Do You Need Long-Term Care Insurance?
The cost of a one-year stay in a nursing home varies widely across the country. According to insurer Genworth the cost of a single room in a nursing home averages $87,000 per year with costs running as high as $136,000 per year in New York and $240,000 in Alaska (2015). In-home care can cost $50,000 per year or more.
Here are some factors to consider in deciding whether to buy long-term care insurance.
- The cost of long-term care or in-home care in your area.
- Your net worth. There are no hard and fast rules here. One rule of thumb says that those with more than $2 million should consider self-insuring, while those with a net worth under $500,000 will likely be covered by assistance programs such as Medicaid.
- Do you want to leave an inheritance? If so long-term care insurance can be a tool to help you preserve your estate for your heirs.
- Your spouse’s financial security. Often caring for an ailing spouse can drive the caregiving spouse to financial ruin. Long-term care insurance can help avoid this.
Do you need long-term care insurance? Everyone’s situation is different and we can help you evaluate whether or not long-term care insurance is a good solution for you based on your assets and need for asset protection. The discussion between us of long term care protection is part of the financial planning process.
Preventing Identity Theft
Seemingly every day there is a story making the news about a major retailer or governmental agency being hacked, placing the identities of many people in danger of being stolen. Identity theft is a serious problem with serious ramifications for victims. While there is no way to totally prevent identity theft, here are a few steps you can take to prevent it or at least minimize your risk:
- Don’t freely give out your Social Security number, carry your social security card, birth certificate or passport around with you.
- Make a copy of your credit cards and your driver’s license, and put the data in a safe place, to ensure you have this information if needed.
- Take the extra copies of the receipt from a credit card transaction with you and shred the extra copies.
- Teach your children never to give out their email address, passwords, or any other personal information.
- Keep the virus and anti-spyware program on your computer up to date.
- Check bank and credit card accounts regularly for unexplained transactions.
- Use your bank’s account app and set it to alert you each time a transaction is made.
- Create complicated passwords for your online accounts.
Many identity theft protection programs may not be all they are cracked-up to be so you need to be careful in deciding whether or not to purchase one of them. Our increased use of the internet for just about everything puts us at risk for cybercrime and identity theft. Caution and common sense are key to protecting yourself and your family.
How Much Company Stock is Too Much?
The flip side of this is Enron, a high flying company until it went bankrupt after a scandal surrounding the company was revealed in October of 2001. The stock was widely-held by company employees, including in their retirement plan accounts. Needless to say the demise of the company caused many of these employees to suffer steep financial losses.
There is no hard and fast rule regarding the amount of employer stock to own. However, many financial experts suggest keeping the amount to 10% of your portfolio or less.
The issue with holding too much employer stock is that if the company has financial problems you may find yourself out of a job. In addition, if you hold large amounts of company stock you may find that the stock price will suffer a steep decline as well. If you hold the company stock in your retirement plan not only could find yourself unemployed, but you might also see vast portions of your retirement savings eroded as well.
It is never wise to be overly concentrated in any single holding, especially your employer’s stock. Investing in other companies stock inside of your 401K plan is another option that you may have. Please give us a call to review your portfolio and to help you understand risks surrounding ownership of your employer’s stock as well as provide other types of investment choices that will help you accumulate retirement savings.
3 Investment Mistakes Baby Boomers Should Avoid
It is important to save and invest for retirement over the course of your working career. This doesn’t stop for Baby Boomers approaching retirement or who are already retired. Here are 3 investing mistakes that Baby Boomers should avoid.
Mistake #1: Taking too little risk
It may be tempting to become very conservative with your investments as you approach retirement. While nobody is suggesting that you invest like a 25-year old, taking too little investment risk can set Baby Boomers up for failure in retirement, defined as running out of money. Inflation is still your greatest retirement threat and part of your portfolio should be invested to allow you to stay ahead of inflation.
Mistake #2: Letting fear drive your investing decisions
Looking back to the financial crisis of 2008, the news was filled with stories of many investors who sold out of the market at or near the bottom. Many of these tragic stories involved Baby Boomers. Not only did these investors book heavy realized losses, many missed out on some or all of the ensuing stock market rally seriously damaging their ability to retire as planned.
Mistake #3: Failing to plan your retirement withdrawal strategy
It is critical to develop a strategy for withdrawing money from your various accounts to meet your income needs during retirement. Failing to plan for these withdrawals and failing to adjust your investment strategy accordingly can have a negative impact on your quality of life during retirement.
Are you a Baby Boomer and unsure about whether your investment strategy is right for your situation? Contact our office to schedule a meeting to discuss your current situation and review your portfolio.