NEW YORK — The insurance coverage sector is forecast to move to an underwriting reduction in 2022 following 4 many years of slim underwriting income as own lines reduction developments, specifically in automobile and property owners, weigh on comparatively greater professional sector overall performance, according to a panel talking Thursday in New York at the Insurance policies Data Institute’s Joint Market Forum.
Inflation has led to a common doubling of substitution charges for sectors such as automotive and housing, with material and labor shortages and provide-chain delays all part of the equation, according to Michel Léonard, main economist and facts scientist, head of the economics and analytics section, for the institute.
The ensuing raise in loss trends across the insurance plan business will swing the field to an underwriting decline with a projected merged ratio of about 105{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2022, this following hovering all-around 99{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and consequently reflecting a tiny underwriting income from 2018 by 2021, according to Dale Porfilio, main insurance coverage officer for the institute.
The industry’s combined ratio is then envisioned to enhance by way of the conclusion of the forecast period of time of 2024. “We do assume improvements by way of 2023 and 2034 coming back down in direction of 100{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a},” Mr. Porfilio stated.
“In the mixture, commercial lines are relatively outperforming own traces. That was the case in 2021 and we count on that to be the situation in 2022 and by our forecast period of 2024,” explained Jason Kurtz, principal and consulting actuary for actuarial specialist Milliman Inc.
There are additional “bright spots” in the business strains sector, Mr. Kurtz said, pointing to staff compensation, “which is now in 2022 closing in on eight yrs of underwriting achieve.”
Commercial assets marketplaces are experiencing content shortages of issues like steel, glass and copper, according to Mr. Leonard, and labor worries have extra very low-to-mid-double-digit proportion time increases to some jobs.
Nevertheless, the web put together ratio for commercial home marketplaces is forecast to be somewhere around 99.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2022, Mr. Kurtz mentioned, demonstrating a tiny underwriting financial gain in spite of losses tied to Hurricane Ian. The forecast for 2023 is around 94{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and 2024 92{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, with a caveat about the unfamiliar mother nature of functions these kinds of as Ian.
Business auto traces are forecast to eek out a compact underwriting income with a put together ratio of some 99{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in 2021, but will surrender floor in 2023 with a forecast ratio of 102{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} and in 2024 at 101{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, in accordance to Mr. Kurtz.
Paul Lavelle, head of U.S. countrywide accounts for Zurich North The us, who released the panel, mentioned that rapid inflation, debt crises and the expense of residing have changed technology and weather/environmental challenges as the top considerations in the govt belief survey that accompanies the Earth Financial Forum world risks report thanks out in January, on which both Zurich and Marsh Ltd. collaborate.
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An ATM installation at Artwork Basel Miami Seashore is exhibiting and ranking people’s financial institution balances.
Usually, authorities endorse keeping only a small aspect of your revenue in examining.
The relaxation should really go into price savings and investments depending on your hazard tolerance, timeline, and aims.
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An ATM set up at Artwork Basel Miami Seaside is exhibiting attendees’ bank account balances for every person to see.
Proven in a viral movie posted on Twitter by Joel Franco, the ATM is an art installation by Brooklyn-dependent group MSCHF that invites spectators to swipe their debit card, then displays their photo along with their balance, which is rated on a leaderboard. So far, a gentleman with $2.9 million is top rated of the leaderboard, stories Insider’s Pete Syme, although another person with $48,000 could not crack the best 20.
An ATM is typically made use of in conjunction with a examining account, which would indicate folks have tens of hundreds — even tens of millions — easily available. But what about the relaxation of us? How much are we supposed to have in our checking accounts?
A examining account should not hold all your income
A checking account is only one section of a smart banking setup. It serves as an middleman for your money: Your paycheck may be deposited there, your expenses will be paid from there, and it can be wherever you withdraw income. While it’s greater than preserving your income beneath your mattress, authorities usually never advise retaining all — or even shut to all — of your money in examining.
Economic planner Marci Bair of Bair Financial Planning in San Diego, California, formerly instructed Insider that everyone with a continual revenue must preserve “no much more than about two months of fees” in examining at any provided time. That is mainly because even though you want enough income in your account to address your month to month expenses, there’s greater chance for your funds to mature in other places, like in retirement accounts, brokerage accounts, CDs, or high-produce personal savings accounts.
See Insider’s picks for the best examining accounts »
How you choose which dollars goes in which is dependent on your targets, your timeline, and your risk tolerance. For occasion, you would spend retirement personal savings simply because you have many years to climate market fluctuations. But if you have to have the cash in the following 5 several years, you may well opt for superior-yield savings to keep it near at hand. Large-produce examining is an option, but even the significant-produce choice would not pay as a lot curiosity as savings (at present around 3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), CDs (currently about 4{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}), or the stock market (which has returned about 14{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} over the previous 10 several years).
And recall: You can have a number of accounts of any form. Particular finance specialist and author Tiffany Aliche formerly informed Insider that she suggests any one have four financial institution accounts for a minimal-effort, significant-reward budgeting system: two checking accounts, and two cost savings accounts. One checking account is for expenses, and the other is for investing through debit card. One particular financial savings account is for your emergency fund, and the second is for other goals. And that will not even contact investments.
So, back to Artwork Basel: Ought to you continue to keep $2.9 million in checking?
It is dependent on how significantly you’re expending a month.
Libby Kane, CFEI
Government Editor, Personal Finance Insider
Libby Kane, CFEI, is the Government Editor for Particular Finance Insider, Insider’s personal finance section that incorporates affiliate and commerce partnerships into the news, insights, and tips about revenue Insider readers already know and adore. She holds the Licensed Economic Education and learning Instructor (CFEI) certification issued by the Nationwide Financial Educators Council. For 2021 and 2022, she is a member of the Insider Committe, a cross-workforce aim group operating on earning Insider an even much better position to perform. Formerly at Insider, she oversaw teams including System, Professions, and Government Everyday living. Her team at Insider has tackled assignments which include: • Ladies of Signifies, a series about women getting handle of their finances • Inside the Racial Wealth Gap, an exploration of the will cause, effects, and possible options of the racial prosperity hole in the US (finalist, Drum Award, “Editorial Marketing campaign of the Year,” 2021) • Strings Connected, a collection of essays from people who have left insulated communities and how that journey influenced their relationship with income • Master Your Income, a yr-very long information for millennials on how to acquire handle of their finances (to start with runner up, Drum Award, “Very best Use of Social Media,” 2022) • The Street to Residence, a complete information to getting your initially home (silver award winner, Nationwide Affiliation of Genuine Estate Editors, “Ideal Multi-System Package deal or Sequence – True Estate,” 2022) Individual Finance Insider also fees, clarifies, and endorses monetary solutions and solutions, no matter if that’s the ideal journey credit history card, the ideal financial commitment apps, or the best owners insurance policies companies. Outdoors of individual finance, she’s prepared about all the things from why Chinese little ones are so excellent at math to the company of canines to challenging truths about adulthood. In September 2016, she aided start Insider Netherlands in Amsterdam. She’s normally fascinated in investigate, charts, and folks: new and interesting investigate, compelling charts and other visuals, and people today who are willing to share the details of their remarkable money accomplishments and methods. Just before becoming a member of the organization in March 2014, she was the associate editor at LearnVest, covering personalized and behavioral finance. If you have a thing to share, make sure you attain out to lkane@insider.com. Master more about how Personalized Finance Insider chooses, prices, and covers monetary products and solutions and providers » Sign up to get Personalized Finance Insider’s totally free e-mail e-newsletter in your inbox »
Task progress a little bit abated in November alongside climbing desire rates but mirrored much better-than-expected choosing momentum, even as problems of a recession expand.
The Labor Department launched the month-to-month employment report for November at 8:30 a.m. ET on Friday. Here are the highlights, as opposed to Wall Avenue estimates compiled by Bloomberg:
Non-farm payrolls: +263,000 vs. +200,000 envisioned
Unemployment charge: 3.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} vs. 3.7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} envisioned
Ordinary hourly earnings, thirty day period-above-month: +.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} vs.+.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} predicted
Typical hourly earnings, year-more than-year: +5.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} vs. +4.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} anticipated
October’s payroll examining was upwardly revised to 284,000 from 261,000 previously reported.
Employment numbers have moderated in latest months, but employers continue to seek the services of at a robust pace even as the Federal Reserve presses on with its most intense financial-tightening campaign in a long time to loosen an terribly restricted labor sector that has placed upward pressure on wages and contributed to stubborn inflation.
Average hourly earnings rose .6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in excess of the thirty day period, larger than the prior thirty day period and Wall Road expectations. On an annual basis, wages climbed at a larger-than expected 5.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}.
Inventory futures tumbled just after the report’s launch, as Wall Street digested the likely implications of the work conquer and more robust-than-predicted wage development.
“A much better-than-expected careers report illustrates the wage issue that the Federal Reserve is experiencing,” Impartial Advisor Alliance Chief Financial commitment Officer Chris Zaccarelli mentioned in an emailed be aware. “Common hourly earnings continue on to climb and that wage strain, in conjunction with low unemployment, will continue to keep inflationary pressures elevated.”
“For all those that imagine the Fed will be reducing prices upcoming calendar year, we would remind them that inflation was not transitory, and this employment report is a different example of why the Fed is heading to be fighting inflation for a substantially more time interval than numerous at the moment assume,” he extra.
The labor drive participation charge ticked down to 62.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} past thirty day period, 1.3{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} underneath its value in February 2020 right before the COVID pandemic started.
Friday’s figure efficiently serves as a indication to Fed policymakers to raise their benchmark coverage more into restrictive territory, even soon after messaging from Chair Jerome Powell this week that he and his colleagues may well moderate the pace and magnitude of individual hikes.
“Cost security is the accountability of the Federal Reserve and serves as the bedrock of our financial system,” Powell said, talking at the Brookings Institution in Washington D.C. on Wednesday. “In individual, with no selling price balance, we will not accomplish a sustained time period of solid labor industry disorders that reward all.”
At the sector degree in Friday’s report, the greatest gains were being seen throughout leisure and hospitality, well being treatment, and govt, while careers declined throughout retail and in transportation and warehousing.
Leisure and hospitality, one of the sectors most difficult strike by the pandemic, continued a strong restoration, with 88,000 positions added through the month, bringing the normal this calendar year to 82,000 regular work added. That figure, on the other hand, is 50 {1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of the ordinary get of 196,000 positions for every month in 2021, with unemployment in the sector at 980,000 — or 5.8{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} — under its pre-COVID level.
Positions throughout health care rose by 45,000, though govt observed a gain of 42,000 payrolls.
Meanwhile, the retail sector noticed 30,000 positions shed, with employment in the trade dropping by 62,000 because August. Transportation and warehousing employment fell by 15,000 in November and by 38,000 considering the fact that July.
Company America has also seen corporations announce layoffs in droves, specifically in the technological innovation sector, which has been grappling with sturdy overspending throughout the publish-pandemic growth.
“Layoffs in the tech sector have garnered a good deal of headlines in the last handful of months but this has not but translated into a demonstrably weaker labor picture,” Insight Financial investment Head of Worldwide Fixed Earnings, North America Brendan Murphy.
WASHINGTON, DC – NOVEMBER 30: Chair of the U.S. Federal Reserve Jerome Powell participates in a problem and solution session just after speaking at the Brookings Institution, November 30, 2022 in Washington, DC. Powell reviewed the financial outlook, inflation and the labor industry. (Photograph by Drew Angerer/Getty Pictures)
Treasury Secretary Janet Yellen, talking at the Dealbook Summit in New York Town on Wednesday, called the Labor Department’s regular employment report the most crucial info stage officers monitor, along with inflation numbers.
“We really don’t want to overshoot complete employment, and we do have an inflation dilemma,” Yellen mentioned. “So you can hope growth to slow, and it has slowed — we proceed to mature and have optimistic advancement, but it slowed significantly.”
Yellen argued also that layoff bulletins throughout tech have been an exception, citing “special factors” dealing with the sector, such as a slowing overall economy, and declining advertisement profits.
“What you are viewing is some writing down of long term growth that is inducing corporations to rethink individuals they truly will need to use, so we have observed the beginnings of position openings fall off a very little little bit,” Yellen said. She emphasised that as the Fed attempts to minimize the amount of position openings, she didn’t think significant layoffs had been important to do so.
—
Alexandra Semenova is a reporter for Yahoo Finance. Observe her on Twitter @alexandraandnyc
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Bob Powell (00:03): All right. Welcome everyone to our Women, Divorce and Retirement webinar. I’d like to remind everyone that all attendees are muted and off video, but the event is being recorded. And if you have a question, please type it into the chat box at the bottom right of your screen. Panelists will, we’ll have panelists speak to their top items and cover questions as we go through the webinar today. And as a reminder, everyone will receive a link to the recording when it’s posted on retirement daily.
I’d like to take a moment to introduce our subject matter experts for today’s webinar. We have Rick Fingerman, who is the co-founder and managing partner of Financial Planning Solutions. We have Katie Marsden, who is a wealth advisor for Buckingham Strategic Wealth. And Amy Shepard who is a financial planner at Sensible Money. Welcome.
So, the order of business today is in essence to look at what happens now that your divorce is final. Where do you begin as you contemplate your new life as a divorced woman? And Katie, we’re going to start with you. You’ve developed a checklist that outlines the topics that divorcees need to address, including how assets in a house get divided. Where do you suggest that they begin?
Understand Your Goals
Katie Marsden (01:25): So, one of the best places to start is to really take a step back and what I like to call it is redesigning your future. What I mean by that is starting from scratch with really all of your financial plans to reassess what’s important with you and how maybe your goals have changed for the future. There’s likely been changes in your life, some big, some small changes around income sources, cash expenses, maybe where you live, how much assets you have towards retirement. There’s been quite a bit of changes. I recommend people really just take a step back and start with the basics of putting together a new plan and focusing on what their goals are.
Katie Marsden
So, kind of thinking through what do you want your financial future to look like? Have your goals changed; your aspirations changed? Has your timeline, maybe, for retirement or other things changed? And then taking a look and figuring out, okay, what do we need to change as far as your finances go to support those goals? And not everybody’s ready to do this on day one, but the idea is to get you start starting to think about how some of these changes in your life should change your overall plans.
Bob: You mentioned goals-based planning. Why is that important?
Katie: It’s important because it is really focused on you as an individual and what you’re trying to accomplish, rather than just focusing on a return figure. Other things, it’s to make sure that your needs are met as an individual and that you get where you’re trying to go at the end of the day.
Bob: In terms of cash flow, two things that probably might be different than they were before you were divorced is the notion of having child support and alimony. Is that something that people need to weigh into their plans as they think about their basics?
Katie: And it varies so widely from every individual. So, cash flow in general has likely changed a lot going from possibly one income to two or two incomes to one or one to having just support payments. So, starting a really close look at your cash flow, where is the money going, what expenses do you have? That is a great place to start just to reassess everything and see how it fits in with your plans.
Bob: Amy, Rick, anything to add to that?
Amy Shepard: I would just always echo what Katie says. I think just having your goals figured out, knowing what’s important to you, if you know that it makes it a lot easier to start tackling all the financial pieces and working through a checklist that probably does seem overwhelming.
Amy Shepard
So, I think it does help give some clarity when you can take a step back and just think about what’s really important and what do you want to accomplish with your own life.
Rick Fingerman: Yes, exactly. I think those points are right on, because when you’re in a relationship, your goals might be very different than your partner’s goals.
Rick Fingerman
So now it’s your opportunity to really put a plan in place that gets you where you want to be. Having that checklist and having someone to work with, especially to work you through the process is really key.
Manage Your Risk – Insurance
Bob (04:47): So, one of my favorite topics is risk management. And Amy, obviously when someone is newly divorced, they have to revisit all the possible insurance needs that they might have, whether it’s health insurance, property and casualty, disability insurance, life insurance, et cetera. Walk us through what folks need to know.
Amy: There’s a lot here, so there’s a lot to look through, but some of the big ones that I’ve seen frequently, health insurance could be a big factor for a lot of people. If you are on a spouse’s group plan and maybe now, you’re not able to be.
Or I have seen instances where folks are already retired and there’s some setup where even though now, you’re divorced, you can stay on an ex-spouse’s insurance for a period of time if it’s to get you to Medicare age or something like that. So, health insurance is important whether or not you figured it out before the divorce was final or after the fact.
There’re so many options out there and we all know health insurance does not get cheaper, it’s only more expensive as time goes on. And so just taking the time to figure out what’s the best coverage, whether it is an option that somebody might have to go through their own employer, or if you’re not working, what are your options? That can be overwhelming. So just taking the time to figure out and making sure that basic need is covered, that you have health insurance in place. That’s a really big one.
Another one is life insurance. And so going back to what Katie said about the goals, depending on what your goals are, your insurance needs may have changed if your goals have changed. A lot of times we get life insurance to help cover our financial contribution to our marriage, but if we’re no longer married, we may not have the same need for life insurance. Or maybe the numbers still support needing the life insurance, but we have to make sure we go through the steps of updating beneficiaries. Maybe we don’t want an ex-spouse listed as the beneficiary anymore. So that’s an important thing to go through.
And I think it’s a two-part consideration: One, do you still need life insurance and two, if you do, how do you structure it so it matches your goals? Make sure that any proceeds go where you want them to.
I think for a lot of people, especially with children, maybe they change it from an ex-spouse to their kids or if they have a trust set up or something like that, you just, again, want to tie it back to what your goals are.
Another really important thing, I think, that divorced or otherwise, [another] insurance consideration is long-term disability. It’s something that doesn’t get enough attention, but it is important at any stage in your life. But it’s another really important thing to look at when your whole financial and emotional life changes after a divorce.
So, long-term disability insurance is really important if you are still working and maybe your timeline has changed for when you expected to retire. If there’s still a lot of working years ahead of you that are needed to make your goals a reality, having long-term disability insurance is really important because it essentially protects your income. And so, if you have an unfortunate event, like something as, I’m going to say minor, as maybe a car accident that you can recover from, but it takes you out of work for a period of time, to something more serious like cancer or some other illness, that it does affect people well before we want to think that it does.
We tend to think that all that stuff really happens when we’re really old, but that’s not the case. And I think just again, having the risk management in place to make sure that whatever the goals are that you first identified, that you are supporting them even as life continues to throw curve balls, because I’m sure divorce is one big one, but they’re, they’re always around every corner. I think those are some of the really important insurance considerations to look at.
Bob (08:44): Insurance is never quite frankly, the most exciting of topics to talk about, but it’s certainly one of the most elemental blocking and tackling aspects of a financial plan. Katie, Rick, any additional thoughts?
Katie: Two things that came to mind for me. One was just know when your COBRA, if you have COBRA insurance, know when it expires so you could start planning for it well before the coverage ends.
And just one other thing that came to mind was for some of the clients that I work with who have been out of the workforce, [they] have found since their health insurance is such a large expense that if they are able to find work that they enjoy doing and can have that cover for a period of time, if they’re below Medicare age, that it can be a big sigh of relief from an expense perspective. So that’s just something to think about how it can help the bottom line by getting that coverage through an employer.
Bob: And in cases where someone may have to use ACA, there’s also the possibility depending on their income of receiving advanced premium credits as well.
Katie: Correct. Correct.
Bob: Right. Rick, at any additional thoughts?
Rick: Yes, I mean, just a few things I’ve seen in the years I’ve been doing this, sometimes on homeowner policies, you might have a rider for boats or other types of things that might not be in your picture anymore. Maybe the ex-spouse has that, or maybe that car is still on your auto policy, things like that. But it’s a good chance to sit down with your agent and really look at things like deductibles, see if there’s any gaps in coverage, make sure you have an umbrella policy, which is just a liability policy over and above any kind of liability that you have on your car, because we live in a litigious society and if you happen to hit someone with your car or they fall down your stairs, you want to be protected that way.
Rick Fingerman
And then lastly, one thing I’ve seen is where the divorce decree might have said that life insurance was supposed to be kept for a spouse for a number of years. So, you want to be careful of changing beneficiaries, which I totally agree with because I’ve seen more mess up with people that just never change a beneficiary, whether it’s life insurance, whether it’s a 401(k) plan, and that exposure is still on there and it can cause real problems later on. So just want to be mindful of all those things. As you pointed out, insurance isn’t always the most riveting topic, but it is a really important one to look at.
Saving & Investing Now That Your Single
Bob (11:07): So, Rick, divorced women still need to save and invest for many goals, retirement included. What do divorced women need to know about this topic?
Rick: Well, when you are a married couple, generally speaking, one person hopefully at least is saving towards retirement. If they’re both in the workforce, hopefully you’re both saving. And then when you split up, in theory, some expenses go away, but two people can live cheaper than one usually. And so, it’s important to have, again, that comprehensive financial plan to figure out what your expenses are going to look like in retirement and then back into how much money do I need to fund my life once those paychecks stop, whether it’s support of some kind or money from a job. Once those paycheck stops, you have to rely on other forms like Social Security or maybe a pension or investments and earnings and things like that.
I think it’s really important to get a handle on that first, and then you can back in and say, I need to save X for a number of years, and then just stick to that plan and adjust as time goes on. And if you’re working with a financial, certified financial planner, for an example, hopefully they will keep you on track and make any adjustments that are needed over the years.
Bob (12:22): There’s also, I think, Rick, this notion of one’s risk tolerance may be different going forward as a divorced spouse versus when they were a couple.
Rick: Absolutely. I don’t like to stereotype or generalize, but I will. Because in my experience, women tend to be more logical thinking when it comes to risk tolerance and investing where some spouses might be much more aggressive and that might not be a good feeling for that, that divorce spouse. So, you really want to look at your risk tolerance, see what you’re comfortable with, and it might be a good opportunity to look at certain value-type investing, too. We have clients that want to invest in a certain way, whether that’s excluding certain things like tobacco and alcohol or fossil fuels and things like that. Or also be inclusive to try to invest in companies that might have more equal pay for everyone, those types of things. So, it’s a good time to really look at it as a new journey going forward for yourself versus how it might not have really fit you well as a couple.
Bob (13:30): You mentioned timelines and the need to reevaluate them. One thing that comes to mind is oftentimes women may leave the workforce during their childbearing years or may leave the workforce for one reason or another, and that impacts both their ability to save for retirement and impacts their Social Security benefits, et cetera. Amy or Katie, any thoughts about how timelines need to be adjusted given the possibility that women enter and exit and reenter the workforce?
Katie: In general, women tend to have less saved than men. They do studies showing the amount that women have saved and invested versus men. And in general, women have less saved, but for some of the reasons that you mentioned of not necessarily being in the workforce as long, but then on the flip side, women also are more likely to live longer than men. So, we have a little bit of a financial planning conundrum there, we have a little bit less to work with and a longer time horizon, in some cases. Of course, there’s always exceptions to every situation, but it’s something that is important to be mindful of and making sure that we’re including that as part of our plan and that we’re making the dollar stretch as long as they’ll, they’ll likely need to go,
Bob: Amy?
Amy: Yes, I always share when it comes to longevity, I have a great aunt who just recently passed away at 107 years old. And so yes, she is definitely one of the exceptions, but women do tend to live longer than men. And so yeah, Katie, you hit that the nail on the head there. It is really important. I think the only thing I would add is just that you don’t need to have a lot to make a solid financial plan. I think it can be really overwhelming when you go through a major life change like a divorce, and then you start thinking about your future and people naturally think about the dollars in the sense. But I have seen plenty of situations where I work with folks that never made a substantial amount of money, but they’ve been able to do just fine in retirement.
On the other hand, I’ve seen situations where people make more money than you could ever imagine, and they’re struggling to plan for their retirement. And I think the piece of advice I would give is just try not to worry too much. If you feel like you don’t have enough and sit down with somebody and really look over the numbers, go back to your goals and figure out if what you have is sufficient for you. If sometimes people are surprised to find out that by doing things like delaying Social Security can give them enough monthly income to cover the vast majority of their expenses. And that can be a relief even if there isn’t a ton of investment that have been accumulated. I think the takeaway is just there’s always options and it’s really important to explore them all.
Tax Planning
Bob (16:31): So, let’s turn our attention to income taxes. Divorced women are sometimes in for a surprise when they file as a single taxpayer when it comes to RMDs or collecting Social Security. Amy, what do our divorced audience need to know about income taxes?
Amy: Bob, the big thing like you mentioned, is not only has your life changed in so many ways, but your tax situation has also changed quite a bit because now you file taxes most likely as a single taxpayer instead of a married taxpayer, which has its own set of considerations. And so, when you add a lot of the things we’ve talked about, one being women live longer than men, statistically; women don’t have much saved, all of that. For a lot of divorced folks, there’s a kind of this surprise tax bomb waiting later in life. So, as you progress through your life, as you progress through retirement, if you do have pre-tax retirement accounts, at age 72, you have to start withdrawing from them. Well by 70, you’ve also started Social Security. And what I often see is that later in life, especially single taxpayers, they start to creep up into higher tax brackets later on where in the early years, whether it was when they were still working or after they’ve retired but before gotten into their seventies, sometimes there’s what we call the opportunity zone, where they have some lower tax years, they can do some long term tax planning to help reduce those future required distributions and reduce the amount of taxes they spend over their lifetime.
And so, it all comes back to the importance of having a financial plan. Looking long term and not getting so caught up in just the short term. There’s of course going to be really important short-term things that you have to tackle, but it’s really important to look at the big picture, look at what your goals are, and then map out what you expect your tax situation to look like over the next several decades. And then see what decisions you can make early on to help limit the amount that goes to taxes. And for a lot of people, not only do they like the idea of saving money on taxes, but it’s also really comforting to know that if you have a strong tax plan in place, it has the potential to give you more money to enjoy doing the things you want to do. And I think it’s just the long-term view is really important to just spend the time and look at it and make decisions based on the numbers, based on the numbers and your goals instead of just guessing on what might be the right choice.
Employer Benefits
Bob (19:07): So far, all that we’ve talked about does seem like quite a bit of work. Katie, any thoughts about income taxes and maybe making that topic less painful?
Katie: Two things that came to mind with that topic. One, Amy mentioned that most people have to, after a divorce is finalized, file as a single taxpayer. And just taking a look at if it was included in your documents, if you have children, if you can file as head of household, every little bit helps. And then the other piece of just who can use the children on their tax return for the child tax credits.
Another important thing, which I think we all kind of forget because you set it and forget it, but if you are working to take a look at your withholding and see how taxes have been withheld from your employer. And if going forward there is changes that you can make, so to touch base with the HR department of your company or your CPA to make sure that you’re not doing too much or too little because that can make a difference in our cash.
Bob: Rick, any additional thoughts?
Rick: Katie just brought up a good point about benefits at work made me think about could be opportunities there. Again, looking at that overall comprehensive financial plan, seeing if you’re on track for retirement, it might be a good opportunity to max out your 401(k) plan if that’s available at work. Maybe incorporate a flexible spending account that uses pre-tax dollars to pay for medical stuff like your kids might need braces or things like that. Or even a health savings account, an HSA, which is really a great vehicle, if you have a high deductible health plan, it might be a good fit for you.
I think, again, it sounds like this whole thing comes down to having a really good financial plan and someone to help you with all that. But yeah, the tax component can be huge. You know, filing single, Katie pointed out head of household would be a great thing to do if you’re eligible. And some people just don’t do that if they’re doing their taxes on their own especially. So yeah, I think again, look at everything that’s available.
Retirement and Social Security Planning
Bob (21:23): I’d like to remind everyone who’s attending the webinar that you can ask a question using the Q and A button at the bottom of your screen. We will be leaving more than sufficient amount of time to take questions from everyone here with our esteemed panelists.
So, I want to turn my attention to one of my favorite topics, retirement planning. Rick, from your perspective, what do folks need to know about Social Security, RMDs, QDROs divorce, spousal benefits, et cetera, joint and survivor pensions, et cetera?
Rick: Yes, all that good stuff. Well, we’ll start with Social Security. If you’re married for at least 10 years and you’re divorced, you’re entitled to a divorced benefit on your spouse. And generally, 50{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of their full retirement-age benefit. There are some caveats of when you actually start collecting. If you collect at 62 versus your full retirement age, your benefit is reduced. If you’re married, your spouse that you’re collecting on doesn’t, if you’re married, can be married. But if you are married, remarried, you can’t do that. But if they pass away and you remarried after age 60, there’s an opportunity to collect a hundred percent of what they were getting. So Social Security plan can be a big piece of that to see where it makes sense to collect, whether it’s your own work record or an ex-spouse’s record. When it comes to RMDs, I think Katie mentioned at 72, maybe it was Amy, I’m sorry, at 72 you have to start taking these required distributions and it’s a good opportunity.
Someone pointed out that there might be a window where your income is lower and maybe there’s some opportunity to during those low tax bracket years to do things like Roth conversions where you could limit the amount of those required distributions that you might need later on if it seems like you’re going to be in a higher tax bracket later. So, looking at all that I think really makes sense, too.
As far as QDROs, I’ve seen situations that QDROs, basically a qualified domestic relations order, and it’s generally around someone’s 401(k) or workplace plan to split that up between spouses, so it’s not a taxable event. So, you want to make sure that once the divorce is settled that the QDRO has not been, those assets haven’t been transferred, you want to make sure that that gets done properly. Because that I’ve seen cases where that sits around for five, six years and just never gets done and that’s not ideal.
The Value of the Checklist
Bob (23:51): What advice do you have around making sure that it does get done? Working with a planner, having a checklist in place?
Rick: Yes, absolutely. Working with a planner, having that post-divorce checklist to some, make sure nothing’s forgotten. The checklist I think is a great idea because it could be as simple as saying check beneficiaries, is the QDRO completed? There was one, was the house retitled, if you’re keeping the house, all those things are really important because it’s easy to forget this stuff even for us that do it every day. So, we really want to have some kind of checklist, check it off. I always feel good checking things off personally, I’ve even written things down just so I can check them off. But it’s a good feeling and I think the client feels good too, knowing that they’re making some progress.
Bob: Katie, I know you’re fond of checklists. Any additional thoughts on QDROs and Social Security and RMDs and retirement planning in general?
Katie: Yes, I make a checklist for everything. I would just echo a basic, what Amy was saying earlier, about not getting overwhelmed or feeling that you, maybe, aren’t exactly where you want to be at a certain point. Because the reality of a lot of divorces is that you had a pot of money that’s now split in two. And that regardless of how big or small that amount is, it can make people feel uneasy because you’re planning with a different amount than what you had been previously.
So, what I like to remind people is that in any retirement planning there’s always levers to pull. You can save more, spend less, work longer, it just depends on your priorities. So, before you get overwhelmed by looking at how the dollars have changed, also taking a look at how maybe some of your habits could be adjusted to where you can still end up in the same place. But just what levers can you pull? And for different people that’s a different answer. So just exploring those options and seeing how to get to a comfortable place with getting to retirement.
Bob: Amy?
More on Social Security
Amy: I think I just will emphasize the importance of the Social Security planning. Social Security is, like many of the topics we’re discussing a lot, a lot of rules, there’s a lot of nuances but there’s also a lot of benefit. And I think some people are often surprised when we put the numbers on paper to show how much value Social Security could provide over a lifetime. And then how that value can change, depending on if you start benefits earlier or later.
And, I think, just emphasize the importance again of just taking the time to work through these things carefully. A lot of the decisions that you make when it comes to retirement planning are one and done. You make the choice and you want to make the right one. And so, to make the right one and not regret a decision or make it hastily, I think it’s just really important to spend the time working through all the details.
Bob (26:52): I know when I talk to readers, they’re often surprised that they’re entitled to divorced spousal benefits or even a deceased beneficiary’s benefits. Do you find that to be the case in your practice that divorce women are sort taken aback that they can receive those benefits?
Amy: Sometimes people are, they just didn’t know what the rules were or there’s just such so much conflicting information out there they didn’t understand them the right way. There’s also a lot of confusion about the amount that you can receive. I’ve had a lot of people come to me and say, oh well I thought I could just get 50{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of my ex-spouse’s benefit because we were married for 10 years. And that is partially true, but sometimes you know, 50{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of their benefit may not be as much as if you took your own benefit.
And so Social Security, the way that it has tended to work is when you do file for benefits, they look at an ex-spouse’s record and they give you the biggest benefit you’re entitled to. But sometimes Social Security doesn’t always know all the rules depending on who you talk to when you call. And so, I think it’s just important again, to just not only spend the time to do your own homework, and some people don’t love doing their own homework and that’s okay, that’s why it just makes it even more valuable to work with a planner that can help you go through all of those pieces and make sure that what you heard or what you think you’re entitled to is the right thing for you.
Defined Benefit Plans
Bob (28:19): So, they don’t as prevalent as they once were, but some folks still have defined benefit plans and typically the beneficiary can choose a single life or maybe a joint and survivor option as well. Katie, any thoughts about what folks, divorced women need to know about defined benefit plans
Katie: As far as receiving them?
Bob: After the, post-divorce?
Katie: That can be a little complex. Most of the time it’s determined, kind of what’s going to happen, with those plans during the divorce. So oftentimes I’ll see that a client will, or maybe you didn’t necessarily work at an employer, but you’re entitled to a portion of your ex-spouse’s pension and some places it’s easier and harder to get information. Some of them you have an option to get a lump sum. Others you can take it at your retirement age.
There’s a lot of different rules so it can get a little complex. But what I would say is to make sure you call, get all of the information that you can from the plan administrator, and understand timing, what those payout amounts might be, what happens to your benefits if something were to happen to you, if you could name a beneficiary, there’s just a lot to make sure that you get the information and then when you can start taking those benefits and how best to receive them. So that’s where just getting the information is the first step because every plan is different
Estate Planning
Bob (30:01): So, we’ve covered a lot of ground. The last big topic is estate planning and divorce. Women, obviously they need to update their wills. Durable powers of attorney, we mentioned beneficiary designations, and the like. Katie, talk more about estate planning for divorced women.
Katie: Estate planning tends to fall, I think, at the bottom of everybody’s list. It’s thinking about our own death, is not really something most of us want to do, but it’s really important and particularly after a divorce.
I use this example because I think it really hits the point that I’m trying to make. Assume that you were to go out tomorrow and were hit by a bus and you haven’t updated any of your documents. Do you really want your ex-spouse to be the one making decisions about your healthcare if you haven’t updated it? And if it were me, I would say absolutely not. That’s not really who I’d want in charge. Not necessarily a bad thing. Sometimes that might be still the person you want, but having the option to take a look at your entire estate plan and decide who are the people that you trust, and that you want in those roles, that may different.
I mean oftentimes when you’re married it’s by default you pick your spouse to make those decisions, both from a financial perspective and health perspective, and named in your will. That likely has changed for most people. You might want to name if you have adult children, to name them or maybe a sibling or somebody else that you will carry out your wishes. And I’d say a lot of our planning from an estate planning perspective changes after a divorce of what we want to happen with the dollars that we have, where we want them to go, are they different people? Do you have charities in mind?
We always recommend to meet with an estate planning attorney. Most of the time you’re going to want to start from scratch because if you did have documents in place previously, they might not be as relevant anymore. But you just want to make sure that you have the right people in place to ensure that your wishes are carried out if something were to happen to you. Also, important if you have children and there’s decisions that you want to make sure are known and in writing. And if there’s funds being left to them who you want to be the guardian of that. There’s quite a bit from a planning perspective of just making sure your wishes are known and updated and you continue to keep them relevant.
Bob: Rick, Amy thoughts on that?
Amy: A couple thoughts came up for me. One of the big ones is yes, super important to update all your estate planning documents, but also really important to know that just because you update say your last will, if you don’t also update all of the beneficiaries on your other accounts to match, the will to a certain extent can be irrelevant.
What I mean by that is if your will says one thing, but the beneficiary on, say your retirement account, says something else, the beneficiary listed on the actual account is what is going to hold true. And so, I think it’s just important to know it’s not as simple like most things, it’s not as simple as just update your estate plan. You still have to go through each account to make sure all the beneficiaries match. So, everything says the same thing. The other thing is that if you are working and you work for a large enough company, a lot of big companies offer the option to enroll in a legal plan benefit during open enrollment.
I know when people hear the term estate planning or an estate planning attorney, they see dollar signs and they say, oh that sounds really expensive. And it can be. I mean basic estate plans usually run a couple thousand dollars.
One way to still tackle it but more maybe cost effectively is, if you have a legal plan benefit through work. It’s something that you don’t want to postpone, you know, ought to tackle it. And with legal benefits through work, usually you can only enroll in them during open enrollment or if there’s a qualifying event. You may have the option to sign up for one even if it’s not open enrollment. But I think the short version of the story is make sure your new estate plan matches all the account beneficiaries and also just look at options on how you can try to get your estate planning done for as an affordable cost as possible.
Q&A
Bob (34:48): We have some questions that have come in from our attendees, I’ll just go through them one by one and they can be jump all.
“I did not get the house in my divorce and have been told by friends that I’ll be renting from here on out. Is it feasible for a mid-sixties age person to consider purchasing a small house once the housing market cools or is it better to hold onto the small amount I’ll have towards living expenses, medical, as I age?”
Rick: Good question. I find the house is one of those areas that’s probably one of the biggest topics in a divorce. Who gets the house? Someone wants to hold onto the house and many times it’s not a financial reason, it’s an emotional reason.
I was raised that renting was throwing money away, so, you want to always buy a house. But I have found, especially as I’ve gotten older and don’t want to get up on a ladder and clean gutters, that renting is not really the worst thing in the world.
And I think, again, it comes down to having that comprehensive financial plan to see when you own a house, people sometimes think, well I’ve got the mortgage payment, I’ve got taxes, I’ve got insurance, and a water bill maybe, and then that’s it. But stuff happens in a house. The roof needs to be replaced, the boiler breaks down, the water heater lets go at 3:00 AM. So, there could be ongoing cost that you might not incur while you’re renting.
I think, you know, really, want to look at that and make your life as easy as possible. Sometimes renting is the right answer, sometimes buying just like, it depends, is kind of that catchphrase for a lot of financial pieces.
Bob: Amy? Katie?
Amy: I agree a hundred percent. I have run scenarios; I’ve been asked that exact question. And what we do is we run a side-by-side comparison. If all else is the same, here’s one version where you do buy a house, here’s one version where you rent. We typically assume rent does increase with inflation, as the years go on, because that’s what happens in real life.
In the house version, we do try to account for some annual cost to maintain and repair a home and we just look at the numbers, what looks better, what looks better it. You’re making guesses, you have to have some assumptions in there. But it is a really helpful way to, instead of just guess how does it feel, what numbers actually look like, your retirement plan will be more sustainable.
I think that’s one way to approach it is first you look at the numbers and if the numbers very clearly show one is better than the other, sometimes that’s all you need. What I do find is a lot of the times the numbers don’t really necessarily show one is that much different.
And so, then it comes back to the values conversation of, if you rent or you buy, maybe the plan still looks great, but which one feels better? Do you feel better having your own place that you can call yours or do you feel better knowing that if, you know, get termites, you can call a landlord and they can come take care of it. It’s kind of all those pieces together.
Bob: Katie, I’m sure you have some thoughts too.
Katie: Well, and the only thing I was thinking, because this is a question we get a lot of, is what makes the most sense? And, I hate the answer, is oftentimes it depends. It depends on how they spend and what that might look like. But really there’s the question of does it need to come out of my portfolio or should I save it?
I mean there’s also the option of does it make sense to take an amount out for a down payment and then do you qualify for a mortgage and can you get a mortgage to where you’re in a comfortable house that’s maybe spending less than what you were on rent? Another one of those examples of there’s always variables but that you can adjust in different scenarios.
So that would be one where you just, you have to crunch the numbers, but at the end of the day, where are you most comfortable and what’s going to provide you the greatest chances of success? Having it in your portfolio that you can access it or helping with cash flow by owning a home.
Bob (38:54): Another question is:
“How do you plan for retirement and your kids’ futures when you only have one income? Some of us don’t have child support or alimony. If there is any money left over, how best to invest for the kids’ 529 versus custodial account versus other options?”
Katie: Another great, great question. The first thing that I often think of is you can always borrow money for college and you cannot do the same for your retirement. So, make sure, I know it’s hard, I’m a mom myself, so I want to set my kids up with, to be successful, to do everything in my power to make sure that they have the money that they need to do X, Y, and Z. But a good way to think of it is doing, you’re doing them a service by taking care of you first.
Make sure you have what you need in retirement and then what makes sense if, how much do you want to contribute to the future? What is the goal for the money? If it is for college, then 529s are an excellent tool. And if you want to just have some money set aside for them to have complete flexibility of what they use the money on, then custodial account is a good option. If you want to set it aside in a brokerage account in your name and you don’t necessarily know where you want it to go or what that will look like, but the ability to use it on yourself if you need to, that’s when I go the third option for a brokerage account.
But pay yourself first and then really be clear about what you want to save for, for your kids, and then see if you can come up with some compromise to make sure you’re taking care of both goals but not sacrificing your retirement first.
Bob: Great advice. Amy or Rick?
Amy: I agree with all of that. I went through a brief moment of thinking I was going to start being really generous and saving for my kid’s future and then all of a sudden, we had three of them and I was like, you know what, let’s go back and look at my goals. And what I try to think of too, everything Katie said is totally true.
But I also just think of, if you save for your retirement first, one of the kind of lights at the end of the tunnel you can look forward to is if you put yourself in a really good place for your retirement, maybe what will happen is by the time your child gets to college age, you are in a better position to maybe help them.
You’ve saved for yourself, and maybe you don’t have a ton saved towards their college or saved towards their first home or whatever it may be, but now you’re more financially secure enough to be able to maybe help them with covering some of the costs of books or taking money from your own savings to just help make their life a little bit easier, so it doesn’t have to be all or nothing.
Rick: And I think college planning could be a whole other webinar, actually a 10 hour one. But as a single parent that’s not earning a huge amount of income, there are opportunities for more financial aid. and we don’t know if the child is two years old now, we don’t know 16 years from now what that’s going to look like.
But again, I think Amy and Katie are right on board. It’s kind of [like] putting the oxygen mask on yourself first on the plane before you put on someone else because if you don’t take care of yourself then your kids are going to end up taking care of you and that’s probably not a good thing either.
Retirement first, there’s always a way to pay for college. But as Katie pointed out, as far as I know, I haven’t seen any loans for retirement unless it’s like a home equity line of credit and that’s not a good strategy so don’t do that. So yeah, there’s always a way to pay for college. It might be a different school or it might be something else.
Bob (42:47): Another question is:
“How do you find a retirement planner who’s also an expert on taxes? I can’t seem to find them wrapped into one person and then when they are separate, the perspectives and advice don’t mesh.”
Rick: That’s interesting. I’m thinking they mean saving for retire, like having a retirement plan, but also looking at the tax implications. There are certified financial planners that are also CPAs out there and there are also certified financial planners that are very well versed in taxes. I would just recommend probably interviewing more people and finding the right fit.
Katie: It’s also becoming increasingly common for firms to have CPAs on staff. I know at Buckingham we have CPAs that will actually do your tax return and then you have an adviser and then they work together to make sure that your retirement plan and your tax plan are cohesive. I think that is becoming more and more common at firms. So that might be a good option, looking for a firm in your area that has an offering similar to that
Bob: Amy?
Amy: Yes, we do the same as Katie described. And I would say, also, one of the things that I find is that if you look for a financial planner who leads with a financial plan, usually you can find more of that comprehensive advice.
What I mean by that is, a lot of times, it’s unfortunate but people call themselves financial planners or financial advisers, and they don’t ask you anything about a financial plan, they just want to manage your investments. Which is an important piece of the puzzle. But generally, we always say at Sensible Money is, if you ask us how to invest your money, we’re going to say, well, we have no idea, what’s your plan? We need to know the plan so we know how to invest your money.
And think if you go out looking for a financial planner or an adviser that does the plan first, usually you find that that approach also translates really well into also looking at the tax piece, too, because they are connected.
Bob (44:59): Another question we got revolves around, we mentioned risk tolerance earlier about investment planning and saving investing. The comment is:
“I can say that risk capacity will also change and it should be reassessed along with risk tolerance as a result, as the asset allocation strategy will most likely change and the new financial plan will be the blueprint for this. Any thoughts about that?”
Katie: I mean as your risk capacity changes depending on, most of the time after a divorce, not only will the tolerance for risk, but also it becomes, for a lot of people, they can need and want a sense of security. So as far as risk is concerned, it becomes just as important if not more important to retain what they’ve saved and what they’ve walked away with. And that outweighs sometimes doubling or tripling it in, if you’re following me there, just the financial situations change. So certainly, I would agree with that.
Bob: Rick or Amy, any additional thoughts?
Rick: I think risk tolerance is one of those things, depending on when you measure someone’s risk tolerance, if you measured it this year, I think you would get a very different score than if you measured it two years ago. It’s usually changing as someone ages; it probably changes because they’re getting closer to maybe not working. It’s something that is an important conversation to have and ongoing as well.
Amy: I would just add, too, that if you’re talking to a financial planner and you don’t feel comfortable with their approach, keep looking as it’s not a one-size-fits-all. There are lots of approaches out there to investing and retirement planning and you have to find one that you’re comfortable with.
I think it’s important to interview a lot of different people and find one that just does feel like the right fit for you. Some approaches are more risk averse and some are more comfortable with risk and you have to find the one that you can sleep at night using because if it’s something that you don’t feel good about, you’re not going to enjoy it, you’re not going to feel comfortable with it and you’re probably going to change course at not a good time. You need something that fits with you.
Bob (47:24): We have about 10 minutes left. We have a boatload of questions here. I’ll try to go through them as quickly as possible. The next one reads, I’ll try to paraphrase:
If someone has sufficient equity in their house, could they look at a reverse mortgage for purchase with no mortgage having to be made?
Katie: So, if they have sufficient equity, that would assume they already own the house. Yes, it’s an option. That’s certainly an option. I have clients with reverse mortgages that it made sense at the time. So really that’s one of those things that you’d have to evaluate.
Bob (48:01): All right. I’ll move on to the next one. We’ll do this rapid fire.
“What do you do first? Find a financial planner or an estate planning attorney. Can one person set you up with everything? How do you leave money for someone who has a mental illness?”
Rick: Great questions. I think they both dovetailed together because definitely someone with mental illness, you know would probably use a special needs trust. You need an estate planning attorney to do that piece. I personally would, I’m guessing biased, but I would start with a financial planner because they have other relationships generally with CPAs and estate planning attorneys and they might be able to find a really good fit for you based on their needs. So that’s where I would start.
Amy: I would just say to start with, if you find a really good estate planning attorney and you trust them, you start there and they probably have recommendations for a financial planner just like the other way around. I do think it goes back to finding someone you’re comfortable with first and foremost.
Bob (49:05): All right, so let’s see. The next one I have is:
“I plan on selling my house when I have two of my three out of the house. Should I invest the profit from selling my house, approximately six years away, or put profit towards a smaller mortgage when you would be about 10 years from retirement?”
Amy: That dreaded answer, it depends.
It depends on the math. I would say if it was two years ago, most of the time the math would support taking the cash and investing it because mortgage rates were so low. With mortgage rates continuing to creep up now, running the numbers and really look, doing a comparison, is so much more important because it does really depend.
I think when you’re looking at retirement planning, generally we want to assume a pretty conservative rate of return on your retirement investments. The concept of you want to under promise and overdeliver. You’d rather plan for the worst, hope for the best.
So, if you were conservatively saying, oh my retirement investments maybe will average 5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} a year over my lifetime, but now you have to get a mortgage with a 7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} interest rate, quick math just says, oh, I’m paying 7{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} on the debt and I’m only going to earn 5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} on the investments, I would rather pay off that mortgage as quick as possible. Those are some of the rules of thumb, but it really does come down to, again, comprehensive plan and just looking at how all the pieces fit together.
Bob: No getting around that plan, I think.
Amy: We all need bumper stickers. “It depends,” the financial planner’s favorite answer.
Bob (50:43): All right, we got the one last question here.
“What if you had everything in place, including long term disability, and became disabled and employer long term disability denied your benefits, typical, can never work and you’re only 57 years old. SSDI doesn’t cover much even though I’m maxed from it. Is the only option alimony modification? What happens when I turn 65 and alimony, a very low amount, ends?”
That’s a lot of questions.
Amy: I don’t know if I have an answer for that one.
Rick: Not a simple answer, for sure.
Katie: And that would be a good example of a time where working with someone who can take a look at your current disability policy, make sure that, I mean ,of course you wanted to look at it before you’re disabled to make sure that it is the type of coverage that you’re hoping and needing. It sounds like you’re already disabled, so having someone look and make sure that the insurance company is correct in their denying of benefits, that there, there’s not any other options there.
And, I would just see if I could find somebody who knows disability insurance well and the options with Social Security to help you evaluate those options. I actually might start with going back to the attorney that you worked with and seeing if there is, how much it’ll cost to modify your alimony, and if there are any options to having it go beyond 65. But that really depends on your case and what state you live in and what the options are there. So, in your case, I might start back with the divorce attorney and then work with someone who specializes in disability.
Rick: And I imagine that some disability insurance companies just deny a claim the first time around, and Social Security might. So, it’s definitely worth, again, like Katie mentioned, get an expert in and look at reapplying and challenge them, and maybe they’ll change their answer.
Final Thoughts from the Panelists
Bob (52:56): We have about four minutes left. I want to leave time for each of you to provide a summation of “what now?” questions, now that someone might be divorced and embarking on their new life. Rick, why don’t we start with you?
Rick: So, I guess we start with, it depends, and also, it’s really important to have a good comprehensive, holistic plan to really look at every detail. And again, as Katie pointed out, we don’t want to overwhelm people, so we just bite off as much as we can chew and start with the more important things first and then work our way down the list.
And it might take a few months, it might take a year, but it’ll get done. And especially if you’re working with someone that can kind of keep you on track. And I think that’s really, really key.
Bob: Amy?
Amy: Yes, I a hundred percent agree with the comprehensive financial plan, identifying what your goals are and then sitting down and taking the time to map it all out is important.
I think the other thing I would just say is I always try to be a glass half full person and I think we all go through really challenging times in our life, some more so than others. But as hard as it is to go through it, I always just try to remind people that you will get through it. It’s going to stink right now while you’re in the thick of it. It usually is really overwhelming and it’s hard to think about what life might be like on the other side. But I think that also just adds to the importance of sitting down, thinking about your goals and trying as much as you can to think of it as a fresh start and a new opportunity.
And hopefully it, it’s the bad stuff’s behind you and the good stuff is what you have to look forward to.
Bob: Katie, you get the last word here.
Katie: Okay, so I’m going to go with very simple advice. Just staying organized.
You have a laundry list of things that we’ve told you, we’ve shared with you a lot on your to-do list. One of the best things you can do for yourself is just stay organized and if you need a little bit, help finding someone to be an accountability partner.
If you don’t have access to a financial adviser, aren’t already working with someone, find someone else in your life that can check in with you to make sure that you’re getting all of these things crossed off your list because they’re so, so important. So just find anyone that is willing to help nudge you along and provide friendly reminders.
Bob: Well Rick, Katie, and Amy I want to thank you for sharing your knowledge and wisdom with our attendees today. It is greatly appreciated and I want to thank all the attendees for today’s session. It has been recorded. We will post it on Retirement Daily so you can view it again if you miss something or want to re-listen to it at a future date. And again, we’ll thank you.
We plan to do these webinars every quarter. We plan to focus on a different topic. I guess I should ask Amy, Rick, Katie, is there a topic that we should drill down on the next webinar?
Amy: Trying to think what’s the most important.
Katie: I mean, investing in retirement planning, we could probably all three talk for hours about each of those topics. So, getting a little bit more specific on strategies and ideas and things like that would probably serve people well.
Amy: Right.
Bob: Perfect. That’ll be the topic for the next one. Thank you again for attending and thank you for being our special guest today to help folks. Thank you again
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20 of the 21 top-paying jobs are all in the healthcare industry.
The healthcare industry is projected to grow 13{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the next 10 years, adding 2 million new jobs.
Wondering what career you should pursue? Or, if you’re already in the workforce, maybe you’re considering a change. Regardless of your circumstances, it’s always helpful to know which jobs are the most lucrative. Here are the highest-paying jobs in America, according to data from the Bureau of Labor Statistics. With the exception of just one job, all of them are in one industry.
Highest-paying jobs
Out of the top 21 highest-paying jobs, 20 of them are in the healthcare industry. The one exception are airline pilots, copilots, and flight engineers.
Rank
Job
Salary
1
Cardiologists
$353,970
2
Anesthesiologists
$331,190
3
Emergency medicine physicians
$310,640
4
Orthopedic surgeons, except pediatric
$306,220
5
Dermatologists
$302,740
6
Radiologists
$301,720
7
Surgeons, all other
$297,800
8
Obstetricians and gynecologists
$296,210
9
Pediatric surgeons
$290,310
10
Ophthalmologists, except pediatric
$270,090
11
Neurologists
$267,660
12
Physicians, pathologists
$267,180
13
Psychiatrists
$249,760
14
General internal medicine physicians
$242,190
15
Family medicine physicians
$235,930
16
Physicians, all other
$231,500
17
Orthodontists
$208,000 or more
18
Oral and maxillofacial surgeons
$208,000 or more
19
Airline pilots, copilots, and flight engineers
$202,180
20
Pediatricians, general
$198,420
21
Nurse anesthetists
$195,610
Source: bls.gov
Employment for those in the healthcare industry is projected to grow 13{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the next 10 years. This increase is much faster than the average for all occupations, adding 2 million new jobs. In addition to new jobs from growth, there will also be job openings from those retiring or leaving the industry. This equates to about 1.9 million openings each year, leaving plenty of opportunities for those looking to go into the healthcare industry.
Overall employment of airline and commercial pilots is projected to grow 6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the next 10 years, which is about as fast as the average for all occupations. It is projected that there will be 18,100 openings for airline and commercial pilots each year, which includes opportunities for replacement and growth.
How to get these high-paying jobs
Getting a job as a doctor or airline pilot requires a great deal of education and training. Physicians and surgeons typically need a bachelor’s degree as well as a degree from a medical school, which takes an additional four years to complete. Doctors can also choose to specialize, resulting in three to nine years in internship and residency programs. Subspecialization requires additional fellowship training that can last one to three years.
Airline pilots typically need a bachelor’s degree and experience as a commercial or military pilot. Commercial pilots typically need flight training, and some employers may require or prefer them to have a degree. To get a job with an airline, pilots need extensive flight experience. Many work as flight instructors or on-demand charter pilots to help build enough flying hours so they can apply to the airlines.
While these high-paying jobs require advanced education, there are plenty of six-figure jobs you can get with just a bachelor’s degree. Jobs in engineering, information technology, and management offer salaries well over $100,000 that can boost your savings and investments. The world’s wealthiest people earned their wealth by creating something new of immense value and starting their own business. Best of all, anyone can start their own business!
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KANSAS City — The holidays convey a regular movement of clean flavors and seasonal kinds to grocery shop shelves, a trend the ready-to-eat cereal group will find to capitalize on as it works to lift unit profits.
In the 52 weeks finished Oct. 30, dollar sales in the RTE cereal group totaled $9.3 billion, up 7.2{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} from the same period of time a year ago, in accordance to IRI, a Chicago-dependent sector investigate business. Device sales, in the meantime, fell 5{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} in the period. The category’s two most significant manufacturers — Common Mills, Inc. and Kellogg Co. — account for practically 60{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} of income, but each professional a dip in device revenue in the course of the interval, with unit revenue down 3.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at Standard Mills and down 14{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at Kellogg, according to IRI. And in the situation of Kellogg, dollar sales fell 2.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a}, which was in sharp distinction to calendar year-in excess of-year development of 11{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at Normal Mills, 10.6{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at Article Holdings, Inc. and 14.1{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} at Quaker Oats Co., according to IRI.
In the case of Fight Creek, Mich.-primarily based Kellogg, it has been a struggle to get well from a fire and labor strike in late 2021. The firm has worked tricky to rebuild inventory and lately has started to get well share throughout its critical brands, principally by way of amplified on-shelf availability and gradual resumption of industrial functions. The company also has prioritized inventory-holding models.
“The very good information is that the category is demonstrating sturdy development right now, accelerating to the double digits in quarter three on the energy of enhanced rates and below-normal elasticity,” Steven A. Cahillane, president and chief govt officer of Kellogg, reported for the duration of a Nov. 3 conference phone with analysts to go over third-quarter results. “The even greater information is that our consumption growth has accelerated even more quickly than the classification.”
Mr. Cahillane credited indulgent certified meals like Cinnabon Bakery Inspired Cereal with encouraging essential the recovery. Discontinued in 2018, Cinnabon Bakery Motivated Cereal returned to retail store cabinets in October many thanks to hefty need from the cereal’s fanbase. Kellogg also debuted a line of portable Kellogg Instabowls, which are cereal bowls that contains powdered milk that can be activated with the addition of chilly water. The single-serve Instabowls are at this time out there in four Kellogg cereal flavors: Frosted Flakes, Froot Loops, Apple Jacks and Raisin Bran Crunch.
The vacations also mark the return of The Elf of the Shelf Scorching Cocoa Cereal. The minimal-edition giving capabilities cocoa-coated star pieces intermingled with white mini marshmallows. Each and every 1.5-cup serving incorporates 140 calories and 14 grams of sugar.
“In small, we sense excellent about where we are in this small business,” Mr. Cahillane reported. “We’ve restored stock concentrations. We’re again on shelf, and we are rapidly recovering share. In addition, we have turned again on our business packages. And similarly importantly, we are generating fantastic early development towards restoring gain margins in this business enterprise.”
At Basic Mills, the Minneapolis-based company is wondering compact to go massive. The firm earlier this thirty day period debuted Minis — a new line of cereal that scales down 3 of the company’s classic cereals to be miniature. Trix, Reese’s Puffs and Cinnamon Toast Crunch are now available in smaller ball designs relative to the normal puff cereal measurement. The Cinnamon Toast Crunch Minis function the traditional cinnamon sugar taste of the unique but in an all new round shape. The Trix and Reese’s Minis characteristic the vintage cereals in scaled-down styles.
“Sometimes the greatest new innovation is the smallest 1,” stated Mindy Murray, senior advertising communications supervisor at Typical Mills. “There’s these types of a like right now for entire-dimension things that have been shrunk into mini versions, and we understood we could do the very same with our cereals. We just cannot hold out for family members to try out the cutest new way to practical experience their favorites one Massive (tiny) bite at a time.”
Common Mills also is supplying a slew of new and returning seasonal cereals. Sugar Cookie Toast Crunch and Apple Pie Toast Crunch are returning to cabinets as extensions of the Cinnamon Toast Crunch line, while Rudolph the Purple-Nosed Reindeer Cereal is building its debut. The very hot cocoa-flavored reindeer cereal involves marshmallows in the designs of Rudolph’s red nose, blue elf hat, and eco-friendly vacation trees.
Quaker Oats Co., a division of Purchase, NY-centered PepsiCo, Inc., has brought back again Christmas Crunch, which the organization has bought some version of for the previous 35 several years. The return of the seasonal cereal should continue the momentum Quaker has witnessed with its Cap’n Crunch manufacturer. In the 52 weeks ended Oct. 30, dollar revenue of Cap’n Crunch Crunch Berries surged 22{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} around the preceding 12 months guiding 3.9{1b90e59fe8a6c14b55fbbae1d9373c165823754d058ebf80beecafc6dee5063a} progress in unit sales, in accordance to IRI.
