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Political Environment: The Battle Begins in Earnest

The economy is in good shape for starting a new year, but lines have already been drawn in the sand where our political engine is concerned. Republicans have a long list of pent-up priorities, including the Keystone Pipeline, repealing portions of the Patient Protection and Affordable Care Act and reversing the president’s executive action enabling about 5 million undocumented immigrants to remain in the U.S.

Though wielding somewhat less power, Democrats and the administration will continue to focus on tax reform, infrastructure funding and foreign trade.

[CLICK HERE to read the report, “CIO Outlook: Themes for 2015 and Beyond,” from Merrill Lynch, Winter 2015.]

[CLICK HERE to read the article, “GOP agenda for Congress: Challenge Obama, prove they can govern,” from CNN.com, Jan. 6, 2015.]

[CLICK HERE to read the article, “With GOP Congress incoming, Obama plots his 2015 strategy,” from CBSNews.com, Jan. 3, 2015.]

Despite holding a majority in both houses of Congress, Republicans may have trouble overturning previous legislation. However, there are strategies available to help them. One is the budget reconciliation process, a one-time per year tactic that requires only 51 votes in the Senate as opposed to the 60 needed to overcome a Democratic filibuster. Note that this tactic may be used only for budget-related items. For example, it could repeal tax subsidies offered on the health care exchanges, but it cannot be applied to the individual or employer health care mandates.

[CLICK HERE to read the article, “Republicans eye reconciliation route in bid to repeal Obamacare,” from The Washington Times, Jan. 1, 2015.]

[CLICK HERE to read the article, “Republicans to Chip at Obamacare by Redefining Work Hours,” from Bloomberg, Nov. 7, 2014.]

Republicans may be able to successfully pass laws in both chambers of Congress, but the president has the power to veto, and he has confirmed that he will do so for any legislation that threatens the viability of the health care act. This may prove to be a challenging prospect for opponents, because to overturn a veto they must have a two-thirds vote in both the House and the Senate.

[CLICK HERE to read the article, “Obama on GOP Congress: I’ll probably need my veto pen,” from USA Today, Dec. 29, 2014.]

While the new dynamic in Washington is sure to make for interesting headlines this year, it’s important that we don’t become distracted by politics. When it comes to making our own financial decisions, some of the most important factors are our personal goals, tolerance of market risk and timeline for when we need money. Please contact us for help in making independent decisions this year.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.

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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2015 Outlook

Last year left the U.S. in decent financial shape. Oil prices tanked and the U.S. dollar surged. Inflationary pressure is low, and the stock market ended the year strong. The analysts at Fidelity believe this positive environment should continue at least early into 2015. The economy is in a mid-cycle expansion with solid employment gains and wage increases – although not yet across the board – and the outlook for consumers is good.

[CLICK HERE to read the article, “December 2014 Market Update,” from Fidelity, Dec. 12, 2014.]

[CLICK HERE to read the article, “Five themes for 2015,” from Fidelity, Dec. 23, 2014.]

Over at Merrill Lynch, analysts are similarly positive. They expect the economy to expand by 3.3 percent in 2015, energized by consumer spending now that individual debt has been reduced. On the job front, analysts expect the economy to generate around 240,000 jobs a month and the unemployment rate to continue dropping.

[CLICK HERE to read the report, “CIO Outlook: Themes for 2015 and Beyond,” from Merrill Lynch, Jan. 2015.]

In the real estate market, housing prices are expected to continue rising but not at the same high growth rate as 2014. Thanks to predicted higher mortgage rates, there will be fewer buyers and the face of those buyers is expected to change. That’s because millennials (young adults under the age of 35) are projected to overtake Gen X (those 35 to 50 years old) as the largest group of homebuyers in the U.S. this year.

[CLICK HERE to read the article, “Housing Outlook 2015: 11 Predictions from the Experts,” from Forbes, Dec. 18, 2014.]

[CLICK HERE to read the article, “4 predictions for the housing market in 2015,” from Fortune, Dec. 9, 2014.]

In the world of technology, one expert offers a handful of predictions for 2015. Among them, email attachments will evolve into cloud-based links (largely for security reasons), tablets will experience a “surprise comeback” to outsell laptops and there will be a greater focus on security for all devices in the wake of the 2014 breaches at Target, eBay, J.P. Morgan, Home Depot, Nieman Marcus, P.F. Chang’s, Michaels, Goodwill and Sony.

[CLICK HERE to read the article, “Forecast: Workplace Trends, Choices and Technologies for 2015,” from Recode.net, Dec. 18, 2014.]

Within the health care sector, the new Congress is likely to take aim at targeted points of weakness in an attempt to block the implementation of parts of the Affordable Care Act. The Supreme Court is already on tap to hear one case concerning the law, and it could end up being a busy year for the legal system.

[CLICK HERE to read the article, “The Supreme Court Decides to Hear King v. Burwell: What Are the Implications?” from The Commonwealth Fund, Nov. 7, 2014.]

On the other hand, do-it-yourself health care appears to be a trend on the rise. Innovative wearable tracking devices, mobile apps and cost-savings due to increasing transparency in the medical field are all expected to gain momentum in 2015.

[CLICK HERE to read the article, “10 health care trends to watch in 2015,” from Employment Benefit News, Dec. 2014.]

[CLICK HERE to read the article, “Top Trends Influencing Healthcare IT In 2015,” from CXO Today, Dec. 24, 2014.]

It’s always an exciting time when we enter a new year. It’s an ideal opportunity to re-evaluate current plans, update them and/or make new ones. As always, if we can help in any way to assess your retirement income plans for today and help you feel more confident in tomorrow, please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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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Where Does the Money Go?

In December, Congress passed the federal budget for fiscal year 2015 at the last possible moment, avoiding yet another government shutdown. You have to wonder why this is such a difficult process.

Within our own households, there are often two people — sometimes with diametrically opposed opinions on how money should be spent — who fight these battles and resolve them on a daily basis. Few families that have the resources available let things fester to the point where the mortgage or utilities go unpaid or they fail to shop for food. In other words, if we have the money, we would never let our household shut down while we argue over who gets a gym membership this year or who gets a new car.

[CLICK HERE to read the article, “What’s in the spending bill? We skim it so you don’t have to,” from The Washington Post, Dec. 10, 2014.]

Like most households, there are certain expenses that must be paid and are non-negotiable. Then there are those that are more subjective. In the finance world, we call that discretionary income. Once all the necessities are paid for, we get to determine how we want to invest or spend the excess money. Since the national budget is largely funded by taxes, many people and politicians believe that taxes should be cut and there should be no excess income. However, mostly politicians battle over where that excess funding should be spent, such as toward social programs, border patrol, the military or job growth. It’s a matter of establishing our country’s values and priorities.

[CLICK HERE to read the article, “What’s Ahead for Americans in 2015?” from Gallup, Jan. 1, 2015.]

Consider the long-term prospects of funding innovation versus social programs. Technology has enabled greater productivity and cost savings in manufacturing and now is making inroads into many service jobs. For example, a patient’s MRI can be sent digitally to be read by a highly skilled radiologist in Bangalore, India, for substantially less than one in New York. Eventually, computer software may be able to do this more accurately and even cheaper. So could funding innovation eventually reduce highly skilled jobs?

[CLICK HERE to read the article, “What happens when automation leads to job losses?” from World Economic Forum, Jan. 2, 2015.]

In the U.S., nearly 20 percent of our children live in poverty — the highest rate among all developed countries except Romania. Yet we spend more money educating wealthy children than poor children. Despite whatever circumstances land an adult in poverty, children are helpless victims and education can be the surest path to a better life. Not funding education opportunities for the poor creates a perpetual loop of more public expense, because impoverished children experience disproportionately higher rates of learning disabilities and poor health. With fewer people developing much-needed higher level job skills, our economy grows at a slower rate. So can less funding for education programs stunt our long-term economic development and global competitiveness?

[CLICK HERE to read the article, “Inequality and the American Child,” from Moyers & Company, Dec. 30, 2014.]

[CLICK HERE to read the report, “Income and Poverty in the United States: 2013,” from U.S. Census Bureau, Sept. 16, 2014.]

We, by default, must trust our political leaders to set our national values, and largely they do so by directing where funding should go each year. But within our own lives, each of us is the CFO of the household income and determines where our discretionary income goes. If we can help you set a more productive budget for this year — one that reflects your personal values and priorities — please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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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American Pride

Bye China. Bye India. Buy Trenton. Who can forget the catchy 1980s union advertising jingle, “Look for the union label”? You can check out one of those ads at the link below — it’s almost worth a look for the retro-fashions alone.

[CLICK HERE to view, “Look for the Union Label 1981 classic ad,” from YouTube.com, uploaded Aug. 2009.]

After years of slow economic growth, has America truly recovered? Perhaps not for every single person in the country, but pride in Americana appears to have rebounded nicely. Take the manufacturing industry, for example. Cheaper labor overseas resulted in the loss of 5.8 million factory jobs between 2000 and 2009. Yet since the financial crisis, economists report there has been a renaissance in American manufacturing. An estimated 150 companies have “reshored” (moved positions from overseas to the U.S.) since 2010.

[CLICK HERE to read the article, “ANALYSIS: The Renaissance of U.S. Manufacturing Is Real but Maybe Not What You Think,” from International Business Times, Feb. 4, 2014.]

Just recently, New Jersey passed a bill requiring all public contracts to use goods made in America. Some testimonies against the “Buy American” bill predicted that state departments’ inability to select cheaper foreign goods could increase the cost of living in New Jersey by 20 percent. Despite this, the majority of the New Jersey Assembly voted in favor of the bill, many reasoning their vote was about patriotism and the importance of confidence in the competitive abilities and quality of American manufacturing.

[CLICK HERE to read the article, “‘Buy American’ bill passes N.J. Assembly,” from NorthJersey.com, Dec. 18, 2014.]

[CLICK HERE to read the article, “New Jersey Seduced by the False Promise of ‘Buy American’ Laws,” from Forbes, Dec. 18, 2014.]

The Obama Administration also recently initiated steps to promote manufacturing in America. More than $290 million will be invested in two new private/public manufacturing competitions to benefit the Department of Energy and the Department of Defense.

[CLICK HERE to read the article, “President Obama Launches Competitions for New Manufacturing Innovation Hubs and American Apprenticeship Grants,” from the White House, Dec. 11, 2014.]

[CLICK HERE to read the article, “US to Get Two New Manufacturing Hubs — Smart Manufacturing and Flexible Hybrid Electronics,” from Industry Week, Dec. 11, 2014.]

On an individual basis, Americans seem to be doing their part to “buy American” as well. Given a choice between a USA-made product and an identical product made abroad, 78 percent of Americans would rather buy the American product. Perhaps years of handling “Made in China” (India, Indonesia, etc.) tchotchkes have influenced an expectation of higher quality among American-made goods, because 60 percent of Americans say they’d buy American-made even if it cost 10 percent more. Indeed, even 60 percent of Chinese consumers would prefer to purchase American-made over Chinese production, even if it costs more.

[CLICK HERE to read the article, “Made in America?” from Consumer Reports, Feb. 2013.]

Between bipartisan politics, racial issues and economic divides, it’s easy to sustain an attitude of disgust and aggravation with the good old U.S. of A. But what we lack in pride over the day-to-day mishaps, we must recognize in privilege — to live and work here. America by nature instills the belief of opportunity and certain unalienable rights, including life, liberty and the pursuit of happiness. These are all good sentiments to reflect on as we embark on a new year.

Please contact us if you would like to discuss your financial future.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products.

The information
contained in this material is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. It is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the U.S. government or any governmental agency.

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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City Burbs

The housing market continues to experience mixed results, depending on the area of the country and demographics. For example, while the homeownership rate for seniors is 80 percent, about 40 percent of those over 65 were still making house payments in 2010, according to a 2014 report from the joint center for housing. While many seniors prefer to stay in their own homes, those that are moving tend to seek out homes located near urban centers. Recent trends lean toward walkable city areas with a multigenerational population rather than retirement communities.

However, as the job market improves, real estate insiders believe more young adults will enter the first-time homebuyers market. For 2015, some of the hottest projected residential markets include Atlanta, Dallas, Houston, Los Angeles, Minneapolis and Des Moines, Iowa. The latter two boast large populations of millennials attracted by job growth and affordability.

[CLICK HERE to read the article, “Older Americans a Pillar of Housing Market with High Ownership Rate,” from Bloomberg, Dec. 8, 2014.]

[CLICK HERE to read the article, “10 Hottest Housing Markets for 2015,” from CNN Money, Dec. 7, 2014.]

[CLICK HERE to read the article, “Top Metro Areas Poised for Uptick in Baby Boomer Home-sales,” from the National Association of Realtors, Dec. 10, 2014.]

Urban centers are on the rise. The Brookings Institution reports that urban counties are growing more quickly than a decade ago, while suburban growth has slowed. The housing market in suburbs has suffered most notably due to the tightening of mortgage lending standards and fewer jobs. Young adults are staying in larger cities longer because they boast better job opportunities, and they cannot yet afford to buy a home — a situation that should rectify itself as the economy improves.

[CLICK HERE to read the essay, “A Planet of Suburbs,” from The Economist, December 2014.]

One problem with city dwelling is finding a safe place to live at an affordable price. In New York City, some developers are taking a sustainable green approach by repurposing stackable shipping container as living quarters. The steel containers take up a smaller carbon footprint and offer an affordable option that can be located in basically any area that gets approved. The idea stems from an effort to create structurally sound, temporary dwellings for displaced victims after Hurricane Sandy a few years ago. Since many New Yorkers are used to living in small quarters, the idea is to retrofit the cargo containers into apartments and join them together to create a high rise or village. One couple purchased six shipping containers and designed a 1,600-square-foot, energy-efficient home connected by an interior staircase.

[CLICK HERE to read the article, “NYC Developers Team up to Boost Shipping Container Housing and Retail in the City,” from Inhabitat.com, Dec. 12, 2014.]

[CLICK HERE to read the article, “NYC is Preparing Shipping Container Homes for Future Hurricanes and Disasters,” from Inhabitat.com, Nov. 23, 2012.]

[CLICK HERE to read the article, “Brooklyn Couple Moves into Stacked Shipping Container Home in Williamsburg,” from Inhabitat.com, March 4, 2013.]

Immigrants have had a significant impact on America’s housing market as well. Between 2012 and 2013, larger cities lost about 5.4 million inhabitants but gained 3.3 million migrants from other areas of the country. Many of them were foreign immigrants, attributed with saving some cities from “outright depopulation.”

While some immigrants look to legislative permission to live in the U.S., others simply buy their way in. In the last fiscal year, 10,928 foreign families applied for a little-known federal visa program known as EB-5. This program allows foreigners who invest at least $500,000 in U.S. projects to become eligible for a temporary visa. If the project is found to have produced the pledged 10 jobs per investor, the investors and their immediate families become eligible for green cards. More than 80 percent of applicants typically receive approval, and their numbers are increasing. In the previous fiscal year, 6,346 foreign investors applied — a significant increase over only 486 in 2006 — according to U.S. Citizenship and Immigration Services, the program’s administrator.

[CLICK HERE to read the article, “Hot Source of Property Financing: Visa Seekers,” from The Wall Street Journal, Dec. 9, 2014.]

Obviously, home ownership is part of the American dream and not to be taken for granted. Remember too that homes are an asset and, for many, a significant portion of their net worth. If we can help you leverage your assets to help you feel more confident in your financial future, please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.

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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Low Oil Prices: Who Wins, Who Loses?

The national average price for a gallon of gas is less than $3, with further decreases expected. But that’s nothing new. Bear in mind that oil is a commodity, so its price varies according to cycles of supply and demand. For example, in 1986 and 1998, oil dropped below $10 a barrel. In 2008, prices made a dramatic drop from $145 a barrel in July to $33 by mid-December. In early December 2014, oil was about $66 a barrel.

For folks looking for extra cash during this holiday season, lower gas prices are a welcome relief. One of the positives that accompanies low oil prices is an increase in consumer discretionary funds, which in turn leads to spending and can stimulate economic growth. The phenomenon also presents substantial savings for companies that rely on gas for transportation needs, such as national retailers, trucking and airline industries. Excess revenues can be redeployed for other needs, such as more jobs.

One of the drivers of increased oil production, and therefore lower prices, is the innovation of fracking. Its prevalence in the U.S. has led to less dependence on the global oil industry. Countries that are large oil importers, such as China and India, enjoy greater savings as a result of paying lower prices.

[CLICK HERE to read the article, “Slide in Oil Prices Is Blessing for Most,” from The New York Times, Dec. 5, 2014.]

[CLICK HERE to read the article, “Don’t Fear an Oil Bust,” from Slate, Dec. 5, 2014.]

However, lower oil prices don’t benefit everyone. Take the state of Louisiana, for example, which charges a 12.5 percent severance tax to producers. The state’s 2015 budget relies on revenues based on a price of $96.70 per barrel, so if crude oil averages $81 a barrel in 2015, the difference could cause the state to lose approximately $133 million in revenue. Alaska is experiencing a similar situation.

[CLICK HERE to read the article, “How Much Will $60 Oil Hurt Louisiana?” from 24/7 Wall St., Dec. 5, 2014.]

[CLICK HERE to read the article, “What Really Happens When You Cut Taxes on Oil Companies,” from ThinkProgress, Dec. 8, 2014.]

By the same token, countries that rely on oil exports receive a crushing blow in revenues when oil prices drop. Moreover, the oversupply in oil production signals that the global economy isn’t growing fast enough to generate enough consumption demand.

[CLICK HERE to read the article, “For World’s Oil Exporters, Falling Prices Have a Domino Effect,” from NPR, Dec. 5, 2014.]

[CLICK HERE to read the article, “The Dark Side to Falling Oil Prices,” from Guggenheim Partners, Dec. 4, 2014.]

While there are often pitfalls to positive events, it’s important to remember that there can also be a silver lining associated with a negative event. One of the lessons we learn is to take advantage of opportunities as they present themselves. In other words, if you find yourself with a windfall of positive cash flow — due to lower gas prices or otherwise — let us help you choose a financial vehicle in which you can allocate those funds to help boost your income during any undesirable events. As always, please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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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Retiree Ingenuity

For many, the mind stays sharp as long as it continues to be challenged, and the trend of retirees working and living longer proves just that.

Take Hugh Lyman, for example. When he retired, this small business owner pursued a long-standing passion as an inventor. Fascinated with the possibilities of using 3-D printer technology, he felt the expense of the plastic filament used was too high. So he developed his own version using lower-cost plastic pellets, cutting the cost of the material from $40-50 a kilo to $5. Apparently the cost of the original material was inflated due to a patent, so he invented his own workaround. Sometimes it takes a good bit of work experience to understand that there are alternate ways of achieving the same goal.

[CLICK HERE to read the article, “How an 83-Year-Old Inventor Beat the High Cost of 3D Printing,” from Time, March 4, 2013.]

However, not all retirees can afford to quit work and pursue their passion. One recent study asserted that the decline of company retirement benefits is a primary factor keeping older employees working longer than ever.

[CLICK HERE to read the article, “Older Workers Clog the Employment Pipeline,” from MarketWatch, Sept. 30, 2014.]

At age 70½, individuals can no longer make traditional IRA contributions, but they may continue Roth IRA contributions as long as they are earning income from a source other than a pension, annuity or required minimum distribution (RMD). If they work past age 70 for an employer with a 401(k) plan, they may continue contributing to the 401(k) as well and avoid required minimum distributions.

[CLICK HERE to read the article, “An Exception to the RMD Rule,” from Getting Your Financial Ducks in a Row, Nov. 28, 2014.]

Then again, for many retirees the question isn’t whether to work longer, but how they can preserve money once they’re out of the workforce. Many affluent professionals who made their fortune in New York are now fleeing the state in order to enjoy the fruits of their wealth — in part, to avoid paying more of it out to high taxes in the state. While the majority of retiring New Yorkers are migrating to Florida, a state with no taxes on retirement income, a smaller portion are sticking close by in New Jersey.

[CLICK HERE to read the article, “Baby Boomer Retirees Flee NY,” from Press Connects, Dec. 10, 2014.]

Still other retirees are joining and starting new virtual retirement villages. In an effort to live independently as long as possible, these organizations charge members an annual fee in exchange for access to resources and social connections that help them continue living in their own homes. As part of the growing social network economy, these entities are cropping up all over the country. There are presently 140 villages in 40 states, according to Village to Village Network, which helps manage these villages. Instead of seniors moving into one specific community, they may live in their own houses yet tap resources that their peers use, such as lawn care, dog walkers and even shared social activities. The organizations use social media sites such as Facebook, Twitter and YouTube to stay in touch with members.

[CLICK HERE to read the article, “Retirees Turn to Virtual Villages for Mutual Support,” from The New York Times, Nov. 28, 2014.]

It appears we are headed for a nation largely populated with seniors who, either working or living in retirement, seek potential solutions for their financial, leisure and social challenges. Please consider us as part of your network now and in the future.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not permitted to offer, and no statement contained herein shall constitute, tax, legal or accounting advice. Be sure to speak with qualified professionals before making any decisions about your personal situation. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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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Is Your Retirement Just a Number?

Throughout our lives, we are identified by numbers. Social Security number. Employee ID number. Driver’s license number. The amount of money that you make. The number of children and grandchildren that you have. The value of your home.

Fortunately, those numbers are simply points of reference; they don’t truly define who we are. Our personal accomplishments do this. Our career. Our family. The way we respond in stressful situations. The way we treat people on a daily basis.

But as we near and enter retirement, we are once again focused on a number: How much money might each of us need saved to live the retirement lifestyle we desire? If you watch the ads on television, you may get the impression that there’s one magical number out there for all of us that can make all of our retirement dreams come true, but that is not the case.

[CLICK HERE to read the article, “Finding Your ‘Magic Number’ for Retirement Savings,” from CNBC, Aug. 27, 2014.]

[CLICK HERE to read the article, “IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401(k) Plans in 2015,” from the IRS, Oct. 23, 2014.]

One of the nice things about getting older is the wisdom that accompanies age. If you are in or approaching retirement, you’ve most likely learned by now that there’s no one thing that defines you and your happiness. Our lives, our challenges and our accomplishments are complex.

So is our income. Throughout a professional career, income levels vary. For some, there’s an upward slope. For others, there are peaks and valleys. It’s good to consider your retirement income in much the same manner. That’s because your expenses can fluctuate from year-to-year, despite your best attempts at planning and budgeting for both expected and unexpected costs during retirement. Early in retirement, you may spend more money traveling; later on, you may spend more on medical bills and long-term care. You may pay for a wedding one year, and then help a grandchild with college tuition somewhere down the road. If you live a long time in retirement, inflation may affect your expenses.

[CLICK HERE to read the article, “The New Retirement Income Benchmark,” from BlackRock, Oct. 22, 2014.]

[CLICK HERE to read the article, “Primer: Home Equity → Retiree Income,” from Squared Away Blog, Oct. 2, 2014.]

That’s why it’s good to have steady income sources, to help ensure you always have money to pay the bills. It’s also beneficial to have a variety of income sources, so you have extra money now and then to splurge on things that make you happy, like weekly golf outings and taking a vacation with the grandkids. Finally, it’s good to have money set aside that can accumulate during your retirement years, to be there when you need it for an emergency and to help ensure that you never run out.

[CLICK HERE to read the article, “Finke: What Makes a Successful Retirement?” from ThinkAdvisor, Jan. 27, 2014.]

[CLICK HERE to read the article, “Retirement: A Good State of Mind,” from Center for Retirement Research at Boston College’s Squared Away Blog, Sept. 23, 2014.]

As you create a strategy for your financial future, consider those all-important numbers when planning for retirement income. Still, it’s not how much we have that defines us. It’s how we spend our money that embodies and reflects our priorities and values. As we get older, those are the things that help define who we are.

If we can help you establish a retirement income plan with checks and balances and factors that can allow for fluctuating needs throughout your retirement, please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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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Mortgages and Real Estate

Real estate appears to be rebounding slowly but surely. There’s even a push from government regulators to lower the down payment requirements for new mortgages. New analysis shows few borrowers are granted 3 percent to 5 percent down payment loans on their homes, and those that do have excellent credit. The percentage of people receiving that low rate peaked at 3.4 percent in 1999. It remains to be seen if lenders will be amenable to lowering their down payment requirements.

[CLICK HERE to read the article, “Why Offering 3 Percent Down Payment Mortgages Is Not a Return to Lax Lending,” from The Washington Post, Nov. 6, 2014.]

According to research by HelloWallet, about 69 percent of Americans currently own a home, and 29 percent do not own but want to. However, home ownership does not always offer the same financial and tax benefits to everyone equally. Approximately half of today’s homeowners could potentially build more wealth by renting and contributing any extra money to properly structured 401(k)s, IRAs or other types of tax-free or tax-deferred retirement income accounts.

In fact, for lower-income households, the tax deductions associated with home ownership do not amount to much more than the standard federal tax deduction — $6,200 for single people and $12,400 for couples who file taxes jointly. A family earning $50,000 a year could generate 50 percent more wealth over the next decade by contributing to their retirement income accounts rather than their homes. Of course, this assumes that all savings that come from not owning a home (which may include anything from property taxes to home repairs) are allocated to a retirement income strategy and not spent on discretionary items. It’s tough for renters to know how much discretionary income they have now that they may not have if they owned a home, as well as what strategies they may be able to utilize in order to help increase their retirement assets.

[CLICK HERE to read the view the infographic and download the research paper, “House of Cards: The Misunderstood Consumer Finance of Homeownership,” from HelloWallet, November 2014.]

[CLICK HERE to read the article, “Why You’re Often Better Off Saving for Retirement than Buying a Home,” from The Washington Post, Nov. 11, 2014.]

While the inventory of existing homes on the market remains low, competition for those sales comes from two different directions. First, millennials have benefitted greatly by an improving economy and have achieved 60 percent better job growth than the U.S. overall this year. They represented 37 percent of home shoppers this summer; a number that is expected to rise as the economy improves. The millennial generation’s main competition for homes is the baby boomer generation, many of whom are downsizing and have substantial buying power. These two competing demographics are responsible for the growing demand for smaller, less expensive homes.

[CLICK HERE to read the article, “Changing Demographics Impacting Housing Market, Say Realtors,” from National Association of Realtors, Nov. 9, 2014.]

[CLICK HERE to view the interactive infographic, “Qualifying Income for Metropolitan Areas” from National Association of Realtors, accessed Nov. 9, 2014.]

[CLICK HERE to view the presentation, “Residential Real Estate Trends and Outlook,” from National Association of Realtors, Nov. 7, 2014.]

There are many different ways you can accumulate wealth to help you feel more confident in your financial future. If we can help you explore options that may be appropriate for your situation, please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not permitted to offer, and no statement contained herein shall constitute, tax, legal or accounting advice. Be sure to speak with qualified professionals before making any decisions about your personal situation. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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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How Year-End Politics May Affect You

The changing of the guard in Congress has begun: out with the old, in with the new. As the GOP prepares to take a majority presence in both the House and Senate, one question looms: Are we in for even more gridlock moving forward?

It appears that much is on tap for the lame-duck session of Congress — the final year-end push to tap votes of exiting congressmen. The first priority will be passing a government funding bill, which can hopefully be resolved without shutting down the government. The most likely scenario is that Republicans will push for another short-term, stopgap resolution until after the New Year, when they can dominate the discussion.

Democrats would like to use the lame-duck session to revive expired tax breaks before year end and approve a backlog of presidential nominations.

[CLICK HERE to read the article, “Lame-Duck Agenda Under Spotlight at White House Luncheon,” from MSNBC, Nov. 7, 2014.]

[CLICK HERE to read the article, “Senate Gears Up for Packed Lame Duck Session,” from Daily KOS, Nov, 7, 2014.]

Before we move forward, the country may have to take a couple of steps back. The GOP has vehemently reiterated that it plans to repeal Obamacare — or at least certain aspects of the health care law. Although voters on both sides of the political fence have indicated they are more interested in legislation impacting jobs and the economy, the successful passage of the most comprehensive national health care reform on the books is an Obama legacy that Republicans would like to rewind before history is written.

The battle over passing the Keystone XL pipeline may prove less onerous and on-task with voter desires. The Canada-to-Texas pipeline is projected to produce 830,000 barrels of oil a day, yielding lower domestic energy costs and a new source of American jobs. While the jury is still out on the long-term environmental impact, President Obama has indicated he would sign off if it is proven the project will not substantially exacerbate the climate problem.

[CLICK HERE to read the article, “Advocates Press Obama on Public Health,” from The Hill, Nov. 7, 2014.]

[CLICK HERE to read the article, “GOP Vows to Build Keystone, Repeal Obamacare” from MSNBC, Nov. 6, 2014.]

Other reasonably passable measures include trade agreements, tax extenders and tax reform — at least where corporate taxes are concerned.

[CLICK HERE to read the article, “GOP in Charge of the Senate, Eager to Move on Keystone XL, Taxes” from PBS, Nov. 6, 2014.]

[CLICK HERE to read the article, “Tax Extenders on Tap for Lame-Duck Congress, Tax Reform Likely to Get Attention in 2015,” from CCH Group, Nov. 7, 2014.]

However, President Obama has indicated that, in lieu of a bipartisan immigration agreement, he plans to move forward with an executive order to reduce the number of deportations and grant work permits to millions of illegal immigrants in the U.S. Such an action is likely to inflame Republicans, which does not bode well for a bipartisan start to the New Year.

[CLICK HERE to read the article, “Executive Actions on Immigration,” at the Department of Homeland Security, Nov. 24, 2014.]

Taxes, jobs, health care and economic growth: These hotly contested issues are more than just political ballyhoo. All relevant legislation that the upcoming 114th Congress passes has the potential to significantly impact our household finances in years to come. Please contact us if you would like to discuss retirement income strategies that can help address concerns you may have regarding any changes the future may hold.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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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