October 2016


The briskness of Autumn is in the air. It is a time of change as the leaves from the trees are turning beautiful shades of gold, orange and red. Summer activities may be replaced with watching or playing Football and attending Pumpkin Festivals. Farmers markets begin to shift to Fall harvested vegetables such as squash, potatoes, brussels sprouts, and cabbage.

October is a good month to sit back and take a breath. It falls between the rush of a new school year and the start of the busy holiday season. It is a good time to rotate your wardrobe for the winter and review your finances in advance of the holidays.

So don your favorite cooler weather clothing, grab a cup coffee or tea, and spend a moment looking over the items below. There may be some valuable ideas you hadn’t considered in the past that will prove to be beneficial to your future financial well-being.

As always, we are here to help you be more efficient with your money so you can enjoy life!


1. Medicare Open Enrollment starts October 15. Are you still undecided whether to choose Medicare Advantage (Part C) or purchase traditional Medicare (A & B) with a Supplement (Gap coverage) plan? This should help: Contact a couple of nursing home facilities in your area and ask about their experiences working with both types of plans. Ask about the how specific insurance companies handle claims, and their scope of services covered.

2. Six “truisms” that need to be challenged:

  • It won’t happen to me!
  • We should consciously plan to live on less in retirement.
  • The equity in your house is readily accessible.
  • Purchasing a house is an investment decision.
  • You can purchase as much face amount of life insurance as you desire.
  • The highest tax bracket recorded in the United States was 55%.

3. How stable is your pyramid?

4. The assets you own may not be yours if they are not adequately protected! You have four choices for protecting your money.

  • Do nothing—You accept all of the risk.
  • Reduce the risk by transferring some of the risk to a third party (insurance company).
  • Avoid the risk completely.
  • Transfer all of the risk to a third party (insurance company).

5. The Social Security Trust Fund continues to grow. However, with baby boomers cashing-in on the program, the growth has slowed. It is estimated about 8,000 baby boomers are reaching full retirement age every day. The government recently released the figures on the financial condition of Social Security. The reserves at the end of 2014 were $2,720 trillion. Uncle Sam took-in $801.6 billion and paid-out $750.5 billion, for a net change in reserves of $51 billion. The reserves at the end of 2015 were $2.78 trillion.

Special note—There is no trust fund. The funds are paid-in and paid-out of the general operating budget of the US government.

6. Additional Information on How Fixed Annuities Work and Differ.

  • Number of premiums you pay—The money you use to purchase a contract is called the “premium,” and annuities can accept a single premium or a series of ongoing premiums.
  • When the company makes payments to you—Payments can start immediately or be deferred to some future date of your choosing.
  • How the money in the annuity earns additional interest—By declaring a rate in advance or by crediting interest to your policy based on a positive performance of a market—based index such as the Standard & Poor’s 500 Index or the Dow Jones Industrial Average.
  • Penalties associated with early withdrawals—Although you can earn interest in an annuity, it is not a savings account. If you buy an annuity it should be for achieving long-term financial goals. All annuities have surrender charges.

7. Taxes—Enough Said! Federal Income Tax ~ State Income Tax ~ Social Security ~ Medicare Taxes ~Federal Unemployment Tax ~State Unemployment Tax ~ City Taxes ~ County Taxes ~ Property Tax ~ School Tax ~ Estate Tax ~ Alternative Minimum Tax ~ Telephone Taxes ~ License Tax ~ Cable TV Tax ~ Fishing License Tax ~ Electric Tax ~ Road Usage Tax ~ Hunting License Tax ~ RV Tax ~ Capital Gains Tax ~ Vehicle Sales Tax ~ Long Term Capital Gains Tax ~ Internet Tax ~ Heating Oil Tax ~ Gasoline Tax ~ Road Toll Booth Tax ~ Marriage License Tax ~ Hotel Tax ~ Water Tax ~ Real Estate Tax ~ Food License Tax ~ Franchise Tax ~ Watercraft Registration Tax ~ Business Tax ~ Airport Tax ~ Sales Tax ~ Unemployment Tax ~ Corporate Income Tax ~ Gas and Energy Tax ~ Trailer Tax ~ Cigarette Tax ~ Liquor Tax ~ Inventory Tax ~ Well Permit Tax ~ Sewer Tax ~Garbage Tax ~ Accounts Receivable Tax ~ Building Permit Tax ~ Dog License Tax ~ Fuel Permit Tax ~ Luxury Taxes ~ Septic Permit Tax ~ Toll Tunnel Taxes ~ Trailer Registration Tax ~ Well Permit Tax ~ Workers Compensation Tax ~ Ad Valorem Tax ~ Customs Tax ~ Court Fines ~ Generation Skipping Transfer Tax ~ Gift Tax ~ Hospital Facility Utilization Fee Tax ~ Lodging Facility Use Tax ~ Parking Meter Tax ~ Real Estate Transfer Tax ~ Resort Tax ~ Self-Employment Tax ~ Individual Mandate Tax ~ Corporate Mandate Tax…………………

8.Do you know the leading cause of disability claims? According to the Council for Disability Awareness, the leading cause, by a wide margin, is musculoskeletal and connective tissue disorders. This includes arthritis, herniated discs, back pain, etc. The second leading cause is cancer. Injury and poisoning only account for about 10% of all claims. The majority of claims filed were not covered by worker’s compensation. The research also shows that a young person entering the work force has a one in four chance of being disabled before they reach age 65.

Paycheck Protection plans insure against the hardship caused by disabilities and should be an integral part of unexpected events planning.

9. The three most important words when buying a house are location, location and location. The three most important phrases when you are nearing retirement and your earned income stops are safety of principal, safety of principal, and safety of principal. Development of strategies that protect principal requires locating your assets in the proper place.


10. Fidelity’s annual survey on health care was recently released. They claim a 65-year old couple retiring at age 65 would need an estimated $260,000 to cover their health care at retirement. That cost includes Medicare premiums, co-payments, deductibles, and other expenses like eyeglasses and hearing aids. This does not include dental and long-term care costs. This number is significantly higher than just two years ago.

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