Chicks, Chat and Change!

Ann Zuraw, CFP®, CFA®, CDFA ™

 Tuesday • June 4th, 2013 5:30 – 7:00pm

Come join the conversation: “Financial Issues to Consider during Divorce”

Ann Zuraw @www.WomenMoneyandDivorce.com

Zuraw Financial Advisors, LLC

Comprehensive Financial Planning for the Planned and the Unexpected.

Individuals at Zuraw Financial Advisors LLC, are registered investment advisors. Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor, Member FINRA/SIPC

Women’s Resource Center of Greensboro • 628 Summit Ave. • Greensboro, NC •27405

(336) 275-6090        www.womenscentergso.org

Registration Required   •     Childcare not provided

It’s a decision most adults dread: having to take over the financial and day-to-day living decisions for parents who can no longer manage on their own. When caring for your parents, you may need to plan on three levels: managing finances, making health care decisions, and making sure their daily household needs are met. Finding qualified experts who can advise you in these areas may make it easier to manage the situation.

Managing Finances

If your parents currently are able to communicate, try to initiate a conversation about how they would like their money to be managed. Rather than telling them what to do, be clear that you would like to help and to make sure that their wishes are met. Access to bank and brokerage statements, insurance policies, and other financial documents may help you to safeguard your parents’ assets.

If your parents work with a financial advisor, try to arrange a joint meeting where all parties can review the situation. If you pay your parents’ bills and manage their checkbook, arranging for direct deposit of Social Security or pension benefits, as well as electronic delivery of recurring bills, could expedite the process.

Arranging for Health Care

If your parents are mentally competent, ask them about consulting a lawyer who can draft a health care proxy, a legal document designating you (or another person) to make decisions about medical care when they are no longer able to do so. If your parents have opinions about end-of-life care, their wishes can be incorporated into a living will, another legal document.

Even without these documents, the medical establishment is likely to look to you or other siblings to make decisions about health care, which could include arranging for long-term care or making end-of-life decisions. As part of this process, determine the type of medical insurance that your parents have and what it covers.

Overseeing Daily Living Activities

If your parents are able to remain in their home, you may need to consider helping them to manage medication, to conduct daily tasks such as bathing or meal preparation, and to make arrangements for assistance with household chores. A visiting nurse and home care agency may provide assistance in these areas.
You may want to consider consulting a Professional Geriatric Care Manager, a professional who may help arrange for home care, provide crisis intervention, and help you identify solutions to potential problems. You can learn more at www.caremanager.org.

Managing a parent’s affairs can be complicated, but arranging for support from qualified people may help you care for parents in a way that meets their needs and does not create too much stress on you.

Answers from AZ

© 2011 McGraw-Hill Financial Communications. All rights reserved.

Our culture has taught us that we need more and more belongings to live a comfortable life. The result is a large amount of clutter accompanied by a declining bank account. If all the clutter in your home is having a negative impact on your finances – You may wish to consider some positive reasons for living a clutter- free life.

• Removing clutter – may generate a more tranquil and healthier living environment.
• Eliminating items you no longer use – can help you see how unnecessary these purchases were, while teaching you to need less.
• Organization – this will become an easier task after all the unnecessary items have been removed. You should begin to find yourself living more efficiently.
• Increase home value – less clutter can help improve your chances of getting more value when selling your home.
• Increase income – have a garage sale or list unwanted items on eBay – put the profits into your savings or retirement account.
• Donate – this will give you an opportunity to help others and possibly give you a tax deduction.
• Create Storage Space – no longer incur a monthly fee for that extra storage unit.
• Downsize – with all the mess gone you may find you have more living space than you need. Consider moving to something more affordable and efficient.

By removing clutter, you can start to think more clearly and develop an energetic lifestyle. You may realize a new way of life which isn’t dependent on the purchase of new things, and can help you discover what is necessary and what is not. Organization and material limitations can help you understand that order is beneficial to your lifestyle as well as your financial health.

Early retirement is a phrase many Americans wish they could turn into a reality. While retiring in your 50s or early 60s sounds enticing, it typically requires years of planning to make sure you’ve accumulated enough retirement assets to last for 20 or 30 years or more. It’s important to factor in how an early retirement could affect your Social Security benefits, options for health insurance, and the nest egg you plan to rely on for ongoing living expenses.

Social Security and Medicare

Those who collect Social Security at age 62, the earliest age when most retirees are eligible, face a permanent reduction in benefits. For example, if your full retirement age is 66, collecting benefits at age 62 will result in a 25% reduction in the monthly benefit you would have received by retiring at 66.¹

Those born in 1960 or later will experience a permanent 30% benefit cut if they choose to begin collecting benefits at age 62 instead of their full retirement age of 67. In contrast, delaying benefits past full retirement age results in a higher benefit, with a maximum delayed retirement credit of 8% annually for those who were born in 1943 or later and wait until age 70 to retire.

Regardless of your age when you retire, Social Security is not likely to pay all of your living expenses. Social Security currently comprises 36% of the income of Americans aged 65 and older, with remaining income coming from employer-sponsored retirement plans, wages, and other sources.²

Finding health insurance is equally important if you plan to retire early. Eligibility for Medicare begins at age 65, and those who retire earlier typically must obtain health insurance on their own or through a former employer, which can cost thousands of dollars annually in premiums.

Saving and Budgeting

Early retirement typically requires a larger nest egg to finance living expenses over a longer period of time. Contributing as much as you can afford to qualified retirement accounts, such as an IRA or an employer-sponsored retirement plan, can help you build this nest egg.

Retiring early requires advance planning to make the situation work to your advantage. If you have the financial resources to do it, you may want to start the process at your earliest opportunity.

Answers from AZ

Thinking about the need and the costs of long-term care is enough to make anyone uncomfortable. But while it’s a difficult subject to talk about, it’s also a topic that often generates lots of questions and misunderstanding.

Consider this: The average cost of nursing home care in the United States now exceeds $87,000 per year, with wide-ranging variations from state to state.^*

Who Pays?

For the most part, those who need long-term care are left to foot the bill on their own. Neither Medicare, nor Medicare supplemental coverage (“Medigap”), nor standard health insurance policies cover long-term care unless you are impoverished. That’s why long-term care insurance is so important. Since premium costs are based on your age and health at the time of purchase, the younger and healthier you are when you purchase a policy, the lower the premium you’re apt to pay during the life of the plan.

As you evaluate long-term care insurance, keep the following variables in mind:

Coverage Parameters. Policies will differ in the types of services they support. Be sure to choose a policy that best meets your particular needs.

• Benefits Payout. How much does the policy pay per day for care in a particular setting? How does the policy pay out? (e.g., a fixed daily amount, as reimbursement for the cost of care up to a daily maximum?) Does the policy have a maximum lifetime limit?
• Eligibility. Does the policy use certain “triggers” to determine benefits eligibility, such as the formal diagnosis of an illness or disability? What is the maximum issue age for the policy?
• Women May Need More. Longer life spans for women may signal the need for additional coverage.

Finally, keep in mind that most long-term care policies sold today are federally tax qualified, which means premiums paid and out-of-pocket expenses are deductible. Also, long-term care benefits received are not taxed as income up to certain limits.

 Answers from AZ

 *Source: MetLife Market Survey of Nursing Home and Assisted Living Costs, 2011.

© 2012 S&P Capital IQ Financial Communications. All rights reserved.

WOMEN IN PHILANTHROPY

Featuring Keynote Speaker Dr. Maya Angelou

Join us! This luncheon is open to all who want to make a difference in our community.

May 14, 2013

11:30am – 1:00pm

Grandover Resort & Conference Center Registration Begins at 11:00am • Lunch Served Promptly at 11:30am Dr. Angelou’s newest book, Mom & Me & Mom, will be available for purchase Tickets $50 • Register Online at UnitedWayGSO.org/rsvp

United Way of Greater Greensboro

UnitedWayGSO.org

It’s important to understand the different asset classes and the role they may be able to play in your financial strategies. Many financial experts believe that asset allocation may be the single most important factor influencing long-term investment returns, regardless of short-term market fluctuations.¹ You could potentially lower your investment risk and increase your chances of meeting your investment goals by maintaining an asset allocation that includes several different types of assets.

What Is Asset Allocation?

Asset allocation refers to the mix of different types of investments, such as stocks, bonds, and cash. Because each type of asset has unique risk and return characteristics, the asset allocation an investor chooses is typically determined by that investor’s financial goals, time frame, and personal tolerance for investment risk.

Here’s a closer look at the risk and reward characteristics of the major asset classes.

• Stocks: Over the short term, stock investments typically carry a relatively high level of market risk, or the risk that an investment’s value will decrease. However, stocks have historically earned higher average annual returns than other asset classes over longer time periods. Although past performance is no guarantee of future results, stocks may have the potential to generate long-term returns that outpace inflation at the highest rate through the years.
• Bonds: In general, bond investments may be less likely to experience severe short-term price swings than stocks, and therefore may offer lower market risk. On the other hand, bonds’ overall inflation risk may be higher than that of stocks, because bonds’ long-term return potential may be lower. Inflation risk is the risk that an investment’s rate of return will not exceed the rate of inflation, effectively reducing the purchasing power of that investment over time. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price.
• Cash investments: Among the most stable of all asset classes in terms of returns, money market instruments generally carry very low market risk. At the same time, they don’t typically have the potential to outpace inflation by as wide a margin as stocks or bonds.

Your precise asset allocation needs may change throughout life, but your need for an appropriate asset allocation never goes away.

Answers from AZ

¹Asset allocation does not assure a profit or protect against a loss in a declining market.

© 2011 McGraw-Hill Financial Communications. All rights reserved.

If you’re like many Americans, struggling to stay out of debt,the sooner you get started paying down your debt the sooner you can achieve your financial goals.

 Here are some simple steps to help you get rid of Credit Card Debt.

• Start by avoiding continued charges at all cost!  If you can’t afford to purchase an item without a credit card, don’t buy it!
• If an emergency purchase is necessary, or you anticipate a large upcoming expense, you may wish to make plans for a home equity loan and not a credit card. This may allow for a lower interest rate, and the interest could be tax deductible.
• If possible consolidate your balances into one card with the lowest interest rate. If you can’t consolidate then start paying off the card with the highest interest rate, and double or if possible triple your montly payments until you eliminate your balance.
• Consider using money you may have in a low interest baring savings account to pay down high interest credit cards. For example, if your savings account is only paying 2% and the interest on your debt is 14% it makes sense to use savings to get rid of debt.
• Be commited to your credit card repayment; should you find unexpected income, like a tax refund Use it!  Any lump sum payments make a big difference in lowering your debt.

This process may take months or even years, but ridding yourself of debt is the first step to finding financial freedom today and more importanly your future.

Answers from AZ

Each generation seems to produce their own personality and style due to major events and trends during their life history. The Millennial’s, or Generation Y, has begun to create unique traits which include; self-expression, confidence, technological expertise, tattoo body parts and the aptitude to be open to change.

This Generation is becoming the most educated in American History. This trend is being motivated by the demands of a knowledge-based economy, as well as the elevated enrollment in graduate school by undergraduates that cannot find jobs. In spite of the limitations imposed on them due to the failing economy, many feel that they currently have enough money and that they will eventually meet their long-term financial goals.

Generation Y will be the first generation to be completely reliant on their own savings and investment skills. Having watched the previous generation struggle with debt has taught the Milllennial’s to recognize and avoid the dangers of living beyond their means.

Generation Y need not despair as they have time on their side.  For example, if at age 25 you manage to save $400 a month, annualized at 8 percent interest, you will accumulate a nest egg of approximately $2 million by age 70*. If you take advantage of an employer who offers a 401(k) matching contribution, your monthly payment to reach this goal would be less.

Seek expert guidance to help you understand how much risk you are willing to take with your savings as you start to accumulate funds for retirement. See the financial challenges of the future as an opportunity to learn from the past and gain rewards in your future.

Answers from AZ

*This is a hypothetical example and is not representative of any specific investment. Your results may vary.

Generation X is an expression used to describe the generation that succeeds the Baby Boomers. Born approximately between 1964 and 1980, Generation X are now largely in their 30’s and 40’s.

This generation grew up in a very different world than previous generations. Their new world included an era of rapidly emerging technology and political and institutional inefficiencies. This combination, along with dual working parents and a rise in divorce rates, have resulted in a generation of independent, resourceful and self-reliant adults. They are more ethnically diverse and better educated than the generation before them.

However, this self-sufficient group may have a long financial journey ahead of them before they can consider retirement. It is no shock that Generation X may not have the benefits of the previous generation. Long gone are the days of pensions, strong economic growth and the certainty of social security. This generation will also have to deal with longer life spans and higher medical bills.

Here are a few creative options to consider when planning your retirement future:

• Improve On Your Health – choose a healthy diet and exercise routine necessary to keep you fit in your later years. This may help save you on expensive medical bills and improve your quality of life.
• Reduce Expenses – by cutting unnecessary spending and increasing your savings which can provide you with financial freedom in later years.
• Start Saving Now – time is still on your side. Take advantage of compound interest and maximize your contributions to your 401(k) plan.
• Extend Working Years – this may help you avoid taking early distributions and draining your retirement accounts too soon.
• Get Expert Advice – a financial advisor can help you plan and make decisions based on you individual needs.

So Gen Xers, get started today using your resourcefulness and the take necessary steps to improve your rewarding and enjoyable financial future.

Answers from AZ