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Legislative Updates

With so much attention focused on the rifts among and between political parties and the news media, it may seem as if little actual legislation is making its way through our democratic process. However, while President Trump’s major initiatives – Affordable Care Act repeal, tax reform and infrastructure improvements – haven’t been enacted, Trump has signed more than 40 bills since taking office in January.1

Although the political situation may present frustration for people trying to make prudent decisions about their financial future, we remind you that finances are personal. Your financial decisions should reflect your own goals and timeline. We are happy to evaluate your retirement income strategy and make recommendations utilizing insurance products to help you work toward your objectives.

Here is an overview of some of the recent legislation Congress has passed:

·        Countering America’s Adversaries Through Sanctions Act (H.R. 3364) – This bill requires the president to submit any planned waiver of current sanctions on other countries to Congress, and details new sanctions on Russia, Iran and North Korea for a variety of violations.2

·        Securing our Agriculture and Food Act (H.R. 1238) – This bill authorizes the Department of Homeland Security to protect efforts related to food, agriculture and veterinary defense from acts of terrorism and other high-consequence events that pose a risk to homeland security.3

·        Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017 (S. 1094) – This bill gives the secretary of Veterans Affairs the authority to fire employees through an expedited appeals process, and it makes it easier to discipline employees by revoking bonuses. It also has provisions to protect whistleblowers who report wrongdoing.4

·        Public Safety Officers’ Benefits Improvement Act of 2017 (S. 419) – This bill revises requirements for the Public Safety Officers’ Benefits program, which provides death, disability and education benefits to public safety officers who are killed or injured in the line of duty, as well as to their survivors. The bill includes provisions to expedite the payment of benefit claims.5

Content prepared by Kara Stefan Communications.

1 Jennifer Hansler. CNN. Aug. 3, 2017. “President Trump has signed 43 bills into law. Here’s what they do.” http://www.cnn.com/2017/06/29/politics/president-trump-legislation/index.html. Accessed Aug. 18, 2017.
2 GovTrack. 2017. “H.R. 3364: Countering America’s Adversaries Through Sanctions Act.” https://www.govtrack.us/congress/bills/115/hr3364. Accessed Aug. 18, 2017.
3 GovTrack. 2017. “H.R. 1238: Securing our Agriculture and Food Act.” https://www.govtrack.us/congress/bills/115/hr1238. Accessed Aug. 18, 2017.
4 GovTrack. 2017. “S. 1094: Department of Veterans Affairs Accountability and Whistleblower Protection Act of 2017.” https://www.govtrack.us/congress/bills/115/s1094. Accessed Aug. 18, 2017.
5 GovTrack. 2017. “S. 419: Public Safety Officers’ Benefits Improvement Act of 2017.” https://www.govtrack.us/congress/bills/115/s419. Accessed Aug. 18, 2017.

This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

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

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Retirement Stages

What’s so difficult about planning for retirement? You save; you retire; you spend.

If only it were that straightforward. Today’s pre-retirees and retirees have so much more to consider. Longer lifespans mean longer exposure to the possibility of inflation eroding your purchasing power. And then there are these concerns:

– The global economy and its impact on everything from market volatility to interest rates to unemployment and wages
– The decrease in company pensions and greater burden for retirees to provide more of their retirement income
– The long-term solvency and viability of Social Security
– How future legislation and the political environment might impact Medicare

 

It’s a lot to think about. That’s one reason it’s important to work with a knowledgeable financial professional to help you consider the factors that might impact your retirement. The good news is that many retirees now have the time, thanks to a longer lifespan, to plan for and enjoy a longer retirement. When it comes to your retirement income planning needs, we may be able to help with that; just give us a call. As an independent financial services firm, we help people create retirement strategies using a variety of insurance products to custom suit their needs and objectives.

Much as our younger adult life can be divided into stages — college, job, marriage, family and all manner of advancement rungs in a career — retirement can be broken into separate categories as well. It’s not all travel and country club parties, gardening and golfing, grandchildren and book clubs. In fact, those activities are generally characteristic of the first stage of retirement, when we tend to spend more time with family and friends, pursuing hobbies, travel and other “bucket list” items.1 

One of the best things about the first stage of retirement is that Mondays are no longer dreaded; they’re just another day of the week.It may take some time, but some retirees learn to replace their office wear for roomy, comfortable workout pants and soft tees. Put these on, and you can just feel the stress melt away.2

During the second stage of retirement, you might not travel quite as much. You may even think about moving closer to your children or to a community with other people your same age. These are good instincts because it’s important at this stage to stay socially connected. 3

During this stage, if you’re concerned about the possibility of outliving your income, it’s natural to cut back on expensive activities like travel. In fact, now that you spend more time at home, you might consider getting an easy, low-stress part-time job. Or you could join the gig economy, working from home.4 It’s important to remain engaged, and, of course, extra money coming in wouldn’t hurt.5

In the third stage, when retirees move past age 80 or later, they may need daily assistance.6 Again, it’s a good idea to set up some type of regular relationship to avoid isolation and stay connected — even if you remain quite independent. This could involve sharing meals with a companion on a regular basis. Have someone you can call to change a lightbulb, move furniture around for better mobility or help you bake an old family recipe — and share it over a cup of coffee.

Each stage requires some degree of planning. Even during a “freewheeling, high-octane” first stage, you’ll need to lay some of the groundwork to help ensure your latter stages of retirement are enjoyable. This includes eating healthy, establishing an exercise routine that is sustainable throughout your lifetime and engaging in activities you can continue through old, old age. And, perhaps most important, work on strengthening relationships that will be with you forever.

 

Content prepared by Kara Stefan Communications.

1 BoomingEncore.com. “Three Different Stages of Retirement” http://www.boomingencore.com/three-different-stages-retirement/. Accessed Aug. 6, 2017.
2 Business Insider. April 16, 2017. “I retired at 52 with a $3 million net worth — here are 10 things that surprised me about early retirement.” www.businessinsider.com/early-retiree-shares-10-things-that-surprised-him-after-he-quit-his-job-2017-4. Accessed Aug. 6, 2017.
3 BoomingEncore.com. “Three Different Stages of Retirement” http://www.boomingencore.com/three-different-stages-retirement/. Accessed Aug. 6, 2017.
4 Mary Beth Franklin. Investment News. April 21, 2017. “Retirees embrace the gig economy.” http://www.investmentnews.com/article/20170421/BLOG05/170429976/retirees-embrace-the-gig-economy. Accessed Aug. 6, 2017.
5 Katy Read. Star Tribune. Sept. 4, 2016. “Get back to work! Working past ‘retirement age’ is beneficial.” http://www.startribune.com/experts-agree-working-past-retirement-age-is-beneficial/388305801/. Accessed Aug. 6, 2017.
6 BoomingEncore.com. “Three Different Stages of Retirement” http://www.boomingencore.com/three-different-stages-retirement/. Accessed Aug. 6, 2017.

This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

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

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Gender Disparities in Retirement

Everywhere we turn, it seems, there’s an article or newscast about how women are at an economic disadvantage, especially regarding lower wages. Just imagine how much more women could contribute to economic growth if such disadvantages were eliminated.

But we want to work toward counteracting some of those challenges, particularly where retirement income planning is concerned. Even married couples with their retirement savings on track may not be aware of different scenarios that could potentially leave a widow with an income shortfall during her retirement years. We’re happy to review retirement income strategies for your household and make recommendations tailored for your financial situation; just give us a call.

In the meantime, let’s take a look at some of these gender disparities and how they can impact a woman’s personal financial future. For example, women tend to borrow more for college undergraduate student loans than men and take longer to pay them back.1

Presumably, one of the reasons it takes them longer to pay back student loans is that women, on average, tend to earn lower salaries than men. For example, in the United States, white women are paid about 76 cents on the dollar relative to white men.2 Black women receive only 67 cents per dollar.3 This may seem like a woman’s issue, but it’s not. In theory, the longer it takes to pay off student loan debt, the less women can save for retirement, and the less women save, the more reliant they might be on Social Security for retirement income. A demographic that relies heavily on Social Security for retirement income could potentially cause an increase in FICA taxes, which can affect everyone.

One of the ways working women can improve their retirement income situation is by working longer. There are several advantages to this. First, for women who take time out of the workforce for raising children and general caregiving, working longer provides more tax years from which the 35-year calculation for Social Security benefits is drawn.4 Second, women tend to live longer, so they could feasibly work until an older age.5 And finally, researchers have determined that the average woman who works to age 70, rather than retiring at 62, can increase her monthly Social Security check by 12 percent.6

Another area in which women can improve is financial literacy. In a recent study, 18 percent of women ages 60 to 74 passed a 38-question quiz on retirement income topics, compared with 35 percent of men the same age.7 Fortunately, this is an area in which any woman can take the initiative to pursue on her own. It doesn’t require wage legislation passed by Congress; salary negotiation skills with employers; or shortening the time spent out of the workforce for caregiving.

The more women can learn about retirement income planning, the better prepared they can be for their long-term financial future. Planning for retirement is a skill that we believe should not be delegated to fathers, husbands, boyfriends and male children. At the very least, it’s a shared responsibility — but be aware that chances are good a woman will be managing money on her own at some point during adulthood due to divorce or widowhood.8

 

Content prepared by Kara Stefan Communications.

1 Kim Blanton. Center for Retirement Research at Boston College. June 8, 2017. “Is There a Student Loan Gender Gap?” http://squaredawayblog.bc.edu/squared-away/is-there-a-student-loan-gender-gap/. Accessed July 31, 2017.

2 AAUW. Spring 2017. “The Simple Truth about the Gender Pay Gap.” http://www.aauw.org/research/the-simple-truth-about-the-gender-pay-gap/. Accessed July 31, 2017.

3 Casey Quinlan. ThinkProgress. July 31, 2017. “Black women’s ‘equal pay day’ reminds us how persistent the wage gap is.” https://thinkprogress.org/black-women-wage-gap-ca285791a371. Accessed July 31, 2017.

4 My Retirement Paycheck. National Endowment for Financial Education. 2017. “How are Social Security benefits calculated?” http://www.myretirementpaycheck.org/Social-Security/How-are-benefits-calculated. Accessed Aug. 7, 2017.

5 Social Security. “Calculators: Life Expectancy.” https://www.ssa.gov/planners/lifeexpectancy.html. Accessed Aug. 7, 2017.

6 Kim Blanton. Center for Retirement Research at Boston College. May 18, 2017. “Women Get a Bigger Social Security Bump.” http://squaredawayblog.bc.edu/squared-away/women-get-a-bigger-social-security-bump/. Accessed July 31, 2017.

7 Christopher Robbins. Financial Advisor. July 27, 2017. “4 Out Of 5 Older Women Flunk This Retirement Literacy Quiz.” http://www.fa-mag.com/news/4-out-of-5-older-women-flunk-this-retirement-literacy-quiz-33885.html?section=. Accessed July 31, 2017.

8 Susan L. Hickey. Newsmax. June 23, 2017. “Many Women Will Spend Their Later Years Alone; Are They Ready for That?” http://www.newsmax.com/Finance/Personal-Finance/older-women-alone-financially/2017/06/22/id/797691/. Accessed July 31, 2017.

We are able to provide you with information but not guidance or advice related to Social Security benefits. Our firm is not affiliated with the U.S. government or any governmental agency.

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

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

 

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Making Friends, Strengthening Relationships

In the early days of childhood, we start picking up communication skills that are continually developed throughout our lives. We make close friends, stay in touch with them and make sure we’re there for the people we care about.

But during retirement, it may take more effort to maintain those friendships. It’s important to remember that while we don’t typically lose these skills, we might lose the motivation to use them. Here are a couple of good reasons to keep up those social connections in retirement:1

·       A study by the Rush Alzheimer’s Disease Center in Chicago found that highly social seniors had a 70 percent lower rate of cognitive decline compared to those who were less social.

·       Researchers at the University of Alabama Birmingham found that using the internet was associated with a 30 percent decrease in depressive symptoms.

As financial professionals, we work with retirees every day helping them create retirement income strategies using a variety of insurance products. We’ve seen firsthand how easy it is to become more isolated when you stop working. You might find that by attending a financial seminar or client workshop, you’ll meet people in the same situation as you. Even if you feel like your retirement income strategy is well-established, we encourage you to continue monitoring your finances and participate in events where you not only have the opportunity to learn, but to spend time with people who may share your same interests and concerns.

When pre-retirees were asked what they would miss most about not working anymore, 17 percent predicted they’d miss their daily social interactions. However, when actual retirees were asked what they missed most from work, that number doubled — 34 percent said they missed their social connections from work.2

Another thing that’s different about retirement is that you’re no longer competing for career opportunities, so priorities can change. Hobbies you might have pursued during your career, like golf and tennis, may have been important to expand your network. But retirement can be a time for careful reflection; recognize that your energy, health and financial resources may be more limited now, so it’s important to prioritize what you want to do irrespective of anyone else’s expectations.3

By the same token, you may want to explore a deeper relationship with someone who’s been right there with you for decades: your spouse. Find out what your partner is like now. As you spend more time together, you might be surprised at how they’ve changed since you started working, and maintaining your relationship with your spouse can enhance your journey through retirement.4

New research has found that friendships in retirement may be even more valuable than family relationships. The quality of friendships proved to be a predictor of whether someone would acquire a chronic illness as they aged, whereas the quality of family relationships was not.5

Another interesting aspect of senior friendships is that women are more likely than men to make friends with others who are either much younger or much older. Researchers hypothesize this is because men tend to bond over activities, while women create more of an emotional connection — they don’t have to plan an event to nurture their relationships.6

One reason this phenomenon is particularly important is because seniors tend to lose similarly aged peers as they grow older. By establishing relationships with people from a younger generation, you’re more likely to maintain those friendships throughout your life.

 

Content prepared by Kara Stefan Communications

1 NEA. 2017. “The Value of Maintaining Social Connections Throughout Retirement.” https://www.neamb.com/the-value-of-maintaining-social-connections-throughout-retirement.htm. Accessed July 13, 2017.

2 Roger Whitney. The Retirement Answer Man. March 6, 2017. “One thing to do now to improve your social life in retirement.” http://rogerwhitney.com/social-life-in-retirement/. Accessed July 13, 2017.

3 Margaret Manning. Sixty & Me. 2016. “How to make friends as an adult in 4 simple steps.” http://sixtyandme.com/how-to-make-friends-as-an-adult-in-4-simple-steps/. Accessed July 13, 2017.

4 Emily Brandon. U.S. News & World Report. May 22, 2017. “7 Tips to Maintain Social Connections in Retirement.” https://money.usnews.com/money/retirement/aging/articles/2017-05-22/7-tips-to-maintain-social-connections-in-retirement. Accessed July 13, 2017.

5 Susie Neilson. New York Magazine. June 16, 2017. “In Old Age, Friendships Might Matter Even More Than Family.” http://nymag.com/scienceofus/2017/06/in-old-age-friends-might-matter-even-more-than-family.html. Accessed July 13, 2017.

6 Verena von Pfetten. New York Magazine. May 24, 2017. “When Your Best Friend Is Younger than Your Daughter.” http://nymag.com/scienceofus/2017/05/why-cross-generational-female-friendships-are-on-the-rise.html. Accessed July 13, 2017.

This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.

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

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Recent Articles

  • Legislative Updates

    With so much attention focused on the rifts among and between political parties and the news media, it may seem as if little actual legislation…

  • Retirement Stages

    What’s so difficult about planning for retirement? You save; you retire; you spend. If only it were that straightforward. Today’s pre-retirees and retirees have so…

  • Gender Disparities in Retirement

    Everywhere we turn, it seems, there’s an article or newscast about how women are at an economic disadvantage, especially regarding lower wages. Just imagine how…