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A Monthly Newsletter Source of Financial Sources • The Chief Advantages of Long Term Care (LTC) Insurance • If You Are Thinking About Retirement, This is a Good Time to Reassess Your Risk Tolerance. • Perfect book for tax time --Paper Clarity at a Glance: What to Keep and When to Let Go by Laura Moore, M.Ed. • Don’t rush into any major residential real estate decision and reject viable options because they seem like a lot of work. • Renting vs. Selling Your Residence, Based on Inaccurate “Back of the Napkin” Calculations, is Usually a Very Bad Decision Over the Long Term. • Larry Uyeno Joins Stadion Money Management as Regional Sales Rep for the West Coast.
---------------------------------------------------------------------------------------------------------------------------- The Chief Advantages of Long Term Care (LTC) Insurance The major focus most people have on LTC Insurance is the benefits paid for home care, assisted living, and nursing care, but there are other chief advantages potential buyers should know about. Some LTC insurance policies today may include some version of care support services to offer professional advice to policyholders about what resources they have in their communities that can help develop a plan of care, work and communicate with the families and other caregivers, and lastly in many cases, offer provider discounts through independent networks*.
Many states now have various programs to encourage consumers to purchase LTC insurance policies that may help provide broad protection of their assets and sometimes tax incentives too. Ask your agent if there are programs like that in your State. For individuals in their 20’s to 40’s, there are three major reasons someone might consider purchasing LTC insurance.
A long term care insurance policy describes coverage under the policy, exclusions and limitations, what you must do to keep your policy in force, and what would cause your policy to be discontinued. Please contact a licensed agent or John Hancock for more information, costs, and complete details on coverage. Stuart H. Armstrong, CFP®, CLTC, a John Hancock Life Insurance Company (U.S.A.) agent with Centinel Financial Group, a Boston Massachusetts area firm. He can be reached at 617-424-0005 or sharmstrong@jhnetwork.com If you’re thinking about retirement, this is a good time to reassess your risk tolerance. If you are one of the many baby boomers getting closer to retirement, this is the time to reassess your investment risk tolerance in light of market turbulence. By risk tolerance, I mean the ability to withstand volatility – ups and downs in the value of your portfolio. While volatility can help during the wealth accumulation phase, it can be detrimental during distribution. In fact, analyses show that the more volatile the portfolio, the greater the probability of actually depleting assets during retirement. And the last thing a retiree wants to envision is ending up penniless during the golden years. There are numerous tools available online to evaluate risk tolerance, ranging from simple questionnaires to more complex surveys that seek to extract your investing emotions and behaviors. While there is no one size fits all solution, you should review a few of them and find the one that makes the most sense for you. Keep in mind that assessing risk tolerance is both a science as well as an art. So, you can think of the suggested asset allocation as a guideline rather than an etched in stone mandate. One of the more effective tools I have seen involves backing into a recommended asset allocation based on your cash needs and portfolio value. This type of analysis runs hundreds of iterations based on actual historical asset class performance to determine the probability of meeting your cash flow needs given a certain asset mix. Regardless of how you get there, given the current state of the economy and financial markets, folks who are planning to retire in the next five to ten years should reassess their investment risk tolerance in order to ensure that they are on track to meeting their retirement goals. Debra A. Neiman, CFP, President, Neiman Associates Financial Services, Arlington, MA, is the author “Money Without Matrimony.” She can be reached at 781-641-5700. deb@neimanonline.com PERFECT BOOK FOR THE NEW YEAR - MEDIA COPIES AVAILABLE Paper Clarity at a Glance: What to Keep and When to Let Go Above all, this book offers peace of mind by reducing people’s fear of making a mistake, getting audited or wasting time searching for answers. No more frustration plowing through dense, complicated material. No more searching everywhere. Short, yet comprehensive, it’s all here — at a glance. Additionally, the book provides a strong foundation for dialogue between family members and professional advisors. Anyone who wants to bring order and greater security to their lives could use this book, especially during these turbulent times. Possibly for the first time, readers will be able to reduce their piles of paper and worry. Paper Clarity’s added value is in its unique design, carefully selected to ease learning, prevent information overload, and invite readers to approach and understand this otherwise dry material. Its size, color, binding, and feel all help make what is typically dreaded, potentially pleasant. Diagrams, 18 tips, and clarity on storage, taxes and audits all add more ease. The Paper Clarity Chart is the core element of this valuable resource. It includes a comprehensive list of over 100 personal (legal, financial, and medical) documents and records, information on how long to keep each document, and when one can shred or recycle. The book goes beyond getting organized; it helps people make good decisions. Laura Moore holds a Master’s Degree in Education from Harvard Graduate School of Education, and works as a consultant, workshop leader, professional speaker and writer. She is the founding principal of ClutterClarity at Home, teaching clients how to achieve sustainable relief from their clutter, and bring order and more enjoyment to their lives. She can be reached at Laura@ClutterClarity.com or 617-349-1661. To learn more, visit her website http://www.ClutterClarity.com or Blog: http://www.ClutterClarityatHome.com. The book is available on Amazon.com. For your copy of this book, send a request to beth_chapman@inkair.com with “Clarity” in the subject line. Include your mailing address. Don’t rush into any major residential real estate decision and reject viable options because they seem like a lot of work. Many individuals find themselves in the difficult spot of trying to sell their home while it is currently worth less on the open market than the amount of the mortgage still owed on the house. In such a case, the owner will have to bring money to the closing in order to satisfy the mortgage. There can be few things more depressing to a homeowner than having to pay to sell their own home. A recent example shows how costly trying to sell a home can be. A homeowner was moving to a new town and needed to sell his home. He had purchased the home in 2006. The market value of the home had fallen significantly since his original purchase. His financial advisor recommended that instead of selling the house he should attempt to rent the house. By renting he could cover the cost of the mortgage or come close while he waited for the housing market to improve in the next year or so. The client considered the idea, but he felt the pressure of trying to start his new job, move his family and find a place to rent in the new town that it was too much to try to be a landlord as well. He made a surprise call just before Christmas saying he did have an offer on the house. The idea of being done with the house was too tempting. He just needed to bring $37,000 to the table and in a hurry. To get the $37,000 he had to take a significant distribution from his IRA. This distribution along with the significant federal and state income taxes and the 10% federal penalty for an early withdrawal created a big hole in his retirement account. He wanted to close the deal more than he wanted to wait for a better opportunity. This sad story has an even worse end when the buyer backs out of the deal. Apparently, she thought she qualified for the first time home buyer tax credit, but she didn't. The tax credit was the incentive for her to buy the house and when she lost it, she couldn't afford to close the deal. After hearing about the debacle, the advisor recommended that the homeowner consider suing her for specific performance or going after the mortgage company for failing to adequately vet the buyer. In any event, it was recommended that he put the $37,000 back into his IRA before 60 days went by from the initial withdrawal. The moral here is to not rush into any major decision and to not reject viable options because they seem like a lot of work. The easy way can often be the most expensive way. Donald L. McCoy, J.D., CMFC -- Planners Financial Services, Inc., 952-835-9000. Minneapolis, Minnesota. Registered investment adviser and subsidiary company Montgomery Investment Management, specialize in the management of no-load mutual fund portfolios for individuals and retirement plans designed to protect capital by reducing risk. 952-835-9000 - pfshim@usinternet.com. Renting vs. Selling Your Residence, Based on Inaccurate “Back of the Napkin” Calculations, is Usually a Very Bad Decision Over the Long Term. In good or bad markets, well-intended families and investors look to real estate as a way to help achieve financial independence… a time when the property is scheduled to be free and clear of debt, and is expected to rain down cash flow for the balance of their lives. In the current market, where sellers are not getting “their price”, this idea flourishes. Unfortunately for many families who are working hard to make financial independence work and have little margin for error, renting the residence could be a decision that places them significantly further behind their goals. There are at least half dozen factors that could create problems for many families.
Long term issues are different and include:
If you are considering renting rather than selling, make certain you have a financial advisor with expertise in real estate check your “back of the napkin” calculations. Hanging onto a property may be a really bad decision given the current economic crisis and instability in real estate prices. Rich Arzaga is Founder and President, Cornerstone Wealth Management, San Ramon, California, a life planning company specializing in providing options and solutions for residential and commercial real estate investors. He is also an instructor in the nationally-recognized financial planning certification program at U.C. Berkeley, and teaches the highly-acclaimed Real Estate Investments course at U.C. Santa Cruz and U.C. Berkeley. Rich can be reached at rich@consultrich.com or toll free (888) 290-9900. Securities and Investment advice through Associated Securities Corp. (ASC), Member FINRA/SIPC and a registered investment advisor. Additional Advisory and Investment Services offered through Cornerstone Wealth Management Inc., a registered investment advisor not affiliated with ASC. CA Insurance License No. 0D92796 Avoid the Hassle: Choose to Outsource Transition Tasks when Changing Broker/Dealers. One advisor likened it to being kicked in the stomach twice. He had just changed broker dealers when the new B/D was purchased and he had to start all over again. He estimated that serious revenue had been lost. Others say they have lost a full quarter of revenue, up to 25%. No one has extra staff standing around to process excess paperwork. It is always a distraction from the team’s primary sales and customer service efforts. There are several reasons why changing broker/dealers is such a tough job and why outsourcing should be considered. Office staff who have the skills to handle your transition tasks already have a full plate handling current needs. Advisors hire three skill sets:
When any of these important team members get sidetracked from their regular tasks to handle parts of the broker/dealer transition, it quickly becomes apparent that business is going to suffer during that transition. But there is the opportunity to outsource your transition work to a vendor who has developed systems and skilled staff to handle your work. Look carefully when investigating someone outside your office to trust with the very crucial task of handling transition paperwork. You know that mistakes equal client dissatisfaction very quickly. The work required to move to a new broker/dealer sounds straight forward but includes many detailed steps, such as the following:
In addition, an outsourcing provider for a broker/dealer can support on-site staff by processing all new business and following through until the business has been moved and funded. The trained staff at the outsource provider can confirm that all paperwork is complete and filed correctly. The out source provider can also help a broker prepare for meetings by consolidating all new account paperwork and then create reports on the Albridge platform and others. Calendar management is possible with an outsource provider. Trained staff can call out to an advisor’s existing clients to schedule appointments. Prospecting calls can be made and even in-bound calls can be handled. An outsource provider can also provide seminar preparation help, consolidating handouts and mailing to broker before the presentation. When a broker knows that his practice would be greatly enhanced and empowered by converting to an electronic document imaging, but there is no time or appetite to make the conversion, an outsource provider can step in and make it happen. It is no longer necessary for an advisor or broker to suffer the expense and demand of processing day-to-day documents or the spikes of transition to a new broker/dealer. Consider an outsource provider who has the understanding and skill to provide meaningful, accurate and timely assistance to your paperwork hassles. Glen D. Shepherd, My Office Gurus LLC, provides the expertise, resources, and solutions that give the financial professionals the freedom to successfully capitalize on their own talents and strategically overcome their firm’s challenges. He can be reached at info@myofficegurus.com or 402-359-1452. Go to www.myofficegurus.com for further information. Larry Uyeno Joins Stadion Money Management as Regional Sales Rep for the West Coast. Stadion Money Management, Inc. announces that Larry Uyeno has joined the firm as it continues to develop a support system for all partnering wholesaler distribution networks. “Our purpose is to increase responsiveness to advisors selling Stadion’s asset management products”, says Jud Doherty, President. "We expect to harness Larry's 20 years of past industry experience with such notable firms as Scudder Investments and Lincoln Financial , to bring immediate value to wholesalers and advisors focusing on the needs of financial professionals and their clients as we bring our message to the financial services marketplace.” Stadion’s offerings include separately managed accounts, mutual funds, and its Stadion Retirement plan advisory services. Last year Stadion assets under management tripled from $1 to $3 Billion, reflecting the widespread acceptance of its lower risk approach to managing money. In the last two years, the firm has been featured on the CNBC and Bloomberg networks, as well as Barron's, Investor's Business Daily and CNN. Uyeno will help develop a responsive support system for all Stadion’s partner firm wholesalers including Mutual of Omaha, Guardian Life Insurance Company, Lincoln National and Genworth. For further information: |
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