Housing Market Recovery is Real, But Problems Remain

Posted on May 10, 2013 by James Garfinkel

According to a recent report following a credit analysts and researchers at the Standard & Poor’s Ratings Services’ Housing and Commercial Real Estate Roundtable, held on April 9, 2013, in San Francisco, the United States housing recovery is stronger and more stable than previous false starts that had buoyed investor confidence.  Standard & Poor’s outlook for housing trends is positive and while noting that a number of challenges remain, the continued recovery is sustainable.

“From what we’re seeing a full recovery will take time, but a combination of low interest rates, low inventory, strong stock market performance and buyer confidence all point to higher real estate prices in the coming years,” notes Shawn Watkins, founder of Investors Workshops in Orange County, California.

Standard & Poor’s expect home prices to increase 8% in 2013 after an increase of 6.8% in 2012.   “The California real estate market is really showing signs of improvement,” according to Angel Bronsgeest, a successful real estate investor in California.  The California Association of Realtors (C.A.R.) recently reported that California equity sales rose to their highest level in 5 years, while California pending home sales rose 14.8 percent from a revised 110.1 in February to 126.3 in March, based on data obtained from signed sales contracts.

Standard & Poor’s notes that the housing market recovery has positive implications for the economy, consumers, and local governments which depend on the real estate market as sources of tax revenue.

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College Savings, Managing Credit Cards and Dealing With Debt Problems

Posted on April 10, 2013 by James Garfinkel

College years are one of the most memorable periods of your life. It is, undoubtedly, the exciting time when you learn, grow and enjoy with your friends to the utmost. However, due to academic stress, social life and money, it can create some kind of disturbance in the minds of the young graduates. So, in order to overcome money worries, the graduates depend on their credit cards without even understanding properly the danger of using it lavishly. Thus, they may end up accumulating excessive credit card debt and the high interest rate charged on it.

The college students are the susceptible victims to credit card debt problems. It is not at all surprising that you start receiving emails from the different credit card companies to buy a credit card as soon as you turn 18 years old. As such, it is vitally important that you gain proper knowledge about using the plastic money prudently. Without having proper knowledge, you may sign up for a credit card that offers low introductory APR, free t-shirts and thus, fall into huge credit card debt trap.

You must be aware about having poor credit score. With bad credit, you will not be able to apply for any new credit card. Also, no lender will agree to approve any kind of loan. This is because the credit card companies and the lender believe that you may default in making the payments since you haven’t been able to manage finances properly in the past. This may put you into unnecessary troubles in the future. So, it becomes very important to know how a student should deal with his/her credit card while being in college.

3 Steps to manage credit card wisely when you are a graduate

It is of extreme importance to swipe your credit cards only when you need to serve the purpose of emergency. The college students should understand when they should use their plastic money. Read on to know about the 3 steps to manage credit card wisely when you are a graduate.

1. Set up some rules and regulations – In order to deal with credit card properly, you should set up some rules and regulations and know for what purpose you may use it. Ask yourself the important questions such as will you use your credit cards only during emergencies or will you swipe it for food, gas, shopping and entertainment. It is very easy to pile up excessive credit card debt particularly when you do not follow any rule to use your credit card.

2. Draft a well-planned budget and stick to it – Make it a point to draft a well-planned budget and stick to it despite being what ever debt situation you may fall into. With the help of a proper budget, you will spend money within your means and avoid accumulating revolving debt. This will also enable you to learn the good habit of handling personal finances efficiently in the future.

3. Understand the clauses of the plastic money – You need to understand the clauses of the plastic money that you have. Even though you may have chosen your credit card from a particular company, you should always see how much it is actually costing you when you decide to buy one. For example, if you had received a 0% APR introductory offer, you should find out the exact date when the APR will increase and by how much it will increase.

Being a college student, if you have amassed credit card debt, you should begin to pay it off immediately. You can start with making more than the minimum payment every month. It will surprise you when you’ll realize how an extra $25 or $35 payment every month may help reduce your debt burden.

You can also transfer your revolving credit card from a high interest rate credit card to a low credit card or 0% APR credit card. Make it a point to find out if there are any hidden fees for transferring balance from one card to the other.

It is important that the college students should maintain credit history till they are using the credit cards responsibly. This can be done by paying down the credit card balance on time and eliminating debt problems. College students should learn to manage their credit cards in a better way when the proper guidelines are set, a proper budget is followed and they understand the terms of their credit card agreement properly.

About the Author

Andrew Jackson is a financial counselor associated with Oak View Law Group, APC now for over 4 years. He analyses people’s financial situations minutely and advises on different debt relief options available. He also helps people manage their budgets through free counseling.

Posted in College Savings, Saving Money, Student Debt | Leave a comment

529 College Savings Plan Contributions by Grandparents Soaring

Posted on March 21, 2013 by James Garfinkel

In 2012, U.S. families 529 college savings plan holdings hit a record $190.7 billion, according to a March 13 report from the College Savings Plans Network.  529 plans are relatively new, but extraordinarily popular — more than 11 million of the accounts have been funded since the plans originated 17 years ago.

Although parents are the primary sources of 529 plan contributions, grandparents now represent 9.5 percent of the total, according to the Financial Research Corp, which tracks 529 investments.

In my wealth planning practice, I am seeing more and more grandparents either providing support to or asking how they can contribute to their grandchildren.  For grandparents, 529 contributions can provide a valuable tax deduction in certain states (like New York).  However, the frequent criticism of 529 plans is they are not flexible investments.  Investment options are limited and often carry high fees.  The funds in a 529 plan can only be used for qualified educational purposes, so if your grandchild has a great jumpshot, backhand or a math whiz and is eligible for a scholarship, you will have to pay taxes to access the contributions you have made to the plan AND pay a 10% penalty.

Many grandparents are looking for additional and alternative college savings plans for their grandchildren and many are exploring the possibilities of juvenile life insurance.  Unlike 529 plans, juvenile life insurance is a permanent life insurance policy and cash value grows tax-free.  Cash value can be accessed by the policy owner as a loan or withdrawal at any time, for any purpose, without penalty.

Whole life is a popular option for juvenile life insurance with returns based on an interest rate and dividend credited annually by the insurance company, indexed universal life insurance provides exposure to the performance of the stock market without downside risk since there is a floor of 0% or 2% on losses, depending on the carrier chosen.

To learn more or request an illustration, contact an experienced insurance agent who specializes in juvenile life insurance.

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Nate Orr and Other Parents See Value in Life Insurance

Posted on February 26, 2013 by James Garfinkel

Nate Orr has been in the construction industry for almost 30 years and currently works for a top contractor in Denver, Colorado.  But the most important thing Nate Orr is building a safe and secure financial future for his wife and three children.  He understands the value of life insurance.

According to the Life Insurance and Market Research Association (LIMRA), 30 percent of US households have no life insurance at all.  The latest research shows that there are 11 million fewer American households covered by life insurance compared with six years ago.  This is a consequence of the recession and a misunderstanding about the cost and relative ease of obtaining life insurance.

A majority of families either do not life insurance or do not have enough life insurance.  They are one accident or serious illness away from a devastating financial loss for their loved ones.

“Life insurance is not like any other financial asset,” says Nate Orr.  “It provides a predetermined sum of money at a specific moment of time –when you need it most.  It relieves your family from the greatest stress possible, replacing the lost income and earning potential of a loved one, at the most difficult time imaginable.”

I have been telling clients for years that their family’s financial future is far too important to leave to luck or good fortune.  A sound financial future for your family’s financial future requires planning and it requires life insurance.

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Save your dollars for college and complete your education without falling in debt

Posted on January 3, 2013 by James Garfinkel

As the college costs are spiraling out of control and the debt obligations in the households are also increasing at the same time, there are a large number of students who are not being able to complete their college education due to lack of cash. The parents of the college-goers are not being able to make ends meet with the meager amount of money that they make in a month. If you too are going through such a plight, you need not worry as there are ways in which you can save for college and get out of debt in case you incur it. Debt can mar the growth of a company and of an individual and being a student you should always keep debts at bay so that you don’t hurt your credit score in the long run.

Here are some tips that you may follow in order to save enough dollars while in college.

Contribute money to the 529 college savings account: The 529 college savings plan is offered by the state government and they offer tax-free growth for the investments that may range from the cash equivalent accounts to the emerging stock funds. You don’t have to pay any kind of federal taxes on withdrawing the amount from this fund. There are even some states that offer tax deductions for the amount that you contribute to the 529 college savings plan.

Keep saving money in the bank: Don’t like a financially ignorant student and store your money under your mattresses. You should always have a nodding acquaintance with a bank and open a high-yield savings account so that you can not only save money but also make your money grow and multiply.

Stop using your credit cards: Being a student, you might tempted to use your credit cards while shopping but you should also remember that being a responsible citizen of the nation, you ought to think about the future of the economy. When the economy is already bleeding with student loan debt and escalating levels of credit card debt, you shouldn’t be an active contributor to this. Carry cash instead of credit so as to help yourself stay within your means.

Don’t miss the scholarships: The schools and colleges often offer scholarships to the meritorious students and you should always stay aware of such scholarships and remain aware of them so that you don’t miss them. Make sure you qualify for such scholarships so that you can get them with ease.

Keep saving in the retirement funds: The retirement funds are a very essential part of your financial planning and so you have to keep on saving money in your retirement funds. There are many seniors who rush to the professional debt relief companies in order to repay their student loan debt or their credit card debt that they incurred while they were in college. If you have a retirement fund, you can simply withdraw money and avoid being subject to hefty interest rates in the long run.

Therefore, if you’re someone who is wondering about the ways in which you can save for college, follow the above mentioned points. Evaluate the importance of money so that you can give utmost importance to it and use it with care. Avoid being a spendthrift while in college as this can keep you from saving your dollars.

About the Author

Andrew Jackson is a financial counselor associated with Oak View Law Group, APC now for over 4 years. He analyses people’s financial situations minutely and advises on different debt relief options available. He also helps people manage their budgets through free counseling.

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10 Long-Term Care Insurance Facts and Statistics

Posted on December 17, 2012 by James Garfinkel

Long-term care insurance covers long-term care services provided in a nursing home, at home, or in community-based settings, which Medicare, Medicare supplemental insurance (Medigap), and traditional health and disability insurance plans typically do not cover. Here are 10 facts you need to know about long-term care insurance:

A person reaching the age of 65 has a 70 percent chance of needing long-term care, either temporarily or for the remainder of their lives (Source: 2011 Medicare Handbook).

Between 2000 and 2040 the number of older adults with disabilities will more than double, increasing from about 10 million to 21 million (Source: 2009 Long Term Care Insurance Sourcebook published by American Association for Long-Term Care Insurance).

Approximately 12 million individuals currently receive care from more than 33,000 providers for causes including acute illness, long-term health conditions, permanent disability, or terminal illness (Source: National Association for Home Care & Hospice).

The lifetime probability of becoming disabled in at least two activities of daily living or being cognitively impaired is 68% for people age 65 and older (Source: AARP: Beyond 50 – A Report to the Nation on Independent Living and Disability, 2003).

By 2050, the number of individuals using paid long-term care services in any setting (e.g., at home, residential care such as assisted living, or skilled nursing facilities) will likely double from the 13 million using services in 2000, to 27 million people (Source: U.S. Department of Health and Human Services, and U.S. Department of Labor).

In 2009, annual expenditures for home health care were projected to be $72.2 billion (Source: Centers for Medicare & Medicaid Services, Office of the Actuary (March 2010).

59 percent of respondents think Medicare will pay for extended nursing home stay, but it doesn’t. Fifty-two percent incorrectly believe Medicare covers assisted living costs (Source: AARP, December 2006).

50 percent of long-term care is provided by paid, professional cargivers – not spouses of children (Source: Center for Retirement Research at Boston College).

The National Average for one year of nursing care is $75,000 and the projected annual cost of long-term care in 30 years is estimated to be $250,000 (Source: LTC Benefits Group Inc).

In 2007, the national average cost of nursing home care was about $181 per day (for a semi-private room) — not including therapies and medications (Source: National Clearinghouse for Long Term Care Information).

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An Introduction to Long-Term Care Insurance

Posted on November 28, 2012 by James Garfinkel

There is a high likelihood you will need long-term care services if you live beyond age 65. In fact, almost 70% of people over 65 need long-term care. You should consider individual long-term care insurance coverage if you are not employed, work for a company that doesn’t offer a plan, or are self-employed.

Many people are under the mistaken impression that Medicare pays for long-term care – it doesn’t. Paying for long-term care out of your income or savings can be very expensive, several hundreds of dollars a day or more is not uncommon.

Choosing a long-term care insurance policy requires smart shopping — coverage and costs vary widely by company and depend on the benefit levels you ultimately choose. Long term care goes beyond medical and nursing home care to include all the assistance you may one day need if you develop a chronic illness or disability that leaves you unable to care for yourself for an extended period of time. You can receive long-term care in a nursing home, assisted-living facility, or in the comfort and privacy of your own home.

Most long-term care insurance policies fall into one of two main categories. An indemnity or “per diem” policy pays up to a fixed benefit amount no matter what you spend on care. With an expense-incurred policy, you select the benefit amount when you purchase the policy and you are reimbursed for actual expenses for services you receive up to a fixed dollar amount per day, week, or month.

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How Much Life Insurance Do You Need?

Posted on October 11, 2012 by James Garfinkel

According to Nate Orr, a devoted father and husband from Colorado, “insurance is one of the most important gifts you can give to the people you love.”  I hear that sentiment from clients every single day and it why I believe very strongly in insurance as part of a broader financial strategy.

Many life insurance agents talk about life insurance in terms of need. When we discuss juvenile life insurance, we seldom discuss need – children do not have a life insurance need, but parents and grandparents recognize the tax-advantaged potential of life insurance that is enhanced by funding a life insurance policy early in a child’s life.

Married couples and parents typically seek to lower the risk that the death of one or both spouses would cause undue financial hardship on the surviving members of the family. The popularity and availability of term life insurance has made it possible to provide the protection your family needs at a price you can afford. How much life insurance do you need is a personal choice and there is no “one-size fits all” approach that works for every family.

Here is a brief checklist to help you consider one-time costs and monthly living expenses subtracted from your current assets so you can determine what level of coverage may be appropriate for you.

ONE TIME EXPENSES

• Final expenses (medical, funeral, estate taxes, legal costs)
• Mortgage payoff
• Debt repayment (credit cards, car loans, etc.)
• College costs times number of children

CURRENT MONTHLY LIVING EXPENSES

Consider the following monthly expenses and multiply by twelve to estimate your annual expenses.

• Rent/Mortgage payment
• Food
• Clothing
• Transportation
• Utilities
• Insurance premiums
• Health care
• Prescriptions
• Child care
• Dependent support
• Education (tuition, room/board, books)
• Charitable expenses
• Entertainment
• Vacations
• Travel
• Taxes

Multiply your annual living expenses by the number of years you estimate you will be incurring these expenses. Although certain expenses may decline over time (e.g., education) other expenses, such as health care and prescriptions may increase. Now that you have the total of annual expenses multiplied by years of need, it is time to consider your assets.

ASSETS

Add the following items together to determine your total assets:
• Spouse’s annual expenses times number of years he/she is expected to work
• Savings and expenses
• Pension and retirement plan assets
• Home equity
• Current life insurance

To help you determine the appropriate amount of life insurance protection, subtract your total assets from your one-time expenses and estimated annual living expenses multiplied by years of need.

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Child Life Insurance Grows Up

Posted on September 15, 2012 by James Garfinkel

My passion has always been integrating financial, insurance, tax and estate planning strategies to conserve, grow and transfer wealth. Historically, the image of juvenile life insurance or child life insurance conjures up a morbid image of infant mortality and a low-cost, low-face value insurance policy intended to provide for final arrangements. You know the infomercial style marketing I am talking about – who can resist that cute little baby in the ads?

In my wealth advisory practice, we introduce the concept of juvenile life insurance — either whole life or universal life — to parents and grandparents as a multi generational financial planning tool. A parent or grandparent can own the policy or act as custodian for the insured minor. High net worth clients may decide to set up a trust. The fully-paid permanent life insurance policy can eventually be gifted to the child when he is an adult and has an insurance need of his or her own. The ultimate beneficiaries of the policy would typically be the grandchildren or great-grandchildren of the parent or grandparent who starts funding the policy.
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Posted in Child Life Insurance, College Planning, College Savings, Insurance, Juvenile Life Insurance, Life Insurance | Tagged , , , , , , | 4 Comments

Can You Afford to Not Buy Life Insurance

Posted on September 1, 2012 by James Garfinkel

I have been in the financial services industry for over 30 years, I have focused on life insurance solutions for individuals and families for much of that time. During this difficult time for our economy, when many people are struggling to pay their mortgage and credit card bills, a frequent complaint I hear is: “I can’t afford to buy life insurance.”

I want to turn the question around for a moment and ask: “Can you afford to not buy life insurance?”

I recently read this amazing story about Brian Rattner, an attorney living in Westchester who has a special needs child and .  Brian Rattner and his wife planned a Bar Mitzvah for their child and celebrated his coming of age (in the Jewish tradition) with friends and family.  It is a reminder that life insurance is for the living and when we are blessed with family who depend on us, financially and emotionally, and it is our responsibility to make sure they are protected.

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Posted in Child Life Insurance, College Planning, College Savings, Insurance, Life Insurance, Saving Money | Tagged , , , | 1 Comment