Retirement is One Thing that Married Couples Should Do Separately

Married couples do a lot of things together, including purchasing life insurance policies, going on vacation, buying homes and more. However, retirement isn’t one of the things that couples should do at the same time. It can have a significant impact on the household budget, and that’s why it is best when couples choose to stagger their retirement.

The Emotional Effect

First and foremost, before even considering all of the financial implications of retirement, it is important to understand the effect it can have emotionally. Many people have established senses of identity through their employers, and giving up a career that they’ve had for a number of years can really take a toll. Retirees often need some time to reestablish themselves in the world through hobbies, groups and the like. Couples who retire at the same time are faced with these issues together, and this means that they won’t be able to support each other to the best of their abilities.

Financial Implications

For many married couples, it is best for the primary breadwinner to continue working for about five years after the retirement age of 65. This has two primary effects on retirement savings. First, considering that someone earns an average of $50,000 per year during these five years and places 15% of that income in his or her retirement account, this means that an additional $7500 a year for five years or $37,500. Lastly, that retirement income won’t be touched for the entire five years. This means that the couple will have more money to live on annually once they have both retired.

Health Insurance

If one individual – or perhaps even both – has healthcare that is provided through his or her employer, then there are even more savings to be realized by waiting another five years to retire. One of these individuals won’t be required to purchase insurance that is supplemental to Medicare, and chances are that this individual will also have a life insurance policy integrated into their benefits package. By waiting five years to take over these expenses, thousands of dollars can be saved. After retirement, affordable policies are available at http://www.cheapinsurancefl.com/types-of-insurance/. With just a bit of information, you can get a comprehensive quote for all of your insurance needs.

Existing Obligations

While many people manage to pay off their mortgages, cars and other major expenses prior to retirement, there are an equal number of people who do not. In fact, it is becoming increasingly common to find people who have been retired for as many as five years and who are still making monthly mortgage payments. In this case, it may be in your best interest to see about having the remainder of your loan refinanced so that monthly payments are smaller. Of course, if you can afford the payments as they are, then this is acceptable as well since your loan will be repaid more quickly.

Overall, retirement is a very important phase in life and one that kicks off what are known by many as their best years. Traveling, socializing, and all-around fun should be the focus of these years, and there is no better way for married couples to do that than to stagger their retirement. 

Five Things to Do Before You Retire

Retirement is an exciting prospect for many people, but seldom does anyone truly prepare for their golden years. The following five tips will help you ensure that you are ready to say goodbye to the workplace and hello to the best years of your life.

Decide How Much Health Insurance to Buy       

In the event that you’ve had health insurance through your employer, there’s a chance that you may be able to continue it after your retirement. However, if this isn’t an option or if it will be too expensive for you to continue under the same plan, then you might need to seek out other options. You’ll be eligible for Medicare at age 65 but, for many people, this coverage is simply not enough. You should weigh your options, consider your current state of health, and purchase a plan that won’t break your budget.

Create a Last Will and Testament

This can be a difficult prospect for some people, but it’s something that needs to be done nonetheless. Here, you’ll want to consider how much life insurance you have (and you’ll also want to purchase some if you haven’t yet) and how it will be divided among your family and loved ones after your death. You will also want to declare how your physical property – including any real estate you own – should be handled. Finally, make sure that you include a ‘living will’ which is a declaration regarding whether you want life support or even CPR in the event of a medical issue.

Finish Paying On Your Mortgage

More than likely, your mortgage (if you have one) is your biggest expense. You’ll want to make sure that you’ve paid this off, and if you can’t pay it off altogether, you can also look into refinancing so that you can receive a lower monthly payment. Another option is the reverse mortgage, but this is something that many people don’t fully understand. After your death, if you are the only person living in that home and the only name on the title, then your home will be possessed by the bank that provided the loan.

Check Pensions and 401(k) Plans

A lot of people rely on their pensions and their 401(k) savings after retirement, but few people actually understand how much they’ve saved or what will be provided to them. If you’re considering early retirement, keep in mind that your pension is likely to change drastically. Similarly, in the event that you attempt to withdraw funds from your 401(k) plan early, you’ll be penalized for that, as well.

Host a ‘Trial’

Once you’ve gotten all of your affairs in order, one of the best ways to make sure that you’re prepared for your retirement is to live as if it’s already occurred for a period of two to three months. Stick to your budget and your plan, and if something seems amiss, make an adjustment. This way, you’ll know exactly what you can expect and exactly what you’ll need to do to get there.

Preparing for retirement is a task that takes decades to perfect, but even if you’re behind in the process there are still some things you can do. Considering your insurance policies, pensions and more will not only help you live comfortably, but it will ensure that your loved ones will be cared for after your passing. 

Disaster Scams and How to Avoid Them

As if being involved in a disaster like a fire, hurricane or tornado were not enough, there are people out there waiting to prey on those who have fallen victim. The following disaster scams have been reported nationally with some of the most recent coming in the wake of hurricane Sandy.

Why Victims Fall Prey

Think about this: when someone is involved in a disaster like the ones mentioned above, the first thing they think is that they need help – and they need it fast. Oftentimes, these people are so upset that they don’t take the time to check the qualifications of the companies who offer their help. As such, there are instances of ‘fake’ construction companies and cleaning crews accepting checks for work that they never intend to perform, cases of identity theft, and even false charities claiming to take up funds from people who weren’t even involved in the disaster. This turns the common consumer into a victim, as well.

Identity Theft

After a major disaster, a group called FEMA, or the Federal Emergency Management Agency, often takes information from those affected in order to provide relief funds and other aid. Con artists will often go door-to-door claiming to work for FEMA in order to gather your personal information for a purpose that is much more sinister. Please keep in mind that following a disaster, FEMA agents will never come to you and ask you for your information. You must contact them directly through an authorized telephone number or website.

Fake Charities

Following a disaster or crisis, crooks will often set up fake charities and promise that all of the proceeds collected will go to the victims. In all actuality, the only place those funds go is right into the pockets of the con artist. Before donating any sum of money to any charity – whether it is $5 or $500 – please be sure that you research it thoroughly. Never simply assume that someone is working for the Red Cross just because they say so; rather, take the time to do your research. Should you choose to donate to the Red Cross, you can do so through their website or by calling their official toll-free number.

False Victims

In contrast to the fake charity scam, there are some folks who will pretend to be victims of a disaster in which they were never even involved. People have gone so far as to say that their husbands, wives or children were killed although they never even existed in the first place. Although these stories may tug on your heartstrings, it’s important to remember that con artists are out there. It is better to donate to legitimate charities or even work directly with someone you know personally if they were affected by the disaster in any way.

While many of us don’t want to believe that someone could be cruel and heartless enough to take advantage of a disaster-ravaged community, it certainly can and does happen. Protecting yourself against these scams is the absolute best thing you can do to protect yourself. 

Teenage Drivers and Parental Liability

If you have one or more teenage drivers in your household, then it is important for you to understand your potential financial and legal liabilities in the event that he or she is at fault in an auto accident. Parental liability is a serious issue that everyone should understand prior to allowing a child onto the roadway with other drivers.

Are You ‘Off the Hook’?

One of the biggest mistakes that the parents of new drivers make involves buying the teen a car, putting the car in the teen’s name, and then allowing the child to purchase his or her own insurance. At this point, the parents often truly believe that they are off the hook in the event that their children are involved in accidents that are determined to be their fault. However, this is absolutely not the case. Children who are not yet 18 years old are not legally capable of accepting such liability and this means that the liability falls back on the parents.

A Frightening Example

Ethan Couch, a teenager living in Texas, made national headlines when a drunken crash killed four people. His defense was that he was suffering from ‘affluenza’, or a condition in which it is claimed that wealthy children are prone to feelings of isolation, depression and guilt. Couch claimed that the affluenza led to his drinking and therefore the crash. The judge in the case agreed with the defense and the teen was officially off the hook, but the attention then turned to the parents who were charged with negligence. In fact, they are involved in no less than five civil suits due to incidents involving negligence in the supervision and care of their son.

How Does This Happen?

If your child is involved in an accident in which someone is hurt or killed, the victims do have the right to file a suit claiming negligence. However, in order for you to actually be charged, certain factors have to exist. For example, if your child has received several speeding tickets and is involved in an accident because he or she is driving at a high rate of speed, then a judge could very well rule that you ‘should have known’ such an accident was imminent. The same can be said if you make both alcohol and car keys accessible to a teenage driver.

What Should You Do?

If you’re wondering whether or not you should even let your kid out of the house with the car keys at this point, rest assured that there are some things you can do to protect your child and yourself. First and foremost, it is your duty as the head of household to determine whether or not your child is fit to drive. If he or she has shown serious lack of responsibility or negligence in the past, handing over the keys may not be such a good idea after all. It is up to you as the parent to make the final decision and exercise your best judgment before allowing your child onto the roadways.

Of course, it is also important to discuss your parental liability with your child prior to allowing him or her to drive. This can be incorporated into conversations about texting behind the wheel, drinking and driving, or any other issue that is a concern. 

Accelerated Benefit Riders for Life Insurance Policies

If you have a life insurance policy but you’re concerned about what might happen if you are diagnosed with a chronic or critical illness that involves long-term care, then an accelerated benefit rider may be a great option. Essentially, it may allow you to access your death benefit prematurely in the event of situations like these.

How it Works

There are several things that are used to determine whether or not an accelerated benefit rider is a good option. For instance, with some companies, these benefits are included in every life insurance policy at no additional cost. In others, it must be an addition to the original policy, but it doesn’t cost much annually. Then, if the policyholder becomes ill and needs long-term care, a portion of his or her death benefit will be paid out prematurely in an effort to help cover the costs.

Receiving the Benefits

Individuals cannot simply contact their life insurance providers on their own and request a partial payment of their benefits. In most cases, a notification of a terminal or severe chronic illness must be sent to the insurance company by a licensed, practicing physician. At this point, the insured may be asked to undergo some further tests performed by doctors that work for the insurance company directly. Once it has been determined that there is a serious illness, a portion of the benefits will be provided to the insured.

Conditions and Maximum Payments 

The portion of the value of the policy that can be paid out prematurely depends upon several factors, but the one with the most influence is the insured’s overall life expectancy. Many insurance companies will not put the rider into action unless a physician has stated that the insured has a life expectancy of between six and 12 months. Then, a portion that is a minimum of 25% and a maximum of 75% of the overall benefit can be paid early to help cover the costs of medications, medical bills and even hospice care. Most of the time, the maximums allowable are between $250,000 and $500,000.

Things to Consider

Before making use of an accelerated benefit rider, policyholders and their families should be aware that any amount that is provided to them prematurely will be treated like a whole life insurance policy loan. The amount will be subject to fees and any interest that accrues up until the time of the insured’s death. It is also important to consider that different insurers have different terms and conditions associated with these riders, so those who are considering them should take the time to shop around for the best overall value.

An accelerated benefits rider can help you if you are diagnosed with a terminal or chronic illness at some point in your life. While it is better to be prepared than to face such a financial crisis alone, there is always the possibility that you will never need to use the rider and that your family will receive your death benefit in its entirety. 

Using Facebook to Gather Information about Auto Insurance Claims

In today's day and age, Facebook has become a way of life. It is estimated that for everyone in the United States with internet access, more than 80% have a Facebook account. However, consumers are increasingly concerned because they believe that their insurance companies may be using their private Facebook posts to investigate claims. Can this really happen? The answer is maybe, and here's how:

Using Social Media for Your Protection 

One of the reasons why insurance companies are beginning to turn to social media sites like Facebook is because people often have more vivid memories of an accident immediately after it happens rather than several days or weeks down the road. Experts in the field now claim that it is wise to take photos of the scene and upload them to Facebook along with a detailed (although respectful) account of what occurred. This way, in the event that there is ever any dispute later, the information is readily available for you to pull up and show to your agent. Insurance companies are almost twice as likely to check your social media sites if you have reported an accident-related injury, too. 

How Some Claims Are Denied 

However, there's another side to this story to consider, as well. Adjusters and agents will often look for the Facebook pages of individuals who have claimed bodily injury in an accident claim filed with their companies to see whether or not the claims are fraudulent. If someone says that they are unable to walk without significant pain due to the accident yet they post pictures of themselves golfing, skiing or performing other activities, then there is a very good chance that the claim will be denied because it was obviously fraudulent in nature. This mining is typically performed by special investigation units working for the insurance company, though third party investigators are sometimes hired, as well. 

Is This Legal?

Mining for information related to automobile accident claims is perfectly legal as long as the information gathered is part of a public profile. This means that if you have your account set to private and only people you have chosen to be 'friends' with can see your information, then they cannot breach that privacy in order to gain access to your information without breaking the law. However, an insurance adjuster absolutely can use information that is found on your friends' Facebook pages as long as they have permission from the account holder. Although some people complain that this is unethical, it is perfectly legal as long as your 'friends' give the okay. 

Protecting Yourself 

Of course, the best thing that you can possibly do to protect yourself in the event that you are involved in an accident is to avoid filing a fraudulent claim. With all of today's technology, you probably won't be able to get it past the specialists who know how to do their research. Other than this, if you are in an accident, you can post photos and an account of what happened for your own records. However, it is probably best if you avoid any statements or comments that could be considered disrespectful. The last thing that you can do to prevent unauthorized access to your personal information involves making sure that your Facebook account is set to 'private', keeping in mind that your profile picture and cover photo can still be viewed by anyone as if they were public. 

In a nutshell, while many consumers are upset and even angry that an insurance adjuster would access Facebook or other social media sites for the purpose of gathering information, if you play your cards right, this can only help you in the long run - if that person can even gain access to the information in the first place.

Understanding 'Catastrophic' Health Insurance

Because of the shape of the economy and the increasing costs of healthcare, there are many individuals and employers who are turning to High Deductible Healthcare Plans, also known as HDHPs or ‘catastrophic’ health insurance plans. Essentially, consumers who choose them will receive lower than average premiums with extremely high deductibles.

How it Works

Catastrophic health insurance plans aren’t like others in that most people actually end up paying for the majority of their healthcare-related expenses – including their prescription medications – out of pocket. Some of these have deductibles of $5000 or higher, meaning that even ER and urgent care visits won’t be covered until that deductible has been met. Even once the consumer has paid the $5000 out of pocket, only things like preventative care will be covered up to 100% under these plans. However, the healthcare reform laws that went into effect in 2014 now require insurance companies to pay for 100% of preventative care even before the deductible has been met.

Is It a Good Choice?

A catastrophic health care plan isn’t the best choice for everyone, though. People who are generally healthy may be able to get away with it since they’ll probably pay very little out of pocket. However, in the event that something terrible was to happen (such as a heart attack, stroke, cancer, etc.) then everything will be covered to an extent once the deductible has been met. This is how the policy got its name: it’s designed to provide ample coverage, but only in the event of a health-related catastrophe.

Choosing a Plan

While many people believe that these plans will only cover things like emergency room visits and hospital stays associated with sudden injuries or illnesses, this isn’t always the case. Many will pay for all healthcare related expenses once the deductible has been met, including any prescription medications or devices that may be part of a treatment plan. Individuals will likely have some co-pays associated with things that aren’t considered preventative, but these are generally 20% or less – much like other types of plans that are out there.

HSA Compatibility

An HSA, or a Healthcare Savings Account, was made possible by federal law back in 2004 and allows Americans to set aside a certain portion of their pre-taxed income to be used for healthcare expenses both now and in the future. In order for to be eligible for an HSA with a catastrophic health insurance plan, the deductible must be at least $1200 for an individual or $2400 for a family. Similarly, out of pocket maximums cannot exceed $5950 for an individual or $11,000 for a family. People who are younger than 55 can contribute as much as $3050 per year as an individual or $6150 as a family annually to an HSA; people who are 55 or older can contribute an additional $1000 per year individually.

Despite health care reform, it is anticipated that the catastrophic health insurance plans will continue to be popular among Americans. Some 10 million are currently insured under HDHPs, and that number is expected to climb as people purchase plans to avoid being penalized.