May, 2019: Two industry leaders have joined forces to deliver a first of its kind financial wellness solution for employers. The Foundation for Financial Wellness has teamed up with Votaire by Nyhart to tackle the need for both personalized financial training and education, live one-on-one counseling, and a first of its kind health and wealth benefits platform.

 “We saw a need to deliver a comprehensive financial plan that covered an employee's whole economic life. This included how company benefits and personal financial decisions impacted the lives of those who were learning how to live financially well,” stated Brent Hines, CEO of The Foundation for Financial Wellness. “By partnering with Votaire, we can now offer our clients with actuarial level financial guidance on how things like life insurance, voluntary benefits, health savings accounts and retirement planning will actually be affected by what they are learning from our team.” 

Votaire is a very unique platform. Lisa Hague, Co-Founder of Votaire said, “Votaire is a digital platform with a goal that mirrors the mission of Foundation. We believe that our ability to integrate corporate benefits, other supplemental benefits, health care status, and personalized guidance enables people to succeed financially. Votaire not only guides, but actually provides solutions to our participants, such as student loan assistance, retirement planning, and more.”

The need to create a more sophisticated wellness initiative in workplaces today is critical. Already, employers are looking to provide solutions and not just literacy. The combination of Votaire with the Foundation for Financial Wellness allows employers to evolve their financial wellness.

About the Foundation for Financial Wellness:

The Foundation for Financial Wellness is an educational nonprofit that provides financial wellness courses and counseling, empowering individuals to achieve their financial goals. As a 501(c)(3), it works with individuals and organizations, delivering courses and counseling to help increase financial health and well-being. The Foundation has been improving the overall well-being of people since 2012. You can learn more at the Foundation's website here.

About Votaire: 

Votaire is a health & wealth benefits and financial accountability platform born out of pension and healthcare actuarial expertise. Votaire focuses on providing action plans to help participants on the road to financial wellness and connecting them to the solutions they need. Users are shown to have increased 401(k) deferrals, increase HSA contributions, and more. You can learn more about Votaire at https://votaire.com. 

Votaire Contact:

Sam Weiss

sam.weiss@nyhart.com

(317) 845-3525

Foundation for Financial Wellness Contact:

Doug Field

dougf@ffwteam.org

(404) 783-9820

Social Security is a complex beast. You can elect to take Social Security retirement benefits as early as age 62 or as late as age 70. There’s also your full retirement age, which isn’t going to be either of those.

If you elect to take benefits at 62, you’ll suffer from reduced monthly payments– as much as a 30% reduction over what you’d have at full retirement age. For every year you delay benefits past your full retirement age, you can see an 8% increase in monthly benefits. Putting the two of these together, your monthly benefit if you elect at age 70 can be substantially more than if you elect at age 62.

So what’s right for me?

Unfortunately, the answer is “it depends.” Generally speaking, if you’re in good health and can afford to live off your savings for a while or can delay your retirement, taking benefits at an older age is a good option to consider. If you’re in poorer health or just really need the money, you may consider taking benefits closer to 62.

Here’s the good news

Votaire can help with this decision! By using actuarial expertise, Votaire helps determine what age it might make sense for you to take Social Security benefits. Log in to check it out.

Don’t have a Votaire account? Download the app for iPhone here or for Android here, or contact us to learn more.

Health Savings Accounts (HSAs) are a great tax-advantaged way to pay for healthcare expenses. You can defer your income into your HSA on a pre-tax basis, and when you pay for healthcare expenses, it comes out tax-free, too.

BUT there’s another key benefit: invest your HSA, and your account grows tax-free! HSAs roll over from year-to-year (there’s no “use it or lose it”). In fact, most HSAs can be invested similarly to a 401(k)/403(b). By investing your HSA, you can watch your money grow and grow until you’re ready to use it to pay for qualified medical expenses, again tax-free.

Votaire helps you quantify the tax savings you could realize with an HSA. Log in to Votaire to see how much your HSA could be saving you. 

Don’t have a Votaire account? Download the app for iPhone here or for Android here, or contact us to learn more.

The short answer: YES!

Votaire uses a data-driven approach to financial wellness guidance that is dynamic, holistic, and personalized. This approach clearly works, with real change being made among Votaire users:*

74%

Votaire users contribute 74% more as a percentage of pay to their 401(k) than their coworkers who don’t use Votaire.

70%

Votaire users are also 70% more likely to increase their HSA contributions than their coworkers who don’t use Votaire.

60%

Votaire users are 60% more likely to take additional supplemental life benefits. Additionally, of those that increased the amount of supplemental life coverage elected, the average Votaire user increased their coverage by almost three times as much as those that weren’t using Votaire.

To learn more about how Votaire is driving change among participants, contact us.

* These findings are from actual enrollment data and Nyhart’s 401(k) recordkeeping data.

One trap that’s easy to fall into is a sort of “artificial budgeting,” where you’re using Votaire or another tool to categorize your expenses and see how much you’re spending on each category. That has some value (you get to see where your money is going), but if that’s all you’re doing, you’re missing out on the main point.

Budgeting starts with a goal: saving for a down payment on a house, paying off credit card debt, putting away 20% of your income, you name it. Once you have the end goal in mind, let that guide how much you can afford to spend each month and budget that out for your spending categories.

Now here’s the kicker – stay within those budgets. If you’re classifying your expenses but not letting your budget guide your spending, you’re still not working towards your goal. The important (and difficult) part is knowing that that extra cup of coffee isn’t in the budget and turning it down.

Link your accounts in Votaire and let it be your accountability partner to make sure your budget helps you meet your goal. Don’t have a Votaire account? Download the app for iPhone here or for Android here, or contact us to learn more.

Life occasionally throws a curveball that catches you off-guard. Whether it’s a medical emergency, job loss, or something with your home or car, these curveballs often cost money or interrupt your income.

When financial strains happen because of these events, an emergency fund can help ease the burden without causing you to borrow from your 401(k), take a payday loan, etc. When planning out your emergency fund, consider this:

·        Plan on setting aside about 6 months’ worth of expenses.

·        Keep your emergency fund in a separate savings account so that you’re not tempted to use it for non-emergencies.

·        You don’t have to set aside the full amount right away. Votaire will help you come up with a realistic plan to get your fund to the right amount.

Log in to your Votaire account to find out how much you should be setting aside for emergencies and get started saving today! Don’t have an account? Contact us to learn more.

Let’s imagine that it’s time for your annual physical. 

You go to the doctor, and she hands you a piece of paper with generic information about how most people can get healthier -- the same piece of paper she handed you last year. 

Or maybe she harps on why it’s important to take your vitamins and exercise. When you tell her you already take your vitamins and exercise five times a week but you’ve been struggling with back pain, she tells you she only deals with vitamins and exercise, and you’ll have to find someone else to talk to you about your backache.

You’d never want to be on the receiving end of such generalized, passive, or siloed health advice. In reality, your doctor tailors health advice to you and what’s going on in your life. It changes as you age or as life events come up, and your primary care doctor can speak at least at a high level about all aspects of your health.

In the same way, financial wellness needs to be dynamic, holistic, and personalized. 

Generalized, passive, or siloed approaches just don’t cut it.

Votaire’s account linking allows it to be dynamic to changing market conditions. Our holistic nature considers everything from budgeting to retirement and from college savings to life insurance. Finally, Votaire’s personalized approach provides you a plan with actionable steps right for you.

Use Votaire to stop stressing about finances and focus on what really matters, whether it’s Junior’s upcoming game or that date night you promised your wife.

Understanding the right amount of life insurance to buy can be tricky. A common rule of thumb is to buy a policy equal to a certain multiple of your income, such as five, seven or ten times your annual salary. But rules of thumb often don’t cut it – so how much is enough? 

Votaire will calculate the amount you need for life insurance based on your specific situation. Your family’s needs, debts, college savings, and more are used to help you figure out what’s appropriate for you.

Log in to Votaire to check out your life insurance needs. Don’t have an account? Contact us to learn more.

Having a will is one of the most important things you can do to protect your family. Unfortunately, it’s often overlooked. 

Without a will, the government will determine custody of your children and your assets should the unthinkable happen. Having no will also causes delays in the distribution of those assets. If you don’t already have a will, it’s time to get one. Do it at a discount by going through Votaire.

If you already have a will, but it’s been a few years since you reviewed it, dust it off and make sure you’ve accounted for recent life events like births, inheritances, or new properties. 

Protect your family. Get a will.

Votaire’s desktop experience has now helped countless people improve their financial wellness. Now the power of dynamic, holistic, and personalized financial wellness can fit in the palm of your hand! Votaire just released the first version of its mobile app, and we are psyched to make financial wellness more accessible than ever.

Whether you’ve used the desktop experience or not, we’re offering you an exclusive chance to download the app and give it a spin for FREE. iPhone users can get the app from the AppStore here, and Android users can download it from the Google Play Store here.

So you want to save for Junior’s college. How much is college going to cost by the time Junior gets there? How do you get there? And what 529 plan should you open to get there? Spoiler alert: it may not be your state’s plan! 

Now with Votaire, you can do all of that and more!

- Get a personalized estimate of how much college will cost for your child.

- Develop a savings plan.

- Get connected to a 529 plan to start saving today.

Want to learn more? Contact us or check out 529 College Savings from your account to get started.

PS If you’re foggy on the details of a 529 plan, you can check out this article.

See Your Forecast

Your goal should be a Bright forecast. Don’t worry if you’re not there yet. It will take time but we will help. 

Setup Your Budget and Track Your Spending

Create a budget and link your financial accounts. You can then monitor your spending, discover ways to improve and track your progress. 

Achieve Financial Wellness

Explore other items below your forecast or follow Next Steps and we'll guide you. We will periodically send you tips and reminders, but be sure to return each week to learn what steps you should take to improve your forecast. 

Life insurance acts as a safety net to replace lost income as well as provide for a host of other circumstances that arise due to the loss of a family member.

It can come in a variety of forms, but the majority of policies fall under two primary categories: term and whole. A term life policy will cover an individual for a specified period of time (e.g. 20 years) and will provide a death benefit in the event of the death of the policyholder. A whole life policy, as the name describes, covers the entire life of the policyholder and offers both a death benefit and a cash value that can be withdrawn throughout the duration of the policy.

Votaire focuses on term life, both because it is simple to understand and often offered through employers. It is also significantly cheaper- a 25 year old male can purchase a 30 year term life policy with a face value of $250,000 for roughly $20/month while a whole life policy for that same 25 year old male could be upwards of $250/month.

Do you have kids who will be going off to college at some point over the next 10 years?

Aging parents that depend on your financial support for their well-being? This is where term life insurance can add significant support to the long-term stability of any family.

The question then arises, “Well how much do I actually need?” Votaire accounts for your entire financial picture. That way you will be given the necessary guidance that best fits YOUR needs and YOUR goals, not anyone else’s.

So check out our life insurance section to get the advice you need.

Voluntary benefits are products that fill the gaps that traditional health insurance does not cover.

One example is “Critical Illness Insurance”. It provides coverage for high out-of-pocket costs associated with an event like a heart attack or kidney failure. Most health insurance plans would leave you exposed to such expenses.

Common voluntary benefits, available through open enrollment, include:

• Supplemental Life
• Short-Term & Long-Term Disability
• Long-Term Care
• Dental
• Vision
• Critical Illness
• Cancer
• Accident



Check out Votaire to see how you can benefit from voluntary benefits.

In the event that your spouse dies after having worked a long enough period of time to qualify for benefits under Social Security guidelines, you can become eligible to receive reduced benefits as early as age 60 or full benefits at full retirement age.

We can help you along your path to receiving survivor benefits.

For those that are eligible for both individual retirement benefits and survivor benefits, understanding when the ideal time to apply for each can be difficult. You cannot elect to receive both benefits simultaneously; however, you could choose to take reduced survivor benefits at an earlier age and defer your retirement benefits until after full retirement age (retirement benefits grow past full retirement age but survivor benefits do not). Strategically choosing when to opt into each plan can have an immense impact on the overall income you’ll receive throughout the rest of your life.

Let us help you devise your optimal Social Security plan. Create your account today.

There are two basic approaches to climbing out of debt:

The snowball approach and the avalanche approach.

The two methods are similar- you pay the minimum monthly payment for every debt while allotting any extra cash to the repayment of one debt in particular. The difference lies in how you allocate the additional funds. Utilizing the snowball approach, a person will focus first on the debt with the smallest balance, and go to the next smallest after each prior debt is paid in full. In the avalanche approach, accounts with the highest interest rates take precedent until each debt is paid in full.

There is proof that the avalanche approach is more effective on paper.

However, it’s not for everyone.

Those using the snowball approach will see single debts paid off earlier, thus providing important psychological momentum.

While you should take the time to select the right approach for you, it’s most important to do something. Start by making sure you are making the minimum monthly payments on all of your debts.

Over the past decade, the level of student debt issued in this country has risen drastically.

In 2017, the average college graduate left school with an obligation close to $40,000, up $20,000 from just a little over a decade ago.

As a result of this massive amount of debt, young Americans are being forced to put off major life milestones like home ownership and even marriage. And beginning the retirement savings process can be nearly impossible.

If you have student debt you have options:

Consolidation

By combining multiple loans into one, you not only reduce your chances of accidentally missing a payment, but you may also receive a lower interest rate.

Loan Forgiveness Programs

Government programs exist that will help to reduce an individual’s total outstanding student loan debt through federal work or volunteer programs. Some of these will require the individual to make monthly payments for ten years, at which point the remaining balance will be wiped out

Refinancing

Student loans can be refinanced to achieve lower interest rates. Consolidation is really just one form of refinancing.

As student loans continue to hurt the outlook on retirement even at an early age, it is more important than ever to have a plan of action for tackling this issue.

High healthcare costs mean that you shouldn’t jump into retirement without first doing some research.

If you retire prior to age 65 and don’t have coverage through a spouse’s group plan or some other means, you’ll need to find a way to continue health insurance until Medicare starts at age 65.

You can often continue coverage through your employer via COBRA coverage for at least 18 months, but you’ll have to pay the full premium (which is likely much higher what you paid as an active employee) plus a 2% administrative fee.

Another option is to get a plan through the Affordable Care Act exchanges.

Be careful with these, though, as the premiums are age-rated, meaning a 64-year old could be paying up to three times as much as a 21-year old! Fortunately, government subsidies can help offset the costs of these plans. Tools like this one from the Kaiser Family Foundation can help you estimate your costs and the government subsidy you’ll receive.

My Grandfather lived until he was 97.

I was fortunate to have him play a big role in my life. I always admired that despite his humble job as a telephone lineman, he somehow saved and sacrificed so he could send all six of his kids to college. The guy had his priorities straight.

When he retired after working for the telephone company for four decades, the guys on his crew threw him a party and he walked away with a pension for life and a generous healthcare plan. He spent his long retirement traveling around the country with my Grandmother to do what he loved most – spend time with his kids and many grandkids.

My Dad is a lot like my Grandfather.

He’s a hardworking guy who sacrificed for his four kids. He provided for his family and helped with our education. Now he’s 65 and my Mom is 64. Neither will have a pension or employer-provided healthcare in retirement. They are diligent savers and they should be okay. But they are concerned they’ll outlive their money.

We all know Baby Boomers like my parents. That’s why we’re doing what we’re doing: to, as my Grandfather would say, do good for the people around us.

Robo-advisors are the latest craze in wealth management. 

They use software to automate investment management. They are almost always cheaper than traditional wealth managers and their returns are usually equal to or greater than human advisors.

BUT…they are limited in providing retirement advice. Retirement planning is a two-sided coin:

• Accumulation, or investment management
• Decumulation (in which people choose how much to withdraw each year & healthcare)

Robo-advisors ignore the latter. We don’t.

Finally, there are no robots behind Votaire. Only humans. Super smart humans.

Medicare eligibility begins at age 65 (some health-related issues could trigger earlier eligibility). But it will require you to make some choices. First off, there are 4 “Parts” plus various Supplemental plans:

Part A is free for most people. In 2017, the standard Part B premium is $134, but most people will pay less (Medicare.gov cites the average premium as $109). Premium amounts for Parts C & D and MediGap plans vary, based on the specific plan you purchase. Medicare Part C (Medicare Advantage) is a combination of Parts A, B, and sometimes D. Importantly, Parts A through C leave you open to out-of-pocket medical expenses like deductibles, copays, and coinsurance. MediGap covers that “Gap” of out-of-pocket expenses.

At a high-level, your two options are:

1. Elect Medicare Parts A and B, buy a Medicare Part D drug plan, and buy a Medicare Supplement (MediGap) plan; or
2. Buy a Medicare Part C plan (Medicare Advantage) and buy a Medicare Part D plan if it’s not included in that Part C plan.

While the first strategy may appear more expensive and complicated, it may cover more of your out-of-pocket costs. The second strategy may seem to be cheaper but could leave you with charges resulting from unforeseen out-of-pocket costs.

So if you are unhealthy or have a family history of disease, you may want to consider the first strategy. Additionally, because the upfront premiums for MediGap plans usually cover most, if not all out-of-pocket expenses, budgeting should be easier.

You will only be auto-enrolled in Medicare Part A if you are receiving Social Security benefits at least 4 months prior to your 65th birthday. Otherwise you will have to actively enroll in Medicare. The enrollment window opens 3 months before your 65th birthday.

If you are still working past age 65 and you have health insurance through your employer and your company employs 20 or more individuals, then you do not have to enroll in Medicare upon turning 65. This also enables you to continue contributing to an HSA if you have a high-deductible health plan through your employer.

If you’re confident in your health or you want to avoid the higher upfront premiums, you may want to go with the second strategy.

Keep an eye out for upcoming Votaire blog posts about specific costs and your MediGap options.

According to the Federal Reserve Bank of New York, Americans’ total household debt has reached $13 trillion – a record high.

Debt can drag down your finances and your retirement, so it’s important to have a debt management plan. Here are a few tips:

1. Identify bad spending habits: In order to tackle your debts, you are going to need extra cash flow. Identify where you can cut your spending.

2. Set up an emergency fund: If you lose your job or you are hit with an unexpected expense, you need to be ready. A good rule of thumb is setting aside 3-6 months of expenses.

3. Pay at least the monthly minimum: If you don’t pay off the minimum, your credit score will drop, you might be stuck with penalties and you become at-risk for bankruptcy.

4. Prioritize by interest rate: After paying the minimum on each debt, pay more than that on debts with higher interest rates. This will save you large payments in interest down the road. Credit cards tend to have the highest interest rates.

5. Consider refinancing/consolidating: For debts like student loans or mortgages, you may be paying more interest than you should. Search for lenders and their current offerings for refinancing. By doing so, you may reduce your monthly payment AND the period of the loan.

Votaire can help. Check out our budgeting and emergency fund features and create your comprehensive plan. If you take the time to plan today, you’ll have more financial freedom tomorrow.  

What is a 529 Plan?

A 529 Plan is a state-operated program that helps families save money for future educational expenses.

How does it work?

You contribute your after-tax dollars to a professionally managed investment account. That money grows for years and years until you send your (hopefully grateful) kid to college. At that point, all withdrawals used for eligible expenses are tax-free. Per the 2017 Tax Cuts and Jobs Act, eligible expenses include college expenses as well as public, private or religious elementary or secondary school expenses. As an added bonus, you will likely qualify for a tax deduction or tax credit in each year you contribute to the 529 (amounts vary by state).

The earlier you start, the better. Consider a family who starts putting $100 per month into a 529 plan. If they earn 6% on their investments over 18 years, the account would grow to nearly $40,000. 

There are state-specific contribution limits, which apply to the total value of all contributions within each 529 Plan. Most state limits are between $300,000 and $500,000. Also, note that annual contributions in excess of $14,000 per individual ($28,000 per married couple) may result in paying a gift tax.

Additional benefits include:

Reducing College Student Loan Debt

·        According to studenloanhero.com, the average student loan debt for the class of 2016 graduates is $37,172 – up 6% from the prior year.  

·        Ever-rising college costs means the average burden will likely increase.

Lowering Your Tax Bill

·        Investment earnings are not subject to federal tax, and generally not subject to state tax when used for qualified education expenses.

·        Many states offer significant state tax deductions on contributions.

Eligibility Age

You are eligible to begin your benefit once you turn 62 and you must do so no later than age 70. The later you take it, the higher it will be. 

Votaire will calculate your projected monthly benefit for you, based on your salary and your planned starting age. We will also tell you the best year for you to take it, based on your income needs and projected life expectancy.

You will automatically be enrolled in Medicare Part A if you are receiving Social Security benefits at least 4 months prior to your 65th birthday. Otherwise you will have to actively enroll in Medicare. If you are still working and want to maintain the ability to contribute to an HSA, you will need to defer your Medicare enrollment, as that will disqualify you from your high-deductible health plan.

Spousal Benefit

If you are the lower income-earner in a married couple, you will have the option to take your individual benefit or a “spousal benefit.” But this is only true if your spouse has already begun receiving their payment. If that is the case, once you apply for your benefit, the Social Security Administration will ensure you get the higher of your individual or spousal benefits.

If you are the lower income-earner, and you begin receiving payments prior to your spouse, then at that point you will be limited to your individual benefit. However, once your spouse begins their benefit, you can choose to switch to the spousal benefit. 

If your individual benefit is less than half of what your spouse receives, you will generally get a higher benefit with the spousal benefit.

Want to know your optimal Social Security strategy? Create your account today.

According to the SEC, an estimated 1 in 5 Americans aged 65 or older have already been victims of financial fraud.

Follow these steps to keep your information protected.

1) Never provide payment or sensitive information on a call that you did not initiate.

If you get a voicemail from your credit card company that asks you to call back, only call back using the number listed on the back of your card. Never respond directly to the contact number in the message.

2) Store your Social Security card, financial documents, and unused credits cards in a secure location.

If you are discarding documents that contain personal or financial information make sure you shred them before disposal.

3) Report lost or stolen checks and debit or credit cards immediately.

The faster your financial institution knows about a potential issue, the faster they can lock the account and prevent any losses.

4) Monitor your transactions online regularly and report suspicious charges promptly.

One way to protect yourself is to create account alerts so you will be notified of withdrawals and deposits to your account and suspicious card activity.

5) Identify impostors.

Scammers often pretend to be someone you trust, like a family member, a charity, or your financial institution. Don’t send money or give out personal information unless it is a planned event, especially if they are asking for a wire transfer. These transfer make it nearly impossible to get your money back in the case you were the victim of fraud.

If You Retire Before Age 65:

If you retire prior to age 65, you’ll likely get your health insurance from the Affordable Care Act Exchanges. Under the ACA, the government provides subsidies if your “income” falls between 100 and 400% of the federal poverty level ($16,000 - $64,000 for a family of two in 2017). 

The lower your “modified adjusted gross income” (MAGI), the higher the subsidy you’ll receive. 

While distributions from traditional IRA’s and 401(k)’s are included in MAGI, distributions from Roth IRA’s are not included in MAGI. Therefore, you could strategically withdrawal from a Roth IRA in lieu of your traditional IRA or 401(k) and receive higher government subsides. 

If You Retire at Age 65 or Later:

If you retire at age 65 or later, you’ll get your healthcare from Medicare. Here again, using Roth withdrawals to keep your MAGI down is beneficial. That’s because Medicare Part B premiums increase when MAGI exceeds $170,000 for married tax filers ($85,000 for single filers) and premiums continue to increase at MAGI levels above these baseline thresholds. 

Therefore, withdrawing from a Roth in lieu of a traditional IRA or 401(k) can keep premiums lower. 

Your premiums are based on the MAGI you had two years before the premium year so, plan ahead!

How Do I Plan Ahead?

1)     Maximize (within your budget) your Roth IRA contribution

2)     If you are unable to contribute to a Roth due to the income phase-out, consider converting a portion of your traditional IRA to a Roth IRA

3)     With the help of a tax advisor, utilize the Roth IRA for retirement withdrawals to keep healthcare premiums from increasing

Investing is important.

But it can also be complicated and intimidating. Here are a few things you should know.

1. Save now!

Investment returns are only valuable if you consistently contribute to your retirement savings. Make sure you defer enough to get your employer match (free money!) and try to increase your contribution each year.

2. Take advantage of retirement accounts.

The most impactful decision you can make is to utilize tax-advantaged plans available to you through your employer.

3. Allocation: Don’t over-complicate things!

The important thing is to invest early and often. A simple market tracking index fund will do the trick. Don’t try to pick stocks. Index funds have averaged exceptional returns over the past 8 years by simply betting on the market.

4. Fees.

Watch out for trading costs and other fees. Passive index funds with low fees are trending recently and we like them too!

5. Risk tolerance.

Essentially, this refers to your ability to tolerate a certain level of variance in your investment returns. Investments like U.S. Treasuries and cash are indicative of a conservative risk tolerance whereas investments in bonds and equities are moderate or aggressive.

Consistently contributing to a retirement account is vital for a successful retirement plan. Using Votaire you can discover if your projected savings at retirement will accommodate your desired lifestyle. Make sure you are preparing for tomorrow, today!

Credit monitoring giant, Equifax, revealed last week that a massive data breach occurred on or before July 29^th They are still investigating the cause of the breach to prevent any further damage or future attacks, but the security gap that allowed the intrusion is still unknown.

The data exposed in this attack was massive and sensitive. 143 million consumers, mainly from the U.S., were potentially impacted by the breach. The hackers accessed names, Social Security numbers, birth dates, addresses, as well as credit card numbers.

So what can you do to protect yourself?

At this point it is best to assume your information has been compromised and take proactive steps in protecting your accounts. Follow these steps to get ahead of the risk:

1. Check your credit reports.

You can do this or free by visiting www.annualcreditreport.com. Accounts or activity that you don’t recognize could indicate identity theft. If you see suspicious activity visit IdentityTheft.gov to find out what to do.

2. Monitor your existing credit cards and bank accounts closely.

Look for charges you don’t recognize and notify your bank immediately if you spot any discrepancies. You should check your accounts in detail at least once a week.

3. Consider placing a credit freeze on your files.

A credit freeze makes it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts. If you plan to shop for a car loan or a home loan any time soon, you probably shouldn’t do this, because security freezes lock credit report files so no one — not even you — can open a new credit account in your name.

4. Place fraud alerts on your files.

If you decide against a credit freeze, consider placing a fraud alert on your files. A fraud alert warns creditors that you may be an identity theft victim and that they should verify that anyone seeking credit in your name really is you.

With a data breach of this magnitude it is important to look after yourself. Being proactive and safeguarding your information to the best of your ability is more important now than ever.

Healthcare is one of the chief variables in the retirement equation.

It’s also one of the most confusing and misunderstood costs in retirement. We’ve summarized some of the need-to-know information.

1. Lifestyle choices.

Of course exercise and diet are quite important for your health.Tobacco use and alcohol consumption are additional factors to consider. Studies have shown that a healthy lifestyle will significantly lower your overall healthcare costs, especially during your retirement years.

2. Family history.

Many diseases are genetic, meaning if your relatives have a disease you may be more likely to encounter the same issues at some point in life. Heart disease, diabetes, and mental illness are a few examples. Understanding your family history and taking steps to lower your risk for genetic disorders is an important step in lowering your financial risk relating to healthcare.

3. Location makes a difference.

Healthcare costs can vary wildly from zip code to zip code. Costs generally fluctuate by location for various reasons including drug and crime rates, quality of care available and population.

4. Your employer’s healthcare plan.

Employer sponsored plans vary significantly in coverage and cost. It is important to understand the nuances of your choices to ensure you have the optimal coverage. Discuss your plan with your Human Resources manager if you are confused about your options.

Ultimately, you need to be aware that there can be significant variances in costs for two people of similar health. Your location, employment, income and genetics all play a role in your healthcare. Maintaining healthy behaviors is the best way to combat negative influences.

Many employers are looking for employee financial wellness tools.

Yet, no matter how great the solution, they will not get value if their people don’t use it.

At Votaire, we pay special attention to getting users engaged with our financial planning platform. This effort pays off. Plan sponsors know that usually no more than 5% of employees utilize the financial wellness tools made available to them.

Plan sponsors with Votaire get a much higher rate. Take for example National Bank of Indianapolis. This employer recently on-boarded Votaire. In just three months, 30% of all employees entering the retirement plan website, created Votaire accounts. And that’s just a start!

It’s clear that our user-friendly design and personalized rollout (which includes in-person, on-site education) works.

With four out of five employers reporting that employees’ personal finance issues impact their job performance in a noticeably negative manner, why not learn about our solution?

Contact us at contact@votaire.com.

Once you turn 65, there is a 70% chance that you will need some form of long-term care.

Long-term care refers to the help individuals with chronic illnesses or disabilities need to cover their daily activities over a long period. (Think nursing home or adult day care).

This type of care is extremely expensive. A quick calculation shows that it can easily cost you more than $200,000.

Many retirees wrongly believe that Medicare will provide assistance with these costs. But it only does so if you require skilled services or rehabilitation from a specific injury. Even then, Medicare rarely covers more than 22 days of nursing home care. ¹

Medicaid does pay for long-term care services, but in order to qualify, your income must be below a certain level and you must meet minimum state eligibility requirements. These requirements vary from state to state. Regardless, the ugly truth is that you often must be broke before Medicaid steps in to help.

So what should you do?

Long-term care insurance is one potential solution. There are various forms of coverage that range from home services-only to full nursing home care. Policy costs differ based on age at the time of purchase, policy type and coverage. The policy will provide a daily benefit amount that covers your costs up to a specified lifetime maximum amount, unless your policy includes lifetime guaranteed coverage.

Currently, a 55-year-old male can purchase a policy that covers $200 per day for 3 years of coverage and will pay an annual premium of $2,070. The maximum benefit under this policy is $219,000.

Since females typically live longer, the equivalent policy for a woman would cost $2,536 annually.²

Regrettably, the cost and care of aging retirees often falls to a spouse, children or other relatives. Understanding potential long-term care risk is vital to creating a proper retirement plan. And by preparing today you can avoid wiping out your retirement assets and leaving a financial and emotional weight on family members.

¹ U.S. Department of Health and Human Services, https://longtermcare.acl.gov/

² Genworth, https://www.genworth.com/about-us/industry-expertise/cost-of-care.html

Yet another couple has realized their goal of retiring in their 30s. In his blog, Root of Good, Justin McCurry discusses how he and his wife Kaisorn afforded such an early retirement, despite raising 3 kids, by saving 70% of their income (congrats to them on that feat) because the 4% rule supposedly said they could. To the McCurry’s…good luck; you’re going to need it. Take a look at these three reasons why relying on rules of thumb for such an abnormal retirement situation is a terrible idea.

1. The 4% Rule is made for 30 years of retirement, not 55+.
2. William Bengen’s 4% Rule is out-of-date and isn’t applicable to today’s investment environment.
3. Unexpected and unavoidable expenses can quickly erode wealth.
4. The 4% Rule isn’t Suited for 55+ Years of Retirement.

In William Bengen’s original article, he notes that a 4% asset withdrawal should be sustainable over 30 years. Beyond 30 years, however, that’s not true. Assuming Justin and Kaisorn are both 37 years old, their joint life expectancy is over 55 years, effectively meaning we can expect at least one of them to live past age 92!

In Justin’s defense, he does mention in one comment that Bengen found a 3% withdrawal rate (which is closer to what they’re withdrawing) to be sufficient for 50+ years. However, as mentioned below, that’s not applicable to today’s investment environment, and it’s far from a perfect calculation. Furthermore, the McCurry’s won’t be receiving much of a Social Security check even once they reach eligibility since they’ve worked so few years. This means they’re stretching their investments without much of a backup plan.

The 4% Rule is out-of-date.

William Bengen’s Four Percent Rule was published in October of 1994. Though it was much better than the leading research at the time, today’s environment isn’t the same. In fact, retirement researchers Wade Pfau and Wade Dokken put a more relevant withdrawal rate at 1.26%, and that’s for only 40 years!

The 1.26% withdrawal rate assumes a 5% failure rate and a 60/40 stock/bond allocation. As risk level rises and percent of one’s portfolio invested in stocks rises, the sustainable withdrawal rate rises but never nearly as high as 3%.

Unexpected and Unavoidable Expenses can Quickly Erode Wealth.

The research upon which the McCurry’s based their retirement strategy doesn’t say anything about expenses; it focuses solely on account balance. Let’s say (God forbid) a family medical emergency forces large expenditures over a few years. The silver level ACA plan they elected may not prevent them from dishing out some large sums. The McCurry’s also have three kids—what about college? Suppose a client of Justin sues over bad advice he received—what then? Rules of thumb don’t account for any of these.

Finally, healthcare is expensive. Justin mentions the 94% “discount” the family will receive on their healthcare premium, but that could all change within the next four years. Even once Medicare hits, out-of-pocket costs, MediGap or Medicare Advantage plans can quickly get expensive.

The savings strategies the McCurry’s follow may be good advice, but following a rule of thumb to retire in one’s early 30s certainly isn’t.

An annuity is simply a contract between an individual and an insurance company.

In its simplest form an annuity consists of two steps:

1) An individual agrees to pay an insurance company an up-front premium, and

2) The individual begins receiving regular payments from the insurance company for the rest of their life.

There are countless variations to the above stated example. As such, annuities are often stigmatized as complicated and difficult to understand. Many are. But at its core this is how an annuity functions and for many people incorporating an annuity into their retirement plan makes a lot of sense.

As retirement approaches people are forced to face complicated questions. One of those usually goes something like this:

“How do I turn this pile of money I saved during my 30+ year career into a reliable income stream that will last the rest of my lifetime?”

One answer is via an annuity. By providing a one-time lump sum payment to an insurance company, you can erase the possibility of ever running out of money during your lifetime and benefit from the security of a predictable income stream, free from market volatility.

This guaranteed income stream and protection from risk create the foundation for why you should include an annuity in your retirement strategy.

In his December 21 blog, Ken Steiner proposes an “Actuaries’ warning label” on systematic withdrawal plans (SWPs). While disclaiming that his opinions don’t represent the entire actuarial profession, he does call for some support from his fellow actuaries. Here at Votaire, our actuaries are 100% behind Mr. Steiner in his opposition to SWPs.

Generalized withdrawal principles and SWPs just aren’t relevant, anymore. To Steiner’s point, they certainly don’t classify as “retirement spending strategies,” as Dr. Wade Pfau hinted at in his December 20 article. To accurately plan your retirement, you’ll need a truly holistic retirement spending plan.

As Steiner mentions in his blog, other assets and income streams should be considered in any retiree’s spending strategy, be it Social Security, an annuity, or a reverse mortgage. Not only do the amounts of these cash flows affect your spending budget, but when they occur also plays a big role.

For example, if you retire at age 65 and can delay your Social Security benefits until age 70, you may be able to withdraw more from savings during those first five years to cover the deficit and smooth out your income streams.

Negative cash flows play a big role, too. Your SWP isn’t going to account for the high healthcare costs you could easily accrue 20 years into retirement. You’ll need a holistic look at your personal situation to determine how much you can afford to spend each year and how much you need to reserve for the future.

Votaire’s dynamic and holistic financial planning platform looks at your specific situation. We use your known and unknown assets and liabilities to come up with actuarial projections for your income and expenses throughout retirement. Forget the SWPs—we have the know-how and the power to help you plan along the way.

Veterans enrolled in the Department of Veterans Affairs (VA) are eligible to receive health benefits provided by the government, given the period of service lasted 24 continuous months or for as long as called to active duty. Separation for reasons other than dishonorable discharge may also provide qualification, so the VA encourages all veterans to apply in order to see whether or not they are eligible.

Priority Group Status:

The VA employs a priority group system used to designate the status of an individual enrolled for healthcare through the VA. Priority Groups 1-3 are typically those who received a VA disability rating, former prisoners of war, or Purple Heart or Medal of Honor Recipients. Priority Groups 4-8 are comprised of veterans holding a variety of designations based on medical conditions, combat status, environmental exposures, and income. You can read more about priority statuses at the VA’s website.

Coverage:

Every veteran with health benefits gets a comprehensive benefits package that includes preventive, primary/specialty care, and inpatient/outpatient care services. A number of specialty services can also be accessed depending on the individual’s circumstances, including vision, dental, mental health, and more. 

Medicaid is a government-funded program, similar to Medicare, aimed at covering the medical costs of low-income individuals or families. While originally it only covered low-income senior citizens, the federal government now mandates the coverage for low-income earners who also fall into one of these categories:

·        Children under the age of 18 whose family is classified as low-income

·        Pregnant women

·        Most senior citizens and those with disabilities who qualify for Supplemental Security Income (SSI)

While Medicaid is in part a federally funded venture, the guidelines outlined by the federal government are very broad in nature, leaving a lot of the planning up to the state governments. Because different states’ rules can vary significantly, it is important to understand the Medicaid rules where you live.

Certain medical procedures must be covered by your Medicaid program. These include:

·        Doctor visits

·        Inpatient and outpatient hospital services

·        Mental health services

·        Prescription medication

·        Prenatal care and maternity care

·        Preventive care

Other services, such as dental or vision for adults, are left up to the individual states to decide whether or not it will be covered.