Wealth Design Group

April 2018: The Easter Bunny and Money

 

April 2018 Newsletter

The Easter Bunny and Money

By Gary Pevey

Let’s take a moment and talk about money and Easter. It’s a BIG donation week for U.S. Churches for one thing. Statistically speaking, our Easter-related spending will be $18.2 billion as a country. As individuals, we will spend an average of $150! Candy alone will take $2.6 billion and $2.9 billion will go towards other gifts. Most of the balance will be spent on Easter food/dinners and clothes, so we look our Sunday best.

Now, let’s dig in a little – can you guess what the most popular purchases are for Easter baskets? 89% is chocolate (bunnies and eggs) followed by 79% stuffed animals and it goes down from there. How many chocolate bunnies get made worldwide each year? 90 million.

Suffice it to say, we’re spending a lot of money for candy and other goods that get finished off and forgotten pretty darned quick. Might it be better to save money and give personal finance lessons to kids (and maybe even some of us adults)? I’m not asking you to skip buying candy and baskets. Heck no. All I’m saying is there are life-shifting financial alternatives to jellybeans and chocolates.

That education is what my YouTube channel is all about. And I’m always interested in sitting down for a chat about your financial future. Building financial freedom is what I do.

Enjoy our 10 sweet thoughts about Money below.

  1. What is wrong with this picture?  Are you planning for the steep increases in Medicare Part B?

Sources: Social Security Administration, cost-of-living adjustments, January 1986-January2015.

Centers for Medicare and Medicaid Services, Part B Premiums January 1986-January 2015.

2. Be leery of the Danger Zone when it applies to your Money! This is the area in our lives that last about 12 years - 6 years before retirement and 6 years after retirement.  You are transitioning from accumulation to distribution. This is the zone where an Accelerated Loss of Capital (ALOC) could occur either through changes in the marketplace or some other unexpected financial event.  It could force you to spend-down your money much sooner than anticipated.

3. It is important to know the decisions you make in the Danger Zone might last a lifetime. So get it right the first time.  Secure an advisor that understands and can help you implement strategies for this crucial time.

4.  Do you want to find out more about the new tax law changes?  The IRS has new web resources that are updated regularly.  Visit www.irs.gov/tax-reform for details.

5.  The five most commonly asked questions on Social Security.

  • When should I take Social Security?
  • How important is it to consider my spouse and his or her Social Security benefits when I make my decision on when to take my benefits?
  • How will my Social Security be affected if I continue working when taking Social Security?
  • Should I consider my other assets and income when making my decision on when to take Social Security?
  • What are delayed credits and what do I need to know about the credits?

6.  Are you thinking about traveling outside the country?  It is important to read this before you make the trip. Most ACA plans limit international benefits to emergencies only, leaving travelers to pay great out-of-pocket expenses for most health concerns encountered on their travels. No matter their age, gender, socioeconomic status or citizenship, every U.S. resident traveling outside the United States needs a supplemental international major medical insurance policy.  

7.  Don't overlook the importance of including waiver of premium on your life insurance applications.  What is the Waiver of Premium rider?  This rider pays all life insurance premiums due if the insured person becomes disabled.  A waiver of premium rider is an optional benefit on many life insurance policies. If a total disability occurs, the policy premium charges will no longer be required to be paid, but the policy will remain in force for the length of the policy.  

8.  Always.

  • Always have enough cash in a side account to handle any unexpected event in case these events happen.
  • Always plan for the long term because you might be on this earth longer than you think.
  • Always remember that investment markets are like bobble heads - they fluctuate in value.  You will want to have options of alternative sources of income if the bobble head remains in the down position for any long period of time.

9.  Are you thinking about retiring and relocating?  You might want to consider moving to a state that has no state income tax.  It could improve your cash flow. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no income tax - for any residents. For retirees, in particular, that means no state income tax on Social Security benefits, withdrawals from IRAs and 401(k)s, and payouts from pensions. Federal income taxes still apply in all of these states.

10.  Tax season is an excellent time to review your beneficiaries on your life insurance, annuities, retirement plans, and other plans that have beneficiary designations. You have a free hand in naming your beneficiaries, but you should review your decisions at least once every two years.  Circumstances change. Both expected and unexpected events happen. To make sure your money goes where it is intended, frequent reviews are recommended. Do your payable-on-death accounts match your estate plan?

Sincerely,

Gary Pevey, CLU ChFC

Wealth Design Group

3445 American River Drive, Suite B Sacramento, CA 95864

(916) 480-0669

Gary@WealthDesignGroup.com

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The information provided by Wealth Design Group is intended for educational purposes only. This information is not intended as tax, legal, investment, or retirement advice or recommendations. You are always encouraged to seek your own advice from other legal and financial professionals.