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Transitioning to Retirement

Change is never easy, at least for most people. And the people who do adjust to change well are often serial planners, knowing how to prepare well in advance.

But when it comes to retirement, even when you know decades ahead of time that it’s going to eventually happen, you may still have trouble adjusting to change. This can be particularly true if retirement happens earlier than you expected. In fact, 49 percent of Americans retire unexpectedly because of health problems, disability, spousal-care demands and downsizing. For many, this unexpected change in employment can cause a financial hardship.

[CLICK HERE to download the report, "EBRI's 2014 Retirement Confidence Survey: Confidence Rebounds -- for Those with Retirement Plans," EBRI Issue Brief #397 at Employee Benefit Research Institute, March 2014.]

[CLICK HERE to read the article, "8 Job Killing Companies," at CNNMoney, Aug. 15, 2014.]

Another way you can adjust to retirement is by conducting your own internal downsizing — of your home. A former telecommunications mogul out of Atlanta decided to save money on an agent commission by selling his multimillion, 50-acre estate as “For Sale by Owner.” It took a lot of time and money to pursue this strategy, but he seemed happy with the outcome.

In this robust seller’s market of low inventory, more homeowners are trying to sell houses on their own. If you find yourself suddenly retired with nothing but time on your hands, this is a strategy that may be worth considering.

[CLICK HERE to read the article, "A Multimillion-Dollar Estate, for Sale by Owner," at The New York Times, Aug. 15, 2014.]

[CLICK HERE to read the article, "More Home Sellers Choosing 'For Sale by Owner' Route," at Prairie Business Journal, Aug. 5, 2014.]

Of course if you don’t want to sell the family home, you could always rent it. The real estate market as it stands now offers some pretty interesting benefits to retirees who own a second home. Rental property can offer a relatively stable stream of income for retirees looking to supplement their finances before applying for Social Security benefits.

[CLICK HERE to read the article, "Retire as a Landlord," at AliciaGaratoni.com, July 7, 2014.]

[CLICK HERE to read the article, "More Homeowners Becoming Landlords," at CNNMoney, June 17, 2014.]

What about dealing with the issue of how to spend all that free time in retirement? There’s a new breed of “retirement coaches” that specialize in nonfinancial issues of life after traditional work, ranging from helping retirees get involved in volunteer activities to living a healthier lifestyle. Just be sure not to trust your finances to anyone who is not properly licensed and credentialed to give you guidance on the subject for which you are considering hiring them.

[CLICK HERE to read the article, "Now we Need a Coach for Retirement, too?" at Marketwatch, Aug. 7, 2014.]

That’s where we come in. If we can help address your needs as you transition to a retirement lifestyle, please give us a call.

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

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal 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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Lessons of a Millennial Nation

The so-called millennial generation — those born after 1980 and before 2000 — continues to suffuse news headlines. There are actually more millennials (80 million) now than baby boomers. Perhaps continued interest in this age group is driven by hope that it will become an economic force to propel our nation’s humdrum growth. Now reaching adulthood, this demographic is poised to spend greater discretionary income, buy homes, have children, start up successful companies and pour its newfound earnings into the securities markets.

Similar to previous young adult generations, millennials are idealists. Consider that:

  • The millennial generation is skeptical of political and religious institutions
  • Sixty-four percent of millennials said they would rather make $40,000 a year at a job they love than $100,000 a year at a job they think is boring
  • Record numbers of new college graduates are applying for jobs in the Peace Corps, AmeriCorps or Teach for America
  • Millennials have indicated a stronger likelihood to buy from companies that support solutions to specific social issues
  • This generation has raised health-consciousness to a new level, with 12 percent professing to be “faithful vegetarians”
  • According to Pew Research, millennials are the nation’s “most dogged optimists”
[CLICK HERE to read the article, "Generation Nice," from The New York Times, Aug. 15, 2014.]

[CLICK HERE to read the article, "Of Americans, 45% Say They're Spending More Than Year Ago," from Gallup, Aug. 15, 2014.]

[CLICK HERE to read the article, "The Recession Generation: How Millennials are Changing Money Management Forever," from Forbes, Aug. 18, 2014.]

The world millennials must navigate today is a bit different than that of previous generations during their young adult years. Whereas in the past, national stories came and went via brief coverage on nightly news and daily newspapers, this generation has been exposed to public atrocities both domestic and abroad through 24-hour news cycles — including terrorist attacks; ongoing and unresolved wars; the Great Recession; floods, earthquakes, tornados and tsunamis; mass shootings at Columbine and the University of Virginia — and the list goes on and on.

In addition, “new-age” pitfalls accompany today’s fast-paced technology advancements, such as security breaches of personal, financial and medical data.

[CLICK HERE to read the article, "Hospital Network Hacked, 4.5 Million Records Stolen," from CNNMoney, Aug. 18, 2014.]

[CLICK HERE to read the article, "What Hackers Know About You," from CNNMoney, accessed Aug. 18, 2014.]

There is much to be admired about our new crop of young adults. It is a generation that came of age during the recession, absorbing the ensuing lessons that — if we’re lucky — will last their lifetime. They embody a boundless spirit of possibility, yet do so having already suffered hardships of overwhelming student debt and high levels of unemployment. As parents and grandparents, we can give ourselves a pat on the back for raising an enlightened generation with an enduring spirit — and learn from them as well.

[CLICK HERE to read the article, "The Four Leadership Lessons Millennials Really Need," from Forbes, Aug. 14, 2014.]

[CLICK HERE to read the article, "Work + Home + Community + Self," from Harvard Business Review, September 2014.]

Remember that as our lives lead us down different paths, we develop skills and knowledge based upon individual experience. Yet in other areas, we must depend on the knowledge of others. When it comes to securing your financial future, please know that you can rely on us for guidance. Contact us whenever you have questions or concerns.

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal 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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Problems, Solutions… And More Problems

Retail Health Care
Retail health care is on the rise. If you’re not familiar with this term, it may be coming to a Wal-Mart near you. In fact, Wal-Mart shoppers in Florence and Sumter, South Carolina, can now get a checkup at an in-store health clinic after they check out with a cashier.

Does Wal-Mart care about the health of its customers and employees? Sure. But at the forefront of this business plan is an effort to grasp some of the billions of health care dollars spent by its massive constituency every year. Wal-Mart’s plan is to increase store traffic as a result of customers who come in to fill prescriptions and get a flu diagnosis, then decide to shop for a few household items while they’re there.

What does the Wal-Mart approach mean for the health care industry as a whole? Perhaps the same as what it meant for the grocery, hardware and electronics sectors: more competitive pricing. But with low prices comes an intrinsic stratification of quality — is Wal-Mart the appropriate medical facility for mainstream America to have its most prevalent chronic diseases managed?

[CLICK HERE to read the article, "In Ambitious Bid, Walmart Seeks Foothold in Primary Care Services," from The New York Times, Aug. 7, 2014.]

[CLICK HERE to read the article, "Beyond the Clinics: What the Retail Movement Really Means," from The Advisory Board Company, July 29, 2014.]

Corporate Inversion
Twelve U.S. companies have reincorporated in low-tax countries since 2012, with eight more on deck to do so in the coming year. Why? Because the U.S. corporate income tax rate, currently at 35 percent, is the highest in the developed world, and we’re one of only a few countries that levies taxes on profits generated by a U.S. subsidiary in a foreign country.

We could lower taxes, but the federal government is in a bit of a budget deficit bind these days, and tax reform is one of those issues that’s “too big to debate” during an election year. For now, the debate ensues as to whether American companies or the American government should be at a tax disadvantage.

[CLICK HERE to read the article, "Tax Inversion: How U.S. Companies Buy Tax Breaks" from Bloomberg, July 18, 2014.]

[CLICK HERE to read the article, "Inverting the Debate Over Corporate Inversions," from The New York Times, Aug. 6, 2014.]

Robot Workers
Apparently, we are now faced with a conflict over whether technology-based robots will threaten employment levels. This brings to mind past debates as to whether reproductive cloning would be used to engineer a new race of people with superior traits. Alas, for every solution, there is a problem.

[CLICK HERE to read the article, "Experts Have no Idea if Robots Will Steal Your Job," from The Harvard Business Review, Aug. 8, 2014.]

[CLICK HERE to read the article, "Is Your Job at Risk From Robot Labor? Check This Handy Interactive," from Quartz, April 29, 2014.]

For every step forward, there are often tradeoffs and drawbacks. For example, should you spend money to retrofit your home with environmentally friendly features in order to save on utility bills in the future? And if you do, will your future repair and replacement bills be higher? Each financial decision we make behooves us to consider the return on investment both in individual households and throughout our national economy.

For every concern, perhaps there is a solution; but often our solutions create other concerns. When it comes to your financial confidence, these are the debates we can help you with through information and industry insights. Turn to us to help you find the solutions that can work to elevate the confidence you have in your individual situation.

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

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal 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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Cautious Optimism

According to Guggenheim Partners, the most recent data from leading economic indicators, ranging from hiring to housing, demonstrates that the U.S. economy is “firing on all cylinders.” However, CIO Scott Minerd harkens back to the summer of 1987 when investors, deluded by a benign risk environment, failed to recognize the levels of overvaluation present in the market. This ultimately led to the dramatic October 19 market drop known as Black Monday.

[CLICK HERE to read the article, "Guarding Against Complacency," from Guggenheim Partners, July 9, 2014.]

According to the Organisation for Economic Co-operation and Development (OECD), the impact of the last recession still reverberates among many demographics. In fact, poverty rose by two percentage points in rich countries between 2007 and 2011. Worldwide, young adults suffered the biggest income losses during the recession. Interestingly, this age group currently is at the greatest risk of income poverty, whereas just 25 years ago it was the over-65 age group that faced the greatest risk. Now the 65-plus demographic is in the most positive financial shape.

[CLICK HERE to read the article, "The Measure of Poverty," from the OECD, June 30, 2014.]

The government has taken steps to protect both businesses and consumers against the severity of a future financial crisis. In the wake of the recession, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010, which mandated stronger regulation of Wall Street finance and private equity firms.

[CLICK HERE to read the article, "On its Fourth Anniversary, Has Dodd-Frank Begun to Bite?" from The Center for Economic and Policy Research, July 17, 2014.]

Fidelity discusses a “protected accumulation strategy” to help guard against today’s potential market volatility. This tactic locks in a portion of your future income and protects it from market drops.

[CLICK HERE to read the article, "Safeguard Your Retirement Income," from Fidelity, July 10, 2014.]

New research reveals that money can only enhance your life to a certain degree. How you feel about your life and accomplishments can improve with higher income and education levels, but the study concluded that, on average, there is a certain level of annual income at which needs are met and Americans are not likely to be any happier as a result of higher earnings. This salary range varies by state based on the cost of living: In Hawaii it is $122,175 per year; $65,850 in Mississippi.

[CLICK HERE to read the article, "Here Is the Income Level at Which Money Won't Make You Any Happier in Each State," from The Huffington Post, July 17, 2014.]

We’d like to emphasize this notion of “cautious optimism” when it comes to your financial picture. Economic prospects may be improving at the national level, but each household’s circumstances are different at the personal level. If we can help you assess your situation to guard against complacency, please contact us.

Guarantees and protections provided by insurance products including annuities are backed by the financial strength and claims-paying ability of the issuing insurance carrier.

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

These articles are being provided for informational purposes only and should not be used as the 
basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal 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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Equal, Yet Separate

The U.S. Declaration of Independence declares that all men are created equal and endowed with certain unalienable rights — such as life, liberty and the pursuit of happiness. However, new research from Stanford indicates the pursuit of happiness is increasingly aligned with affordability. The study asserts that America’s cities are becoming more divided into two distinct groups, with college-educated workers clustered in more desirable locales that less-educated people cannot afford.

The paper reports that the economic divide between high-skill workers and those without a college education increased by 67 percent from 1980 to 2000. As a result, American cities that feature higher paying jobs also have higher housing expenses — and a better quality of life. The study suggests that cities with a higher cost of living offer residents who can afford to live there more amenities for quality living, such as entertainment, educational opportunities, better air quality and lower crime rates.

[CLICK HERE to read the article, "Rebecca Diamond: What is Happening to America's Cities?" at Stanford Business, July 8, 2014.]

[CLICK HERE to read the article, "Has Income Inequality Lessened Under Obama?" at msnbc.com, July 24, 2014.]

While the 14th Amendment of the Constitution guarantees protection under the law to all citizens, for more than 50 years a doctrine citing “separate but equal” policy allowed the government to permit services, facilities, public accommodations, housing, medical care, education, employment and transportation to be separated along racial lines as long as the quality of each group’s public facilities was equal. That doctrine was overturned by a series of Supreme Court decisions starting in 1954.

[CLICK HERE to read an explanation of "Separate but Equal," at Boundless.com, accessed Aug. 15, 2014.]

This year marks the 60th anniversary of the landmark Supreme Court decision in Brown v. Board of Education, whose ruling supposedly ended the “separate but equal” system of societal segregation. Debates still continue as to whether desegregation truly exists in all areas of the country, but that issue could merge with the recent attention to today’s updated form of income inequality, economic mobility and even geographic segregation.

Research from the International Monetary Fund (IMF) further concludes that, while inequality may be ethically undesirable, it may also cause low and unsustainable economic growth.

[CLICK HERE to read the article, "K-12 Education: Still Separate, Still Unequal," at Education Week, May 13, 2014.]

[CLICK HERE to read the report, "Redistribution, Inequality, and Growth," at IMF, Feb. 2014.]

A recent article in TIME magazine reported one top economic advisor’s solution to “fix” income inequality as it relates to saving for retirement. Former White House economic adviser for the Clinton and Obama administrations, Gene Sperling, proposed reducing the 401(k) tax advantages that offer a greater benefit to high income earners while creating a government-funded universal 401(k) plan that would benefit lower-income workers by incorporating low fees, safety, a generous match and automatic enrollment.

[CLICK HERE to read the article, "How to Fix the 401(k) and Income Inequality in One Fell Swoop," at Time, July 23, 2014.]

As we make decisions regarding our retirement income strategy, it’s important to consider ways we can help forge a better path not just for ourselves but for our children, grandchildren and our legacy. Financial issues such as student loan debt, scarcity of jobs and lack of opportunities all have an impact on long-term success.

[CLICK HERE to read the article, "Inequality's Not All Equal," at U.S. News and World Report, July 24, 2014.]

[CLICK HERE to read the article, "Why Voters Aren't Angrier About Economic Inequality," at The New York Times, July 24, 2014.]

If we can help you establish a retirement income plan that can help you feel more confident about your 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.

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal 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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Failure to Launch … a Materialistic Generation

Young adults have had a relatively tough time over the past four or five years. Entry-level jobs have been scant for the onslaught of recent college graduates, many of whom have taken menial jobs to make ends meet until a “real job” comes their way.

According to Pew Research, in 2012 only one-third of engineering majors got work as engineers, and only 26 percent of physical sciences majors worked in any science, technology, engineering or math occupation.

[CLICK HERE to read the article, "Chart of the week: Where engineering and English majors end up working," from Pew Research, July 11, 2014.]

The scarcity of jobs has forced many young people to live at home, either while in college or after graduation. Approximately 56 percent of young adults ages 18 to 24 lived in their parents’ home in 2012, while 16 percent of those ages 25 to 31 did so as well.

[CLICK HERE to read the article, "A Rising Share of Young Adults Live in Their Parents' Home," from Pew Research, Aug. 1, 2013.]

However, a little bit of adversity doesn’t usually hurt. In addition to building character, it can also create a heightened sense of accomplishment and appreciation when your proverbial ship does come in. According to Scott Hammond, a clinical professor of management at the Huntsman School of Business at Utah State University and author of “Lessons of the Lost: Finding Hope and Resilience in Work, Life, and the Wilderness,” when bad things happen, one of the most important things you can do is cultivate hope for something better to come.

While working at something other than their dream jobs, the millennial generation appears to be doing just that. A new study from Transamerica Insurance reveals that millennials are actually beginning to save for retirement earlier than their baby boomer parents. While most baby boomers started saving for retirement at around age 35, 70 percent of people in their 20s and 30s have already started saving. Unfortunately, the rest of them appear to be at the opposite end of the financial spectrum, living paycheck to paycheck (if they’re lucky) and otherwise drowning in student loans and consumer debt.

[CLICK HERE to read the article, "How Resilient People Stand Back up When Life Knocks Them Down," from Fast Company, 2014.]

[CLICK HERE to read the article, "Study: Millennials Saving Better than Baby Boomers," from NBC San Diego, July 8, 2014.]

In this post-recession world of tentative jobs, tight credit and oppressive student loan debt, young adults may be more risk averse and rightfully skeptical of the value of status and wealth. Perhaps this new generation now better appreciates the things handed to them by their parents just a decade ago — like cars, laptops and cellphones. As each new generation becomes parents, it passes on values both learned and experienced. So in the future, their children and grandchildren may return to the values of saving for what they want instead of relying on credit. Perhaps.

In the meantime, we’re here to help you and the young adults among your family and friends work toward developing sound financial habits for the future. If we can offer guidance, please give us a call.

[CLICK HERE to read the article, "He's the Top U.S. Mortgage Salesman. His Daughter Isn't Buying It," from Bloomberg, July 1, 2014.]

[CLICK HERE to read the article, "Dispersing Millennials," from New Geography, July 9, 2014.]

[CLICK HERE to read the article, "Commentary: Millennials Think Government Is Inefficient, Abuses Its Power, and Supports Cronyism," from Public CEO, July 11, 2014.]

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

These articles are being provided for informational purposes only and should not be used as the 
basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about their personal situations.

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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More or Less

Sometimes it feels like there’s just more to do these days. Our houses are bigger and our toys more sophisticated, so there’s more to maintain. On the other hand, we can buy prepackaged salads and don’t have to shell peas anymore. Our cars don’t need oil changes nearly as often, and our ovens self-clean. But between checking emails, returning calls, running errands, carpooling children and being on-call for work and family issues 24/7, it’s important to take time out to simply do less.

In fact, according to a recent research paper, making time to do absolutely nothing can help foster our imagination and improve mental health.

[CLICK HERE to read the article, "The Importance of Doing Nothing," at Forbes, July 1, 2014.]

[CLICK HERE to read the white paper, "Doing Nothing and Nothing to Do: The Hidden Value of Empty Time and Boredom," at INSEAD, 2014.]

While this summer might be the perfect season for us as individuals to do nothing, corporations, U.S. government agencies and other nations at large have been busy doing some very positive things.

For example, businesses and governments went on a hiring spree in June, which yielded a drop in the unemployment rate to 6.1 percent. The good news is that the rate hike is due to people finding jobs, not simply giving up hope of finding one and dropping out of the job market as they have in the past.

[CLICK HERE to read the article, "Solid U.S. Job Gains Pointing to a Stronger Recovery," at The Associated Press, July 3, 2014.]

[CLICK HERE to read the article, "Five Takeaways from the June Employment Report," at The Wall Street Journal, July 3, 2014.]

[CLICK HERE to read the press release, "Employment Situation Summary," at the Bureau of Labor Statistics, July 3, 2014.]

Also recently, the U.S. Department of Treasury issued final rules allowing longevity annuities to become more available to 401(k) and IRA markets. This salary deferral option allows participants to shelter a portion of their retirement plan savings to be distributed at a later age (typically 80 or 85), skirting the required minimum distribution at age 70½.

[CLICK HERE to read the article, "Treasury green lights annuities in 401(k)s" at Producers Web, July 2, 2014.]

But if you are exclusively focused on the positive news in the U.S., you could miss out on opportunities elsewhere. A recent report cites Argentina, Denmark and India as the top three best performing markets in the world, with the U.S. coming in at number 32.

[CLICK HERE to see the interactive chart, "Best performing global markets" at CNNMoney, June 27, 2014.]

We work very hard to earn our money, but many times we set up financial strategies and never look back. It’s important to remember, however, that there are times when it’s good to do nothing, and there are times when it may be beneficial to react to the constant changes in our world. If you would like a mid-year review to discuss your current retirement strategy, please give us a call.

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

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal 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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Lessons We Can Learn from Youthful Transgressions

These days it seems that few people from age ten to twenty can be seen without a cell phone in hand. Now that school is out, parents complain of adolescent boys spending the summer playing video games, while girls are having full-on tête-à-têtes in 160-character text messages. One positive way to look at it is that adolescents can have virtual playdates without tracking dirt throughout the house and pilfering the fridge, not to mention learning the art of give and take in conversation.

[CLICK HERE to read the article, "How to Use Tech Like a Teenager," at The Wall Street Journal, June 11, 2014.]

If the last generation of youth was labeled the “entitled ones,” this new crop of kids is one of instant gratification — they need constant stimulation 24/7 or they complain of being bored. But before we all stand on our high horse and judge, please take a moment to consider what you did all summer when you were 12 or 13 years old. Chances are good you slept a lot, watched too much TV, your parents called you lazy and they threatened to have you tested for mono.

[CLICK HERE to read the article, "Why Playing Minecraft Might Be More Healthful for Kids than TV," at NPR, March 28, 2014.]

[CLICK HERE to read the article, "5 Reasons to Get More Girls Playing Minecraft," at Sugarpop, June 6, 2014.]

Some things never change, whether our options are climbing trees and riding bikes, or taking selfies and watching YouTube videos. The vast majority of teens and preteens simply do not do what their parents want.

But what is to become of a nation of technology-enabled — nay, obsessed — youth? Will every one of them grow up to become a Steve Jobs or Bill Gates? Not likely. Are there welders, nurses, schoolteachers and firemen in that bunch? Undoubtedly.

[CLICK HERE to read the article, "Minecraft is Shaping a Generation, and that's a Good Thing," at Forbes, April 26, 2014.]

The takeaway is that this information-enhanced generation could be able to perform their jobs better with less training. What they don’t know, they can Google. What skills they lack, they can learn by watching videos online. Is it so bad to have immediate access to information previously acquired through years of hard work and on-the-job training? Is it a crisis that a young recruit can visit an online forum and ask other participants what they’re being paid before negotiating salary and benefits with a potential employer?

It’s the age of transparency. That transparency may have been brought on by the transgressions of adults working on Wall Street and in other industries, but it will be perpetuated by this whole new generation of knowledgeable and tech-savvy youth. They will insist on fair play because they know what companies are up to: They can research everything from how employees are treated to the number and types of customer complaints levied before they even accept a job. The “good ol’ boy network” has expanded to 1,500 Facebook friends all over the world. They’ll have choices; even the slackers — the ones online all day instead of hitting the books.

We worry. We worry as parents and citizens who imagine that technology is contributing to the denigration of society. We shake our heads when we see a teenager staring at his phone while out to dinner with his parents. But honestly, didn’t your parents embarrass you at that age? Wouldn’t you have loved the ability to chat and play online with a group of 10 friends (maybe even one or two in another country) while holed up in the house on a rainy — or excessively hot — afternoon? Maybe not, but there are plenty of positives and no end of parallels between the way this era of youth behaves compared to previous generations.

[CLICK HERE to read the article, "Silicon Valley's Youth Problem," at The New York Times, March 12, 2014.]

Are today’s youth obsessed with technology? Perhaps. But let’s not focus on the trees. Look up and gaze into the forest and on the horizon, to the great leaps that today’s empowered children will make in tomorrow’s world.

[CLICK HERE to read the article, "Taking the Learning Tablets," at The Economist, June 7, 2014.]

The same notion could apply to your financial situation. The due diligence we conduct today can help provide a more confident financial future. So don’t fret about the day-to-day blips in the economy; look beyond surface concerns and consider the long-term potential of your action plan for retirement. Designing a sound financial strategy that incorporates insurance products, like annuities, can help you on the path toward the financial independence and retirement lifestyle you desire. We are here to help.

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

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about your personal 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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Fed Dovetail

In consideration of the current labor force participation rate and the fact that many discouraged workers may re-enter the job market, Scott Minerd — Global CIO at Guggenheim Partners — recently predicted the Federal Open Market Committee (FOMC) won’t increase interest rates until as late as early 2016.

[CLICK HERE to view the video, "U.S. Monetary Policy and Fixed-Income Outlook," by Guggenheim Partners, April 28, 2014.]

[CLICK HERE to read the article, "A New Secular Bull Market?" from Fidelity, June 20, 2014.]

[CLICK HERE to read the article, "Bullard: Markets Think Fed is More Dovish than it is," from MarketWatch, June 26, 2014.]

Now that the Federal Reserve’s quantitative easing (QE3) program is winding down, insiders are questioning what the central bank intends to do with the bonds it has purchased, which contributed to the bank’s inflated balance sheet, estimated at $4.3 trillion in assets. When you consider that bond values drop when interest rates rise — as it is believed they inevitably will — without an effective exit strategy the Fed’s substantial bond portfolio could suffer. It’s important to recognize that bonds held to maturity will pay at par assuming there is no default. However, since the Fed created this market, the question remains as to what it plans to do with its excess holdings. Chairwoman Janet Yellen has indicated that this fall the Fed will announce a revised plan to shrink its balance sheet.

[CLICK HERE to read the article, "Fed's Balance Sheet Punctuated by a Big Question Mark," from The New York Times, June 27, 2014.]

[CLICK HERE to view the chart, "Walking a Tightrope: How Deutsche Thinks the Fed Will Exit Ultra-Loose Policies," from Fox Business, accessed June 27, 2014.]

One analyst at BlackRock suggests that the Fed’s decision to keep interest rates low actually may be inhibiting economic growth and job creation. For example, low rates create a tenuous environment for older workers to retire and live on a fixed income. With delayed retirements, fewer jobs open up, which serves to keep the jobless rate high. Furthermore, because it’s cheaper to borrow money now, many corporations have put plans on hold to reinvest in organic company growth.

[CLICK HERE to read the article, "5 Reasons Why Excessively Low Rates May be Harmful to the Economy," from BlackRock Research, June 26, 2014.]

Today’s FOMC is generally described as “dovish,” meaning it takes a more minimalist, inflation-tolerant approach to money policy, while the opposite is called “hawkish.” Hawkish policies generally favor higher interest rates and tighter monetary controls to keep inflation in check. At the moment, the current low interest-rate environment is expected to last at least throughout this year. Much depends on the unemployment rate, which has proved skittish to follow a strong trend one way or another.

With the woes of the past economic recession still fresh on American minds, it stands to reason that commodity prices and jobs continue to be the standard by which economic growth is measured. If you have concerns about either in your life, or would simply like a mid-year review to discuss your current retirement strategy, please give us a call.

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

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about their personal situations.

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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Health Care at the Forefront

In recent news, we’ve witnessed the fallout of the U.S. Department of Veterans Affairs, where officials falsified records to hide the amount of time former service members have had to wait for medical appointments. As if health care doesn’t get enough bad press, this is just one more scandal indicating the dire need to overhaul the industry, its delivery mechanisms and costs. Both the House and the Senate have passed versions of a VA bill to help rectify the situation, and members of Congress say they are confident of sending a unified version to the president by the end of June.

However, where there is health care, there is a cost debate, and three senators were criticized for voting against a recent bill — saying that fellow lawmakers “put dollars and cents above the interests of the nation’s veterans.”

[CLICK HERE to read the article, "Everything You Need to Know about the VA -- and the Scandals Engulfing It," from The Washington Post, May 30, 2014.]

[CLICK HERE to read the article, "Lawmakers Hope to Send Unified VA Bill to Obama by Late June," from NPR June 12, 2014.]

[CLICK HERE to read the article, "VFW Attacks the Three Republicans Who Voted Against the Senate VA Bill," from The Washington Post, June 13, 2014.]

With adults ranging from ages 18 to 34 under-represented in this year’s open enrollment at health care exchanges, lawmakers are pushing ways to entice this demographic to purchase insurance. A new proposal gaining momentum would offer government subsidies for catastrophic plans. Catastrophic plans offer low monthly premiums but require consumers to foot a hefty share of their annual medical costs. They are designed to help protect healthier people from any negative financial effects due to an accident or an unexpected diagnosis of serious illness, although they also cover basic preventive care at no cost to the consumer.

[CLICK HERE to read the article, "Insurers will Propose Changes to Obama Health Law," from St. Louis Post-Dispatch, June 6 2014.]

[CLICK HERE to read the article, "Insurers Press Obama Admin to Let Them Expand Obamacare Insurance Offerings," from The Daily Caller, June 11 2014.]

Another demographic facing inordinate healthcare expenses is retirees. A couple retiring in 2014 is expected to need $220,000 (in today’s dollars) to cover health care costs in retirement — and that’s if they’re covered by Medicare. If you retire before qualifying for benefits at age 65, you may also have to pay for health care insurance premiums and out-of-pocket expenses to the tune of approximately $17,000 a year.

[CLICK HERE to read the article, "How to Tame Retiree Health Care Costs," from Fidelity, June 11, 2014.]

[CLICK HERE to read the article, "The Decision That Could Cost You $51,000," from Time, June 12, 2014.]

Health care quality and delivery — and how to pay for it — will likely continue to be hot topics for years to come. In relation to your overall financial strategy, it’s important to consider whether or not you have the coverage necessary to help preserve your retirement assets in the event of significant or unanticipated health care expenses. Please give us a call if we can help you better understand the options you may have to further protect your family.

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

These articles are being provided for informational purposes only and should not be used as the basis for any financial decisions. While we believe this information to be correct, we do not guarantee the accuracy or completeness of the information included. All clients are encouraged to consult qualified tax and legal professionals before making any decisions about their personal situation. We are 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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