 401(k), and start an immediate savings account.

Gas prices are absurd. Energy prices, in general, are on the rise, but gas prices specifically are up one-third in the past year. And with our economy depending heavily on other world markets, it is clear that gas prices are not going to drop any time soon. There are several alternatives to driving, like taking metro transit, walking, biking and carpooling. But if you must drive, check out the cheapest gas prices online, remove heavy junk from your car, and be sure to check the oil, air filter and tire pressure on a regular basis. If you can, investing in energy efficient will save you money in the long run.

I’m not sure how much to save for retirement. The standard number for your retirement planning is 15% of your income each year. However, each person’s financial picture is different, and there are many variables that need to be factored in. You can either contact a retirement specialist, or check out the countless online calculators that will do the math for you. Some tips for retirement planning include 401(k)’s, IRA’s, pension plans, investments and annuities.

I need a budget. Are you constantly finding yourself out of cash? Is your monthly cash cycle consistently inconsistent? A budget is simply a plan on how to appropriately spend your money. In order for it to work, though, you must realistic and stick to your plan. Budgets are relatively easy to calculate. Simply sit down and create a map of your monthly spending and saving habits. Follow it accordingly and revisit it at the end of the month to determine what’s worked and what hasn’t. Another tip is to sign up for an online money-tracking program. You can even link your bank accounts and bills for deductions itemizations.

I need a financial plan. Wait, didn’t we just talk about budgets? A financial plan is much broader than a budget. It’s a track to help you achieve those big things in life, like a house, vacation home or your child’s education. It encompasses your savings, investments and even your insurance. Creating a financial plan is much more complex than creating a budget. Do some research and hire a financial planner. The peace of mind in knowing your financial future is secure and protected is worth the time and effort in hiring and educator to coach you through your big life decisions.

What You Need to Know about Consumer Debt

Posted on March 8, 2011 by admin

The latest statistics from the Federal Reserve report that outstanding consumer debt in 2010 remained fairly steady. Granted, those statistics do not include debt secured by real estate, and they also don’t touch on the rise of bankruptcy numbers. So, what does the report include? Let’s take a look at the consumer credit breakdown, its components and statistics, and where you stand in the consumer debt equation.

Consumer Credit

Total amount of consumer debt in the United States stands at nearly $2.4 trillion.
$7,800 in debt for every man, woman and child that lives in the U.S.
33% of all consumer debt is termed revolving credit (periodic repayments are made to lenders, like credit cards).
67% of all consumer debt is derived from loans that are not revolving in nature (like automobile loans, student loans, vacations, etc).
The financial obligations ratio of all debt payments to disposable income stands at 15.27% for homeowners and 23.99% for renters.

These averages paint a financial picture of the American household and where their money is being allocated. What they don’t tell you is how differently the picture is painted based on definitive spending, saving, and income numbers. With the typical homeowner spending nearly 16% of their disposable income just to own their home and car, it begs the question, where is the other income being allocated?

Credit Card Debt

181 million credit card holders in the U.S.
These same Americans own approximately 1.5 billion cards, an average of nearly nine credit cards issued per credit card holder.
Americans charged approximately $1,950 billion to their credit cards in 2006. That’s just over $11,300 in charges per cardholder.
Americans carried a projected $1,177 billion at the end of 2010.
That’s $6,500 in credit card debt per card holder (not household).

It’s clear that credit card debt is rising. Many Americans rely on credit cards for large purchases, everyday necessities, and even simply credit card promotions and offers. Credit cards can be great tools for building your credit, the problems arise when the spending and card balances become too much for you to handle. Late fees and higher interest rates lead to an exponentially bigger problem. And what’s next? Many are turning to bankruptcy for help.

Bankruptcy

Credit card delinquencies were at the third highest level on record in 2008.
Cardholders 60 or more days late on payments stood at 4.50%.
Cardholders that were 30 days late stood at 5.72%.
There were 115,000 bankruptcy filings in November 2010.
There were 9% more bankruptcy filings by November 2010 compared a year earlier.
Nationally, there were 6,000 bankruptcy filings per million individuals, or 1 in every 160 people.

With the current statistics showing a rise in bankruptcy filings, it’s obvious that more and more individuals are experiencing financial distress. Mortgage payments, automobile payments, student loans and credit card balances are just a few of the main factors that lead to financial distress. Bankruptcy isn’t the only answer. Financial planners can be huge assets in debt and risk management. If you think your financial future is in danger, don’t hesitate to take action. The sooner you ask for help the better! Drop us a line and we can answer any of the financial questions you may have.

Financial Advice VS Financial Coaching

Posted on March 1, 2011 by admin

You’ve heard the different terms describing financial planners and what they can do to secure your financial future.The question is: did you know that there is a vast difference between a financial advisor and a financial coach? From a bare-bone, definition standpoint, a financial advisor is “a professional who renders financial services to individuals,” whereas coaching is “a future-focused practice with the aim of helping clients determine and achieve personal goals.”

In other words, a financial advisor lends his hand in managing the wealth that you’ve already built; a financial coach helps you build that wealth from the get-go. Would you rather go to a greenhouse and buy a plant? Or go to a greenhouse, buy the seeds, learn how to nurture them and watch them grow? Financial coaching gives you the tools and knowledge necessary to take those seeds home with you, plant them, and cultivate a bountiful garden.

First and foremost, it is important to point out that each and every individual is different; different goals, different savings plans, and different incomes. Maybe you already have an impressive garden, and are looking for financial advice on investments and portfolio options. Financial advisors manage the money you already have – you give them complete control of your assets and they do all the work. While this model works great for some people, it’s not ideal for others. Wealth coaching focuses on YOU.It makes you a major actor in your financial building process. Wealth coaches are educators and mentors that give you the unique tools and strategies necessary to financial freedom.

Why put your financial future in the hands of someone else when you could learn and build your financial path through a dynamic relationship where the goal is your financial success? Here’s a breakdown of the major differences between financial advice and financial coaching:

Financial Coaching	Financial Advice
Follow the client’s agenda	Follow the advisor’s agenda
Unique strategies, plans & portfolios	Similar plans, strategies & portfolios
Client becomes expert & authority	Advisor is authority
Dynamic relationship creates independence	Relationship creates dependence
Client is accountable and responsible	Advisor is accountable and responsible
Posting questions and educating	Directing
Focuses on learning and growth of client	Focuses on financial product and sales
Goal is to create a fully functional, educated, independent client	Goal is to create a portfolio for a dependent client
No investment product sales	Investment product sales
Teaches self-responsibility	Advisor takes on responsibility
Paid for eliciting, educating, expanding, and supporting client’s whole financial success	Paid for portfolio advice and transactions
Draws out client’s values, skills, and knowledge	Imposes advisor’s values, skills, and knowledge on client

As you can see, there are pros and cons to each financial planning business model. It all depends on where you are in your financial planning process. The benefits of having a financial coach in your corner are endless: take control of your finances and learn how to harvest a secure and protected financial garden. Or, buy the plants and enlist the help and advice of a certified gardener to be the expert and authority in your financial future. Heck, do both!

Enlist the help of a financial planner to both coach and advise you in your financial decisions. Regardless of your financial situation and where you are in your financial planning process, it is crucial to understand the importance of a second pair of educated eyes looking at your fiscal circumstances.

Financial Advice VS Financial Coaching: Which One is Right for YOU?

Monthly Archives: March 2011

Future Looks Bright for Small Businesses

Solutions to your Biggest Money Problems

What You Need to Know about Consumer Debt

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