Pat and Kelly, new parents, made a couple monthly budget adjustments upon the arrival of their first child. First, due to the added cost of day care and dependent health insurance, they decreased the amount they were saving for a house. And second, they agreed to review their life insurance needs. Pat’s sister suggested they buy $500,000 life insurance policies like she and her husband did when their child was born. Given the disparity in...
For years it was assumed that tax planning was reserved for the wealthy. While wealthy individuals will see the most benefit from tax planning, with big changes looming for the 2018 tax year, even middle-income earners can reap the benefits of tax planning. Basic tax planning starts with your AGI or Adjusted Gross Income. This is your total income after any adjustments or credits have been applied. Reducing your AGI is the number one goal...
For young families, the immediate cost of raising a child can be testing financially. Just when you thought you were in the clear from student loan repayments and your never-ending car lease, a hungry mouth appears with countless sleepless nights and a hefty price tag attached. But diapers, baby formula, and stuffed toys aren’t the only financial burdens parents should worry about. In the hypercompetitive world we live in today, a post-secondary degree is essential...
A tight housing market is leading many young adults to postpone purchasing a home, choosing instead to go the rental route. Many simply don’t want to be encumbered with a mortgage and all of the responsibilities that go with home ownership. As a renter, it’s tempting to think that all of your responsibilities and worries shift to your landlord; however, you’ll be in for a shock if the building you’re living in is damaged by...
Generally speaking, conversations about life insurance revolve around whether you should buy term or permanent insurance. However, every decision to buy life insurance begins with deciding what is the right amount of life insurance. And, integral to determining the right amount of life insurance is understanding the role of your Social Security Survivorship Benefit (SSSB). What is the Social Security Survivorship Benefit? If you qualify for Social Security and pass away, a SSSB may provide...
Here’s a number most people would like to see on an annual statement: 21.6 percent. That was the annual return for the Standard & Poor (S&P) 500 Index during 2017. In general, U.S. stock indices did quite well last year – and the year before, too. For instance, the S&P 500 Index was up 11.8 percent in 2016.1 While no one can invest directly in an index, recent returns make it easy to understand why...
So you’ve got your degree, now what? These days, only on television is landing your dream job after graduation a thing that could actually happen. The reality is, in a recent survey of 503 - recent grads - entry-level job seekers by national career matchmaking firm GradStaf, “nearly 70 percent of respondents were either unemployed or working in a full-time non-professional job to make ends meet.” Pair that with the idea that ‘the average cost...
The last bear market in bonds began in the middle of the last century and lasted for about 31 years. Some investors who bought bonds in 1950 locked in relatively low rates of return for a very long time. On January 1, 1950, 10-year U.S. Treasury bonds yielded 2.3 percent.1 As interest rates moved higher, the market value of those bonds diminished. The good news was people could hold bonds to maturity and expect to...
Retirement and Social Security are inextricably linked. Not only did Social Security help establish the official U.S. retirement age at 65, it also provides a significant portion of today’s retirees’ incomes. Some of the earliest company pension programs began paying benefits at age 65.1 The economics made sense since life expectancy for a 30-year-old at the turn of the century was about 65 years.2 When the U.S. government was working through the economics of old-age...
You’re 25 and feeling alive. You’re settling into life after university, paying off your debts and slowly figuring how to “adult”. But with the responsibility of bills, rent, and even keeping up social appearances, prioritizing financial planning is something far too often pushed to the side. Of course the nagging idea that maybe starting a 401-K might not be the worst thing, however it’s hard to fully take control of your financial future when the...
The world’s first central bank offered unprecedented convenience. It gave 17th century Swedes the option to pay with paper notes rather than 40-pound copper plates, which were the currency units of the Swedish empire at the time. Historically, it may have been one of the few actions taken by a central bank that has been relatively uncontroversial.1 It seems as though central banking in the United States always has been hotly debated. Early in our...
Healthcare. Retirement. Those may be two of the most stressful words in the English language today. Especially when you include them both in the same sentence. For instance, a married couple that saves $326,000 has a 90 percent chance of having enough money to pay healthcare expenses in retirement. A single man would need to save $116,000 for retirement healthcare expenses, and a single woman about $131,000 to have the same odds, according to the...
