2011: A Year In Review

This week’s CBTV show is entitled, “2011 – A Year of Many Financial Ups and Downs!”

The end of the year is usually a time for reflection on what “happened” over the previous 12 months.  But in 2011, some of the top financial news stories have been on what “did NOT happen.”  One of the biggest stories was the U.S. long-term credit rating downgrade from AAA to AA+ by Standard & Poor’s on August 5th.  The downgrade sent the stock market in a tailspin, with the Dow Jones Industrial Average suffering its sixth-biggest, single day decline ever, of 635 points.  The S&P downgrade was a result of the federal government’s inability to make a decision on how to cut the federal deficit.  The debt ceiling was raised by Congress three days before the S&P downgrade was issued.  The failure of the Congressional “Super Committee” to trim at least $1.2 trillion dollars out of our budget over the next 10 years, has made 2011, the “Year of Inaction.”

When the “super committee” failed to fulfill their assignment, they essentially handed off the responsibility of slashing our country’s deficit back to Congress, and possibly a new president, in November of 2012.  The automatic spending cuts, totaling $1.2 trillion dollars, will not become effective until 2013, which means Congress has another full year to argue against them, or figure out an alternative solution.  As it stands now, these cuts must be divided equally between defense and select domestic programs.  Leaders of the U.S. Armed Forces have already fought against these measures, expressing deep concerns over cutting our military budget and strategic presence around the globe, as well as compromising our national security.

While the “Year of Inaction” is nearly over, we may very well be talking about the “Years of Inaction” at the end of 2012.  The indecision of our elected officials to change the financial course of our country this year, shows a lack of true leadership.  But there is a silver lining to this year’s indecision by Congress that helped some Americans in 2011.  The failure of the “super committee” faired well for retirees, who had feared cuts to Social Security and Medicare.  Some Americans also found ways to make the most of a bad situation by cashing in on timely investment opportunities such as gold.  Mortgage rates also fell below 4% for the first time in 30 years, and made it very tempting for many to buy a home.  Yes, 2011 was an interesting year, but it also furthered the U.S. on a financial path it cannot sustain.  While the forecast for 2012 looks like more of the same, take advantage of the good while you can, but also brace yourself for more rough waters ahead.

Again, I’d like to hear from you on this week’s show. How do you think our government officials are doing in making decisions to improve our financial future?

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

 -Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

The Perfect Gift For Yourself

This week’s CBTV show is entitled, “How to Choose the Perfect Gift for Yourself this Holiday Season- Financial Security in Retirement.”

In this week’s financial tip, tool, or technique portion of the show I said, if you’re lucky enough to have an employer who still offers a defined benefit plan, you have several payout options available to you, come retirement time. Here are the 4 basic payout options to consider when creating an income stream from your pension in retirement:

1) Single Life Payout: This option pays out the biggest benefit, and is calculated based on a single life – yours, which means it ends at your death.  No benefit is available for your surviving spouse, so this might be appropriate for a single retiree, or a couple who can cover the loss of income, if the spouse who is receiving the pension dies first.

2) Spousal Continuation Payout: Unlike the single life payout, these benefits continue on, if survived by a spouse. The downside, is the monthly benefit paid to the retired spouse is reduced vs. the single life payout. The upside, is the monthly payments are paid out for the life of the retiree and the surviving spouse, no matter how long each one lives. 

3) Lump-Sum Distribution Payout: Some plans give you the option to take your pension funds in a lump sum, that can then be “rolled over” into an Individual Retirement Account (IRA).  Taking the lump-sum distribution allows you to invest your money as you wish, and gives you many more options to choose from, which may give you even more income in retirement.

4) Pension Arbitrage Payout- If you’re married consider taking the higher “single life pension payout” and buying a life insurance policy on yourself. With this strategy, you will receive a higher monthly income during your lifetime, and your surviving spouse will receive a “lump sum” income tax-free benefit upon your death.

Knowing all your options before you structure your pension payout, can help you maximize your retirement income stream.  I also recommend you consult with a qualified professional before making any decisions on this important election of benefits. Because once you decide which option to choose, you can never go back and change it!

 I would like to hear from you this week on whether or not you have a Pension Plan distribution coming to you when you retire. Many employees do not have this valuable option available to them anymore. If you do, you’re one of the lucky ones.

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

 -Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

The Gift That Keeps On Giving

This week’s CBTV show is entitled, “This Holiday Season Give YOURSELF the Gift That Keeps on Giving – A Guaranteed Income Stream for Life.”

Retailers across the country cashed in on the most profitable Thanksgiving weekend ever last month, and they’re hopeful that December will produce strong fourth-quarter sales to carry them into the new year. Consumers spent a record $52.4 billion dollars over the “Black Friday” weekend, with an additional $1.25 billion generated in Internet sales on “Cyber Monday,” the heaviest online spending day in history.  A number of factors have contributed to these record sales, from stores opening earlier than ever before, to low sales prices being extended for longer periods of time.  While the country closes out another tough year, millions of Americans are giving the economy a boost, as they spend their way through the beginning of the holiday season.

While you’re spending money on great gifts for family and friends this holiday season, take a moment to think about yourself too.  The best gift you can give yourself is a gift that keeps on giving, such as an income for life!  This can be accomplished through saving for and then structuring your retirement assets to provide an income stream that will last throughout your retirement years.

Here are 4 financial challenges to be aware of as you create a master plan to live comfortably in retirement:

1) Inflation: Your income plan should figure inflation into the equation. Inflation has ranged between 3% and 4% for most of this year.  Costs will continue to go up for most goods and services, so make sure you plan for this expected rise in the cost of living when planning your income stream for retirement.

2) Life Expectancy: More Americans are reaching their 80’s, 90’s, and 100’s than ever before in history, which means our money must last longer too!  Therefore, you need to develop a plan that ensures your savings will go the distance.  For more and more people, that means working past the age of 65, so they can maintain an income to supplement Social Security and other retirement benefits.

3) Adequate Savings: An income plan should definitely include some form of retirement savings, whether it’s a 401(k), an IRA or an annuity.  The key is to put enough money away as soon as possible for the future, and not spend it on anything, but your retirement years!

4) Debt: You will never be able to truly enjoy retirement or even pre-retirement if you still owe money on anything you’ve purchased in the past. One of your goals should be to become debt-free as soon as possible. Stop being slave to the lender! Pay off all of your credit cards, home mortgage and car payments and watch your peace of mind, bank account and income increase!

Creating a solid income plan can keep your finances in good shape during retirement. So, as you shop `til you drop this holiday season, don’t forget to add “Your Name” to your list of gift recipients. This can truly be a gift that lasts a lifetime!

I would like to hear from you on this week’s important show topic. Have you given any thought to how you will create an income stream that will last as long as you do in retirement?

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

 -Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

The Tax Man Cometh!

This week’s CBTV show is entitled, “The Tax Man Cometh! But Don’t Pay a Penny More Than You Have to This Year.”

As we all know, our U.S. tax code changes every year, and this up-coming year will be no exception, as you will see from my opening headline to the show:

 The end of the year is quickly approaching, and with it comes the expiration of a few key tax breaks that were put into effect by the “Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.” Congress must now vote on whether or not they want to extend these benefits for 2012.  But, with the Congressional “super committee” failing to come to an agreement on a deficit reduction plan before the November 23rd deadline, no one knows what to expect from Congress in 2012. With the failure of the bipartisan Joint Select Committee on Deficit Reduction to cut out anything from our national budget, will Congress be able to come to an agreement on these “temporary” tax breaks? Only time will tell…

Nearly one year ago, payroll tax cuts were put in place by Congress in an effort to stimulate the economy.  Payroll taxes fund Social Security, and were cut 2%, from 6.2% to 4.2% for employees, as part of the 2010 Tax Relief Act. According to the Center on Budget and Policy Priorities, the payroll tax cut gives about $934 per year to the average worker, but is set to expire at the end of this year.  President Obama proposed extending and expanding this cut in 2012 as part of the American jobs act in September, which called for the tax rate to drop even further to 3.1%, for both employees and employers.

Extending the payroll tax cut in its current form through 2012, is expected to cost the government $120 billion dollars, and combined with the extension of emergency unemployment insurance, that number rises to $200 billion.  Increasing our country’s “spending” is obviously not what Congress should be focused on right now, especially when the goal of the “super committee” was to agree upon $1.2 trillion dollars in spending cuts and possible tax increases.  At the same time however, the backlash that could occur from raising payroll taxes or eliminating long-term unemployment benefits, could be substantial.

The “super committee” was formed as a result of the Budget Control Act of 2011, which raised the debt ceiling $400 billion dollars on August 2nd.  Unfortunately, the federal deficit passed the $15 trillion dollar mark last month, and the new debt ceiling of $15.2 trillion is expected to be hit sometime in January.  Debt continues to pile up, due to ongoing spending, and it looks like next year will be more of the same. In 2012, most Americans will likely have the same benefits they had in 2011, which means that retirees will not see cuts to programs like Social Security or Medicaid.  If there is a silver lining in the failure of the “super committee,” it’s that people will probably not have to worry about tax increases or benefit cuts until this time next year, when we’ll most likely, go through it all over again!

Again, I would like to hear your comments on this week’s show. Are you happy with your current federal tax rate you’re paying? Do you think the reduced payroll tax is helping you financially? And what taxes do you think should increase to pay down the national debt?

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

 -Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

Financial Blunders of the Rich & Famous!

This week’s CBTV show is entitled, “Financial Blunders of the Rich and Famous.”

Everyone likes to hear how the rich and famous messed up their lives (that’s why the tabloids sell so many newspapers), but there is a real lesson to be learned with this one.

Christmas Day is now less than a month away, and this year will mark the fifth anniversary of the passing of the man known as the “Godfather of Soul,” James Brown.  Unfortunately, the legal team of the former, “hardest-working man in show business” continues to work hard themselves, as they attempt to fulfill his dying wishes, with the extremely poor estate planning documents he had in place prior to his death.  Nearly five years later, a final resolution of his estate is yet to be determined in probate court, mostly due to a controversial 4^th marriage, and an appeal of a 2009 settlement filed by two of Brown’s former trustees.  The appeal is currently waiting on the South Carolina Supreme Court, while his remains also wait for a final resting place.

James Brown died on December 25, 2006, and shortly thereafter his heirs started fighting over his assets.  The original value of Brown’s estate was estimated to be worth $100 million dollars, and he wanted all of the money to go into a “special trust” to provide college scholarships for underprivileged children.  However, none of those children have seen a penny so far, because he didn’t update his will or trust during a questionable marriage to his last wife, Tomi Rae Hynie. 

While Brown’s case is certainly one of the worst, in terms of what can happen due to a lack of proper estate planning, he is definitely not the only celebrity to make the same mistake.  Last year, the children of former St. Louis Rams owner, Georgia Frontiere, who died in January of 2008, were forced to sell their 60% stake in the team, to pay for the huge estate tax bill that was due. Nearly a decade earlier, the family of former Miami Dolphins founder, Joe Robbie, was faced with a similar problem when he passed away in 1990.  The Dolphins were sold to minority owner, Wayne Huizenga in 1993, so they could pay a reported $47 million dollars in estate taxes.

And now for some good news:

Steve Jobs was one of the co-founders of Apple, and went on to become one of the richest men in the world. Forbes estimated his wealth at $7 billion dollars shortly after his death on October 5th of pancreatic cancer. However, his legacy will live on through proper estate planning and the trusts he established.  Jobs placed at least three properties into trusts in 2009, according to Reuters, which helped his family to minimize estate taxes and keep these assets from being publicly disclosed in probate court.

A Living Trust is an important estate planning document to consider. So, here are the 4 main benefits of a Living Trust:

1) Protection: There are certain cases when beneficiaries are simply too young or immature, to handle the financial responsibilities associated with property or money that will be passed down to them.  A living trust allows you to dictate when and how much of their share of the estate will be given to them.

2) Management: If for some reason you become seriously ill or incapacitated and can no longer manage your financial assets or property, a living trust will allow your successor trustee to take over in your place.  There is no court supervision, and the management of your financial affairs continues without interruption.  However, this can only be done as long as those assets are in the name of your trust.

3) Savings: Beneficiaries of a living trust may also be able to minimize the estate taxes due with a living trust, but there are also additional savings.  For example, you can avoid many of the legal fees associated with probating a will, and the time it takes to administer your estate can also be reduced.

4) Privacy: Probate is a public process that reveals all of the contents of your will, as well as who your beneficiaries are, and how much money or assets they will inherit.  A living trust is a private document that does not get filed with the probate court, and does not allow anyone to view it, unless the grantor or trustee gives them permission.

A living trust is a valuable component of a comprehensive estate plan.  No one has a “contact with life,” so to avoid the same financial blunders of the rich and famous, take action now to insure your wishes become a reality! 

Again, I would like to hear from you about this topic. Do you think that celebrities think they can take care of important financial matters in the future so they procrastinate like the rest of us? Or do you think they believe everything is already taken care of, as is?

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

 -Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

Give Thanks

This week’s CBTV show is entitled, “Give Thanks – By Fully Insuring Your Health for the Long-Term”

Of course, we’re talking about Long-Term care coverage this month. Here are some interesting parts of the show.

The Community Living Assistance Services and Supports Act, also known as the Class Act, was the vision of the late Massachusetts Senator, Edward “Ted” Kennedy.  The Class Act was designed to create a voluntary, government-run plan for long-term care insurance.  It would have allowed Americans to buy long-term care insurance through payroll deduction, and receive cash payments if they were later disabled, regardless of their age or a pre-existing health condition.  The Department of Health and Human Services had planned to implement the provisions of the program, including offering this coverage on a guaranteed-issue basis.  However, Health and Human Services Secretary Kathleen Sebelius announced on October 14^th, that the Obama Administration would not be able to implement the Class Act, because it was not financially feasible under current economic conditions.

November is National Long-Term Care Awareness Month, which serves as an annual reminder of how important this type of insurance is for all Americans.  Unfortunately, many people mistakenly believe that their employers health insurance plan or Medicare, if they’re retired, will cover these expenses. Not true! Medicare Part A does cover UP to 100 days of care in a skilled nursing facility, but beyond that, it’s at your expense!  Americans who reach age 65 have a 40% chance of entering a nursing home, and a 10% chance of remaining there for five years or more, according to the Department of Health and Human Services.  That means there’s a good chance that you, or one of your family members will require some form of long-term care in the future. 

The rising costs associated with health care and long-term care, is a growing problem in this country, and becoming more difficult for most Americans to afford.  The median room rate for a private nursing home rose 29% between 2005 and 2011, from $60,225 to $77,745 per year, according to the “Genworth 2011 Cost of Care Survey.”  Genworth has conducted this survey for 8 years, with the help of over 15,000 long-term care providers nationwide.  In addition to the high cost of long term care, Genworth also found that the average national median cost of licensed home health care services, which provide “hands-on” personal care, including bathing and dressing, is now $19 per hour.

Long-term care insurance is an important benefit you simply can’t afford to be without today. The odds are very high that you, or a family member, will require some type of long-term care in the future.

So, here are 4 important steps to take when planning how you will cover these long-term care expenses:

1) Educate yourself on long-term care coverage: There are a number of different ways to cover the cost of LTC today. Of course, there is the traditional LTC insurance policy, which requires an annual premium payment to keep the policy in force. But there are now hybrid LTC riders that may be attached to a life insurance policy or annuity policy. Each of these options are worth looking into.

2) Find out the cost of care in your state: Websites such as longtermcare.gov and genworth.com have interactive maps, that allow you to find out how much long-term care services cost in your state.  They will give you an idea of the costs for in-home care, assisted living, adult day care and nursing home care.

3) Calculate how much you need to save: There are online calculators available today that can tell you how much money you need to have for long-term care based on your age, where you plan to retire, the amount you plan to set aside, and the annual rate of return you expect to receive on your monthly savings.

4) Research facilities near your home: After shopping around for the best long-term care coverage you can find, get out and visit the nursing homes and assisted living facilities in your area, to find out what services they have to offer.  Also, get to know the staff and be sure you “feel the love.” You want to see and feel that they truly care for the residence who live there.

Planning ahead for long-term care is the only way to prepare yourself and family for unforeseen health concerns.  And to be truly prepared, you should work with a qualified long-term care specialist. Find a financial advisor who specializes in LTC coverage. You’ll be amazed at all of the options available today. Some of which don’t require you to pay an annual premium for a traditional LTC policy. So, find a specialist to work with!

Again, I would like to hear from you on this important benefit that each of us needs. Do you have a LTC insurance or coverage in place today? If not, how will you pay for it down the road? Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

Extreme Financial Planning

This week’s CBTV show is entitled, “Extreme Financial Planning: What Some People Are Doing to Keep the Money Rolling In!”

No matter where you live throughout the U.S., there has likely been a story in your local news about somebody who tried to get away with a crime – sometimes even murder – in an effort to make money.  One case that made national headlines recently, involved a woman from South Carolina named Susan Diane Hendricks, who was charged with killing four family members on October 14th.  Pickens County Sheriff, David Stone, called the quadruple murder a “horrendous act of evil,” and the reason given for Hendricks committing the crime, was to collect the life insurance money.  In another case, closed earlier this year, it was discovered that an 86-year-old man from Florida, Allan Dunn, had kept his wife’s dead body in a freezer for over 10 years. His reason?  To continue collecting her Social Security benefits.  Dunn told neighbors that since 2000, his wife Margaret was living in a nursing home.  Friends of the family eventually found Margaret’s body in a freezer on the back porch, after they had gone to the condo to get Allan’s final affairs, following his suicide.

According to the National Insurance Crime Bureau (NICB), “questionable claims” are pulled for closer review and investigation, based on one of more indicators of possible fraud.  For example, common indicators for vehicle fraud, include faked damage, questionable vehicle theft and suspicious fires or arson.  The Bureau released its “questionable claims referral reason analysis” for the first half of 2011 in August, which examined six different insurance categories, including property, casualty, commercial, workers’ compensation, vehicle and miscellaneous.  The number of “questionable claims” in these six categories rose 18%, between the first half of 2009 and 2011. Jim Quiggle, the Director of “Communications for the Coalition Against Insurance Fraud,” said the poor state of the economy has had a direct impact on the increase in questionable claims. Quiggle said the average fraudster makes small-time claims, such as supposedly losing an engagement ring and reporting the loss, even though it’s later found at a pawnshop.

There are two ways to look at the rising numbers for questionable claims.  First, it would seem that more people are turning to crime as a way to help themselves out financially.  But, the second part of this equation, involves insurance companies that are investigating more of these cases, to make sure these criminals are caught and brought to justice.  Such is the case of 72-year-old, Jonella Howard, who was looking for $300,000 in compensation, following a slip-and-fall accident in a Florida supermarket.  However, store video showed Howard moving her foot back and forth on the floor, where the liquid appeared to be spilled.  She then fixed her hair and sat down on the floor, and then called for help, after her supposed “fall.”  Howard now faces up to 35 years in prison if convicted. 

Unlike most “white collar” crimes involving financial fraud, which are committed by seasoned professionals, those guilty of “insurance fraud” tend to be average people that have become desperate to make a buck.  But, to be so desperate as to freeze a loved one’s body, or even kill someone, is well beyond “extreme” financial planning.  It’s been said that money is the root of all evil, and in these crazy cases that certainly appears to be true!  Organizations like the “Coalition Against Insurance Fraud” and the “National Insurance Crime Bureau” were formed to protect businesses and consumers from criminals who commit these heinous acts, which can also lead to a rise in your insurance premiums.

I would like to hear from you on this important topic. Have you witnessed anyone engaging in a fraudulent activity for financial gain? Were you shocked and surprised that they would consider attempting such a deceptive move? Did they get caught or is it still continuing on?

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

 -Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

Victory for Our Veterans!

This week’s CBTV show is entitled, “A Victory for Our Veterans! Good News for Those Who Served Us Well.”

“Home for the holidays” will likely never mean as much to our military men and women, as it will when the remaining 40,000 troops stationed in Iraq, finally return home.  President Obama made the announcement on October 21^st that the final withdrawal of all troops would take place before the end of the year, putting an official end to “Operation Iraqi Freedom,” which was launched in response to the September 11th terrorist attacks on our country. More than $800 billion dollars has been spent on the Iraq War since 2001, with nearly 4,500 service men and women killed, and more than 30,000 injured.  This Veterans Day, lets honor not only these troops, but all who served our country well, and give them the recognition and benefits they rightfully deserve. 

The withdrawal of our U.S. troops from Iraq has been a gradual process, and many of them are still transitioning to their lives back home.  Fortunately, the federal government has put several benefits in place to help aid in this transition, ranging from free health care, dental coverage and family support, to education and employment services.  The U.S. Department of Veterans Affairs offers combat veterans who fought in Afghanistan and Iraq, five years of cost-free health care after the date of their discharge or release.  Veterans can also receive free outreach services, such as counseling, while readjusting to civilian life, at any local vet center.  Other benefits include the Post-9/11 GI Bill, that provides troops who have at least 90 days of service on or after September 11, 2001, with financial support for education and housing. 

There are not enough ways we can thank our troops for the sacrifice they have made for our country, and they certainly deserve more than just government benefits.  They deserve our everlasting support and should be welcomed with open arms when they return home.  While government programs are in place to aid our veterans in their transition back to civilian life, they can always use more help to support these initiatives, so consider volunteering your time or donating to their causes.  Veterans Day is an annual federal holiday that was put in place to remember those who have served our country.  It falls on November 11^th, which is the anniversary of the date World War I ended, in 1918.  This year, American families who still have loved ones serving in Iraq will be celebrating the end of “Operation Iraqi Freedom.”  On this Veterans Day, take the time to appreciate those who have served us, and pay them the respect they’ve earned, for defending our freedom.

I would like to hear from you on this week’s important topic. Do you have a family member serving in our military?   What ways do you show your support of our young men and women in uniform? Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

-Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

Rock Solid Retirement

This week’s CBTV show is entitled, “Have You Created a Rock Solid Retirement Plan? If Not, Don’t Wait Another Day!”

For the first time in 3 years, 55 million Social Security recipients will see their monthly benefits increase.  Starting in January 2012, the Cost-of-Living Adjustment, or COLA, will return, with a 3.6% increase in Social Security benefits.  Low inflation prevented the COLA from increasing benefits over the past two years, which was the first time this happened since “inflation-tied increases” were enacted in 1975.  While the Cost-of-Living Adjustment is a much-needed raise for retirees receiving Social Security benefits, it’s estimated that approximately 75% of recipients won’t realize the full effect of this increase.  This is mainly due to an expected increase in Medicare Part B premiums, which are automatically deducted from these checks before the government mails them.  So, even though recipients will “technically” be getting more in benefits, most retirees will not “actually” see a significant increase.

Social Security is a major source of retirement income, if not the sole source for millions of retirees.  However, it’s important to remember that Social Security is a “benefit” and should be considered as just one component of a comprehensive retirement plan. The future of Social Security is uncertain. The program continues to run at a deficit, and without some major changes by Congress, trust fund reserves are expected to be exhausted by 2036.  But, that’s only part of what is becoming a growing problem.  Which is this - the 3.6% increase in Social Security benefits for 2012, isn’t even keeping up with the current annual CPI-W inflation rate of 4.4%, or the “main” CPI of 3.9%!  In fact, since the Cost-of-Living Adjustment was first introduced in 1975, the annual increase has been less than the annual rate of inflation more than half the time. 

As we all know, government benefits will not cover every expense you will have in retirement, which means you must create your own comprehensive financial plan, to make sure you cover all the expected and unexpected events in life. 

So, here are 4 key elements of a comprehensive retirement plan:

1)     Develop an Income Plan:  You must know how much money you will need to live comfortably in retirement, which is typically 70% of your pre-retirement salary.  From there, you need to know what financial resources will be available to you in retirement, and then how to withdraw those funds in the most tax-advantageous manner. You should also create a reliable income stream that will last throughout your retirement years, such as a lifetime income annuity.  

2)     Buy Long-Term Care Insurance: Nursing home facilities can cost more than $80,000 per year, and health insurance, Medicare or disability insurance will not cover this expense.  While long-term care insurance can be expensive, the cost of long-term care is much more expensive. The possibility of a mental or physical disability only increases with age, which is why LTC insurance becomes an increasingly important benefit for all of us! 

3)     Create an Estate Plan: An estate plan should be developed as early as possible, to reduce the financial burden on your family.  This includes creating a will, living will and possibly a trust, naming an executor of your estate, and setting up a durable power of attorney to appoint someone to handle your financial and medical affairs, if you are unable to do so in the future.

4)     Purchase Life Insurance: There are a variety of life insurance policies to consider today, but the main objective of life insurance is to protect your family against the loss of income, if you pass away.  Life insurance provides financial security to your beneficiaries, and is another great way of guarding against the unexpected.

These 4 key components are essential for anyone putting together a comprehensive retirement plan.  They can provide retirees with extra benefits and security, that go above and beyond what you will receive through Social Security or a pension, and can protect you against life’s unexpected surprises! 

I would like to hear from you on this week’s important topic. Have you crafted a retirement plan that will see you through to the end? Have you protected yourself from the unexpected events in life? Let me know. Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

-Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

Trick or Treat!?

This week’s CBTV show is entitled, “Is Your Financial Advisor a Trick or Treat? The Truth About Some of the Bad Apples Out There!”

The U.S. Department of Justice recently released the United States Attorneys’ Annual Statistical Report for Fiscal Year 2010, which revealed an 8% increase in the number of “white collar” financial fraud cases.  It was also reported that “white collar” fraud made up a greater percentage of overall criminal cases in 2010 at 9.4%. The good news, is that of all the cases prosecuted in 2010 by the U.S. Attorneys’ office, the conviction rate was an astounding 91%!  More than 1,500 defendants were convicted of a financial crime during fiscal year 2010, for crimes ranging from Ponzi schemes, to mortgage fraud, securities fraud, and quite a few others. 

“White collar” crimes are defined as “non-violent” crimes, committed by an individual or group, for financial gain.  Typically, white collar criminals pose as professionals and have knowledge of financial policies and investments.  In an effort to prosecute these criminals, the federal government has enlisted the Offices of the U.S. Attorney General to serve as the nation’s principal litigator and “chief federal law enforcement officer.”  They prosecute the federal financial fraud cases that are reported to the Securities and Exchange Commission or those investigated by the FBI.  In their Fiscal Year 2010 Annual Report, they revealed that white collar criminal cases involving lending and investment frauds were on the rise in 2010.  Fortunately, they closed nearly 6,000 cases throughout the year, with nearly 8,000 defendants convicted, and almost two-thirds of them being sentenced to prison.

The Federal Trade Commission (FTC), who is responsible for protecting consumers from fraud, deception and unfair business practices, recently released its annual list of top consumer complaints for 2010.  “Imposter scams” made the top 10 list for the first time.  These scams take place when imposters pose as friends, family members, respected companies or government agencies, and convince consumers to send them money.  The FTC received over 1 million consumer complaints in 2010, and 4% of those were imposter scams.  One particular imposter scam is taking advantage of senior citizens, and is known as the “grandparent scam,” with scammers posing as grandchildren in dire need of financial help.  Another type involves homeowners struggling to avoid foreclosure, with scammers offering to secure a mortgage loan modification for a fee.  “Texting” scams have also become quite popular, with the victim receiving a text message on their cell phone, which says that one of their bank accounts is frozen, and they need to call a number and reveal their account information. 

White collar crimes are a real concern for everybody today, particularly those older Americans who are struggling financially.  The federal government has tried to put an effective consumer protection system in place to fight financial fraud, using organizations such as the SEC, the FBI, the FTC, and the U.S. Attorney Generals Office.  But they can only do so much, and they really can’t help victims who don’t file a complaint. The FTC conducted a random telephone survey a few years ago and found that only 8.2% of victims actually reported these crimes.  That means more than 90% of all victims are not taking any action! So the real key here, is to be vigilant whenever you’re approached with any investment opportunities that seem “too good to be true,” and question everything. The fact of the matter is, there are a lot of bad apples out there, so be sure you investigate them thoroughly, before you take a big bite out of any one of them!

To help you in selecting the very best financial advisor you can find, be sure to log on to our website and download our FREE report, “10 Questions to Ask Your Financial Advisor – Before You Invest a Dime With Them!” - a free report that gives you the information and tools you need, to select the best financial advisor you can to help build a financially secure future.

I would like to hear from you on this important topic. Have you ever been a victim of a financial scam or fraud? Did you recover all or part of your investment? Did you report it? Let me know.

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

-Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick

New Bank Fees

This week’s CBTV show is entitled, “New Bank Fees Got You Down? Let our Checks and Balances Process Help!”

New federal debit card rules went into effect on October 1st, reducing the fees financial institutions can charge merchants to process each debit card transaction, from an average of 44 cents to 21 cents.  Major banks with more than $10 billion dollars in assets have seen the amount of revenue made from debit card transactions, cut in half as a result of these new federal rules.  Unfortunately for most Americans, this has forced many banks to find new ways to replace this lost revenue, and they’re looking to you and me to fill the void. Bank of America recently announced it would start charging their depositors a $5 monthly fee to help offset this loss in revenue. As you can imagine, this set off a backlash from customers who are sick and tired of incurring additional fees, especially during these financially trying times.  In the face of hard economic times and corporate greed, as demonstrated outside the halls of Wall Street lately, this latest move by some banks to nickel and dime their loyal depositors, is coming to a boil!

Bank of America is the largest financial institution in the U.S., and estimated that the cap on transaction fees would cost it approximately $2 billion dollars annually in lost revenue.  Their response was to charge its customers a new monthly fee of $5 for debit card transactions, beginning early next year.  An additional $60 per year, per customer would give Bank of America $3 billion dollars a year in new revenue, based on its 57 million depositors, providing the bank with $1 billion dollars more than it was making previously.  But Bank of America is not alone. Other major banks such as JPMorgan Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets and Atlanta-based SunTrust bank began charging a $5 monthly fee this past summer.

Some have argued that the government’s overregulation of banks through the Dodd-Frank Act has resulted in banks simply passing along their loss in revenue to consumers. However, losing a significant amount of revenue has given major banks little choice, but to charge extra fees to their customers.  Two weeks before revealing the new monthly debit card fee, Bank of America announced plans to cut 30,000 jobs as part of a plan to save $5 billion dollars through 2014, revealing that times are tough for banks as well.   

In this current economic climate we find ourselves in, it seems as though we are constantly being nickel and dimed by the companies we do business with.  From companies like Bank of America who will soon charge their customers $5.00 a month to use their debit cards, to airlines charging travelers extra money to check their bags, to major consumer goods companies who have down-sized the contents of their product, but still charge the same money, it’s consumers who are ultimately paying the price!

As CBTV celebrates our first year anniversary, we want to remind you that Checks and Balances TV is all about bringing you balanced advice and financial truth, so you can make informed financial decisions.  Our Checks and Balances process is designed to give you a balanced perspective on all things financial, to teach you about other options available, and give you both sides to every story, so you can take control of your finances and gain financial freedom.  We work very hard to continuously give you the information you need to financially succeed, and we thank you for your support in making CBTV, America’s #1 source for balanced financial advice!

Until next week, Dump Debt, Invest Wisely, Believe in Yourself and Make it Happen!

-Matt

http://www.ChecksandBalances.TV

http://www.facebook.com/ChecksandBalancesTV

http://www.twitter.com/MatthewJRettick