If you were to ask a group of Americans to pinpoint poverty in this country, a good many would tell you you to turn a watchful eye to the inner-city blocks. Perhaps others would suggest you look at the isolated valleys of rural Appalachian coal mining towns. But few would point you to the suburbs, our country’s neatly manicured, leafy green mazes of driveways and cul-de-sacs. That’s a shame; it’s this very misperception that makes the issue so pernicious.
Investing in the market without taking losses — is it too good to be true? Not according to the University of Michigan’s head coach Jim Harbaugh. In August, University of Michigan helped Harbaugh become the top-paid college football coach in the nation, according to USA Today figures, by creating a deferred compensation package utilizing cash value life insurance called Indexed Universal Life Insurance (IUL).
As an entrepreneur, you are used to taking risks. You’ve rejected the steady paycheck of an employer to become the employer. You’ve turned personal finances into company finances. You’re even prepared to go down with the ship, although you would really like to make sure that doesn’t happen. Not everything has to be a risk, though. Some investments offer more security than others. With the right planning, you can secure earnings and sleep easy, knowing that a portion of your money is safe and growing.
As if being laid off weren’t stressful enough, most Americans don’t have enough money saved to pay monthly bills if they’re jobless for more than a few weeks. But you can avoid that added stress: Create an emergency fund now for potential unemployment. A recent NerdWallet study found that Americans don’t save enough to weather several common emergencies, the most expensive being unemployment.
With a few more days left in April, which has been designated Financial Literacy Month, now is a great time to brush up on savings strategies that may have long-term effects on your financial health. Saving for retirement, for example, is something we all need to think about, but it can be challenging for workers of any age. For those just starting out, retirement may seem like a faraway abstraction full of unknowns, like how much you should set aside from each paycheck or how much you’ll need to accumulate to have the lifestyle you want in retirement. While some of those details may be ironed out over time, there are plenty of actions you can take throughout your stint in the workforce to get closer to meeting your retirement savings goals.
Many people do not view life insurance as an essential and vital part of a retirement income plan. They see life insurance primarily as a way to protect families from the early loss of a breadwinner during the working years. However, life insurance has the potential to be so much more if properly utilized in a comprehensive retirement income plan. According to Jen Sias-Lyke, State Farm® Insurance Agent, “Life insurance plays an important role in any financial plan. It helps loved ones recover from financial risks and unexpected costs, increasing their chances of reaching long-term goals and achieving dreams. Thinking about financial protection and retirement can seem overwhelming, but as your life changes so does your financial situation.”
Here’s one more way getting old is getting more expensive. Long-term care insurance, which covers expenses like nursing home care, at-home nursing care and other late-life needs, is fast becoming too costly for many retirees to afford, according to a recent study from LifePlans, an industry research firm. The average annual premium was $2,727 in 2015, an increase of 42% from 2005 and of 19% from 2010. Of those surveyed who were over 50 years old, 55% said they opted not to purchase coverage because it was too expensive.
Are American families becoming more financially resilient? Hardly. A new report from Pew Charitable Trusts found what many economists already know: many American families struggle to make ends meet when facing a financial shock.
“It does not come as a surprise,” George Washington University economist Annamaria Lusardi said of the study, released earlier this month.
Last year, the Federal Reserve reported that 46 percent of Americans would not be able to cover a $400 emergency expense or that they’d have to sell something or borrow money to do so. The Fed’s report in 2015 found that 47 percent would have a hard time coming up with such an amount.
Women live longer than men and face distinctly different challenges in funding their healthcare needs in retirement. According to a 2016 study by HealthView Services, a 65-year-old man who retires this year will spend an average of $200,000 on health care in retirement, while a woman will spend $235,0001 — $35,000 more than their male counterparts. With these expenses in mind, it’s not surprising that the cost of health care is one of the biggest retirement planning concerns for Americans.
Buying life insurance now provides a financial safety net for your dependents later if you’re not around to take care of them. After you’re gone, your family can use the proceeds to cover funeral costs, mortgage payments, college tuition and other expenses. There are two main types of life insurance.