.....is so unnecessary.
This won't appear in any headlines but it should. Many spouses are forced to face life ahead of them with a lot of financial fear because the other spouse failed to protect his (mostly his) family with life insurance. I just became aware of a situation where this has happened recently. Picture the wife having to move from her home because the husband apparently didn't get around to paying the premium to prevent the policy from lapsing. He felt great at the time ---but died from cancer in about a year.
My goal in my business is to not let that happen wherever possible -- especially with my family and friends and those who I come in contact with in my business.
Tuesday, September 22, 2009
Monday, September 21, 2009
Why is Health Care so hard to fix?
I really can't figure out why this is so hard to fix. You have health care providers on the one side (hospitals, doctors, drug companies) and those who need the aformentioned services and products on the other side. In the US, connecting the two has become an all-consuming component that has apparently created the (very expensive) mess we are in.
This may sound like I think the problem can be solved with one organization in the middle (government) to parcel everything out between the two. And it is tempting to think about how clean that may appear. But after attending a Medicare sales meeting today and knowing how complex the government makes things, I think we should run from a government driven solution. Come on private sector, get going to fix this problem before its too late!!
This may sound like I think the problem can be solved with one organization in the middle (government) to parcel everything out between the two. And it is tempting to think about how clean that may appear. But after attending a Medicare sales meeting today and knowing how complex the government makes things, I think we should run from a government driven solution. Come on private sector, get going to fix this problem before its too late!!
Tuesday, September 15, 2009
Fixed Income Annuities
This is the second consecutive post on the investment side but I need to get this off my chest.
One thing that this last major market dip has shown me is the wisdom of having fixed income as a part of your investment portfolio. A great way to do this is to have an annuity that pays a monthly income for life no matter what the market does. Depending on your needs, the income from the annuity should match your minimum income needs that will not require major withdrawals from your equity portfolio during a downturn in the market. So a fixed income annuity of 30% of your total portfolio may be a good target for the annuity.
One thing that this last major market dip has shown me is the wisdom of having fixed income as a part of your investment portfolio. A great way to do this is to have an annuity that pays a monthly income for life no matter what the market does. Depending on your needs, the income from the annuity should match your minimum income needs that will not require major withdrawals from your equity portfolio during a downturn in the market. So a fixed income annuity of 30% of your total portfolio may be a good target for the annuity.
Investing in Gold
This blog is not one devoted to personal investing but it's hard not to comment on all those ads trying to get people to invest in gold. Certainly any commodity will bring the promise of returns if held and then sold during the right market cycle.
I remember when gold was around $600 an ounce back in 1980. So now it is up again. Which means if you had invested in gold back then it would have provided a return of less than 2% per year. This means if you had put a $100 in gold back then, today it would be worth about $180. By contrast, the Dow was in the 1,000 range back then. Today it is around 9,500 even with last years major bust. So a $100 in the market then would now be worth $9,500. And that doesn't even account for the dividends. Need I say more?
My belief is that investing in gold is a bet against America and it's future. It's saying that the dollar will continue to lose strength against gold and other commodities. If you believe that America is a goner, then investing in gold may be a good idea.
Also, where do you put all that gold you buy? If it is in certificates, then how confident can you be that it is backed up with real gold? If you bought the real coins, then how secure is your vault at home? (get ready for the vault ads)
I remember when gold was around $600 an ounce back in 1980. So now it is up again. Which means if you had invested in gold back then it would have provided a return of less than 2% per year. This means if you had put a $100 in gold back then, today it would be worth about $180. By contrast, the Dow was in the 1,000 range back then. Today it is around 9,500 even with last years major bust. So a $100 in the market then would now be worth $9,500. And that doesn't even account for the dividends. Need I say more?
My belief is that investing in gold is a bet against America and it's future. It's saying that the dollar will continue to lose strength against gold and other commodities. If you believe that America is a goner, then investing in gold may be a good idea.
Also, where do you put all that gold you buy? If it is in certificates, then how confident can you be that it is backed up with real gold? If you bought the real coins, then how secure is your vault at home? (get ready for the vault ads)
Sunday, August 2, 2009
Getting Health Care Revenge
The American Medical Association recently revealed that at least 25 cents of every health care dollar is spent on the treatment of diseases or disabilities that result from potentially changeable behaviors. Whether the cause is smoking, alcohol abuse, poor diet, lack of exercise, failure to use seat-belts, or overexposure to the sun, preventable health care costs are the first concern of many U.S. health care critics. I'm surprised it's that low.
So the best revenge against the health care system is to stay out of it. I once heard a person say that if you want to be successful then stop doing the things unsuccessful people do. Point: If you want to reduce your chances of needing medical care then stop doing the things that unhealthy people do. That is the best revenge.
So the best revenge against the health care system is to stay out of it. I once heard a person say that if you want to be successful then stop doing the things unsuccessful people do. Point: If you want to reduce your chances of needing medical care then stop doing the things that unhealthy people do. That is the best revenge.
Saturday, August 1, 2009
Squeezing more out of your IRA or 401 (k)
So last year you were arriving at retirement feeling pretty good about how things were shaping up. You were even searching the web for taking a European vacation to start things off.
Scratch that idea. Today you are still planning on retirement, but Europe will have to wait a few years, if you can go at all. Your portfolio is still down over 30% from last year and you and the spouse are cutting corners as much as possible to avoid drawing down from your retirement next egg.
Because of the bruising you took in the market, you have decided to put at least half your remaining 401 (k) retirement assets into an annuity. This way, at least there will be a lifetime income to cover some of the basic expenses. This could turn out to be a smart move. But there is one more wrinkle.
Annuities come in several forms. There is a straight life annuity that pays a lifetime income for just you for your life. When you die, that’s it. Most would agree it is not a good idea to risk your next egg like that. So you conclude that it would be best to take a reduced annuity in exchange for a guarantee of your annuity for both you and your spouse. This guarantee can take many forms. The most popular is a 50% joint and survivor annuity that pays one-half of your annuity to a surviving spouse for his or her lifetime. The net result is a “haircut” of your monthly annuity by about 15%.
But here is where you may be better off: Instead of taking the reduced annuity, consider purchasing a life insurance policy on your life payable to your spouse. Then, you elect to receive the highest payment form (straight life) while protecting your spouse with a less costly insurance policy.
There are at least two potential advantages to this approach:
1. The amount of reduction in the payment to guarantee the annuity for both you and your spouse will usually be more than the cost of a term insurance policy based on your life expectancy. At 65, for example, a 15 year level term policy would be about right.
2. If your spouse should predecease you, there is no need to continue the insurance at all unless it would be continued in a reduced form for last expenses or redirected to another beneficiary like family or the Rotary Foundation
The potential downside is if you are not in good health and the insurance policy must be rated substantially higher, wiping out the financial advantage. Other factors to consider are the age differences between you and your spouse, which can be a positive or negative, depending on the spread.
Planning your financial security is serious business. This enhanced annuity option may be a good thing to consider in your planning.
So last year you were arriving at retirement feeling pretty good about how things were shaping up. You were even searching the web for taking a European vacation to start things off.
Scratch that idea. Today you are still planning on retirement, but Europe will have to wait a few years, if you can go at all. Your portfolio is still down over 30% from last year and you and the spouse are cutting corners as much as possible to avoid drawing down from your retirement next egg.
Because of the bruising you took in the market, you have decided to put at least half your remaining 401 (k) retirement assets into an annuity. This way, at least there will be a lifetime income to cover some of the basic expenses. This could turn out to be a smart move. But there is one more wrinkle.
Annuities come in several forms. There is a straight life annuity that pays a lifetime income for just you for your life. When you die, that’s it. Most would agree it is not a good idea to risk your next egg like that. So you conclude that it would be best to take a reduced annuity in exchange for a guarantee of your annuity for both you and your spouse. This guarantee can take many forms. The most popular is a 50% joint and survivor annuity that pays one-half of your annuity to a surviving spouse for his or her lifetime. The net result is a “haircut” of your monthly annuity by about 15%.
But here is where you may be better off: Instead of taking the reduced annuity, consider purchasing a life insurance policy on your life payable to your spouse. Then, you elect to receive the highest payment form (straight life) while protecting your spouse with a less costly insurance policy.
There are at least two potential advantages to this approach:
1. The amount of reduction in the payment to guarantee the annuity for both you and your spouse will usually be more than the cost of a term insurance policy based on your life expectancy. At 65, for example, a 15 year level term policy would be about right.
2. If your spouse should predecease you, there is no need to continue the insurance at all unless it would be continued in a reduced form for last expenses or redirected to another beneficiary like family or the Rotary Foundation
The potential downside is if you are not in good health and the insurance policy must be rated substantially higher, wiping out the financial advantage. Other factors to consider are the age differences between you and your spouse, which can be a positive or negative, depending on the spread.
Planning your financial security is serious business. This enhanced annuity option may be a good thing to consider in your planning.
Monday, May 18, 2009
Announcement Letter
As you may know, I have spent virtually all my career working with large businesses and individuals in the area of financial security for employees and their families. With that background, I have concluded that helping to solve financial security problems for families and small business owners is where I should be spending my time in the future.
I wish it weren’t true, but in this society we are forced to depend on money for so much of what we do. My focus will be on helping you prepare for the financial problems and contingencies of life that can interfere with your goals, dreams, or just living life.
One thing which has been very important to me and my clients over the years is confidentiality. This is something I have always held as a priority. Another is trust, which is usually earned over time. I expect to earn your trust if you decide to seek my counsel.
Most issues I will be working on with you can be resolved with some form of insurance – life, health, and long term care insurance as well as annuities. I will be representing most all the top rated major insurers like Prudential, Genworth, Metropolitan, Equitable, General American, Transamerica, Aviva, and Blue Cross and Blue Shield of Minnesota.
I look forward to working with you.
Sincerely,
Madison J Groves
I wish it weren’t true, but in this society we are forced to depend on money for so much of what we do. My focus will be on helping you prepare for the financial problems and contingencies of life that can interfere with your goals, dreams, or just living life.
One thing which has been very important to me and my clients over the years is confidentiality. This is something I have always held as a priority. Another is trust, which is usually earned over time. I expect to earn your trust if you decide to seek my counsel.
Most issues I will be working on with you can be resolved with some form of insurance – life, health, and long term care insurance as well as annuities. I will be representing most all the top rated major insurers like Prudential, Genworth, Metropolitan, Equitable, General American, Transamerica, Aviva, and Blue Cross and Blue Shield of Minnesota.
I look forward to working with you.
Sincerely,
Madison J Groves
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