College Funding Strategy

June 28, 2015

College Funding


Accumulating Money for Retirement

December 5, 2013

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Before we continue on in the discussion about protecting the assets, I would like to discuss how to accumulate them. As we have discussed in the past, we need to be disciplined in accumulating money for retirement or any other reason. We need to set aside money for ourselves on a weekly basis so that we can have an income when we retire. Unfortunately, many of us never learned the importance of saving, nor did we learn how to be disciplined. Social security alone is not enough to retire, but it could be a nice supplement to our retirement account.

We have learned from the many economic crises and depressions that we have experienced in the United States that we need to be more disciplined about saving, and we need to make more sacrifices if we are going to be able to save money for retirement. Because of this lack of discipline, many of the Baby Boomers do not have a retirement plan. Consequently, some will need to work to support themselves during their retirement.

Even so, we should still try to save money in the event of an emergency. The first thing to do is to accumulate an emergency fund in a savings account, approximately $2000 or $3000, in case the car, refrigerator, or washing machine break down, or we have to take an unexpected trip somewhere. Charles Farrell in his book, Your Money Ratios – 8 Simple Tools for Financial Security at Every Stage of Life, has developed ratios to determine how much money to save on an ongoing basis for retirement. He recommends saving 12% of you salary per year and accumulating twelve times you annual salary as a retirement fund. After setting aside the emergency fund, we can begin to accumulate retirement money.

A close examination of the budget will reveal where we are spending money and whether or not we need to adjust the budget in order to save twelve percent. By keeping track of money spent and deciding what we can eliminate from our spending, we will find the twelve per cent to move into a retirement pan. We can begin a plan at work, or if self- employed, we will have to begin a plan on our own, through a bank, or an insurance company.

Once the plan is in place, we should purchase a life insurance plan to cover other expenses, such as estate taxes, and final expense benefits, so that the spouse will not have to use the pension plan proceeds to pay for these expenses.

In conclusion, accumulating money for retirement, and protecting the income with life insurance are wise decisions for those who desire to live comfortably during retirement.

 


What are Supplemental Benefits?

November 3, 2013

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Many questions have been raised about the new Health Care Reform and how the changes will affect each one of us. Some of the concerns are about prices for coverage and the amount of coverage that is going to be extended. Since thousands of people have never had health coverage, they will have to become knowledgeable about the health care services they will be receiving, and how they will be billed.

One of the issues consumer will face is the higher costs associated with the health care reform and how to adjust their budgets accordingly. In order to afford the health care premiums, most consumers will choose a plan with a high deductible. The deductible is the amount the consumer will have to pay, out of pocket, before the insurance company will pay for health services. Since Americans have not been able to save money over the years, very few will have an emergency account set aside to handle unexpected costs, such as deductibles. The average consumer has less than $4000.00 in their checking or savings account.

We have experienced an economic crisis and we still have not changed our spending and saving habits, five years later. That is the reason why many people will benefit from purchasing a low cost supplemental health insurance policy. This policy will pay the out of pocket costs that most health insurance policies will not cover.

For example, depending on the type of cancer, the average cost of cancer treatment can total over $500,000 and out of pocket cost could total $1000 per month, with co-payments for drugs as high as $20,000. Most people who have cancer may not be able to afford the out of pocket costs. Some have opted not to have the treatment, especially if death is inevitable. Some may seek natural or homeopathic remedies for cancer, if they are willing to do the research involved.

The solution to this is to purchase a health insurance supplemental program which would cover all or most of these out of pocket costs. A health insurance supplemental program would provide cash to cover losses as a result of catastrophic medical bills. The cash payments would allow the patient to continue pay for daily living expenses of food, clothing, utilities, and transportation, while they are receiving treatments.

This failure to plan for unexpected costs has led to financial ruin for many people, especially business owners, causing them to file for bankruptcy, and lose their homes and other assets. Business owners incur expenses for operating their businesses and must also earn money to run their households. When they are sick and need medical treatment for serious medical problems, it can strain the budget.

In conclusion, investing in health insurance supplemental insurance and a long term disability policy would be wise decisions which could help to lighten the burden of having to pay for out of pocket costs. This would include payments for other insurance which the patient is paying at the time of treatment, such as automobile insurance, life insurance, and disability insurance, which are necessary for the financial security of the families.