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Chris Hobart on WBTV!

Early this week Chris sat down with WBTV’s Brody O’Connell to discuss one of the most important topics this time of year…TAXES!!! Check out the clip below for some helpful tips! Thanks for keeping us in the loop Chris!!

Chris Hobart WBTV 3.29.2015

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Love and Marriage

As the song goes, “love and marriage go together like a horse and carriage.” Interesting then, that if you don’t put the horse in front of the cart, things go awry. Perhaps it is the same with relationships.

Only about half (50.5 percent) of Americans ages 18 and over were married in 2012, which is a significant drop from nearly three-quarters (72.2 percent) in 1960. However, 70 percent of American adults confirmed they were in a committed relationship of some sort.

[CLICK HERE to read the article, “5 facts about love and marriage,” at Pew Research Center, Feb. 14, 2015.]

As the traditional transition of romantic relationships into marriage continues to shift, so too does the conversation regarding gender roles, both in and outside the home.

Gender disparity continues to persist in the professional world. The degree however, depends upon your perspective. In one study, 72 percent of male senior executives agreed that much progress had been made toward women’s empowerment and career progression. However, among female executives, about the same percentage (71 percent) disagreed with that statement.

Stereotypical roles of men and women still run quite deep, regardless of how far society progresses. In short, while people often theoretically support the advancement of women, perceptions of women in the work environment show there is an underlying bias. This is evidenced in a Fortune magazine research report that analyzed how men and women were labeled in personnel reviews: 76 percent of feedback on women included descriptions like “abrasive,” “judgmental” and “strident.” Only 2 percent of reviews on men included those types of comments.

[CLICK HERE to read the article, “How men and women see gender equality differently,” at World Economic Forum, Feb. 11, 2015.]

Well-defined expectations for the roles of men and women start long before they enter the workforce. One survey of Harvard Business School graduates found that once they entered marriage, half of the men thought their career would take priority over their wives’, and 75 percent of male graduates assumed their wife would take on most of the responsibility of child/caregiving. The female Harvard Business School graduates did not share these beliefs, with half of the women saying they believed their careers would share equal importance with those of their spouses.

And why not? In 38 percent of U.S. marriages, the wife earns more than her husband. If you eliminate the marriages in which the husband doesn’t work at all, 29 percent of women earn more than their husbands. While it is well-documented that wives still shoulder the greater burden of household chores in two-earner families, it’s interesting that this gap is even wider among households in which the woman earns more. Why? Researchers believe she’s trying to overcompensate on the home front so her husband won’t feel threatened. Unfortunately, the increased strain of working “double-duty” can also lead to challenges in marriage, increasing the statistical likelihood of divorce.

[CLICK HERE to read the article, “How Many Women Earn More Than Their Husbands?” at FiveThirtyEight.com, Feb. 5, 2015.]

[CLICK HERE to read the article, “Wives who earn more than their husbands, 1987-2012,” at U.S. Bureau of Labor Statistics, March 24, 2014.]

As a country, we don’t make it easy for either working spouse to be an attentive parent. In fact, of the 185 countries and territories compared in a Geneva international law review, the U.S. was one of only three (the other two being Oman and Papua New Guinea) that do not require companies to offer paid maternity leave. Additionally, nearly 50 percent of American dads say they don’t get to spend enough time with their children. In countries that promote paid paternity leave, studies have found that a dad who takes two or more weeks off after the birth of his child becomes more involved in changing diapers, feeding and bathing the infant nine months later than a father who doesn’t take leave. It also helps with the future household income; in Sweden a mother’s income rose 7 percent for every month of leave her husband took.

Unfortunately, studies also confirm what we already know about moms who take time off work to have children: When Dad takes family leave, his immediate earnings can suffer, in addition to experiencing a higher risk of getting demoted or disciplined.

[CLICK HERE to read the article, “How Everyone Benefits When New Fathers Take Paid Leave,” Think Progress, Feb. 13, 2015.]

[CLICK HERE to read the article, “U.S. Paid Family Leave Versus the Rest of the World, In Two Disturbing Charts,” at Think Progress, July 31, 2014.]

Love, marriage, family…it’s a lot to balance. Whether you see any of these factors playing out in your life or the lives of your loved ones, we can help you develop and monitor a financial strategy that can help provide confidence in your family’s future.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Consumption

In society, consumption means a variety of things. Economically speaking, the term refers to the purchase of consumer goods. In ecology, consumption refers to the natural food chain. And finally, the antiquated definition of consumption refers to tuberculosis — the infectious disease of yore.

Today, we generally speak of consumption as a positive economic force. After years of high unemployment and low consumer confidence, people are finally building a financial foothold and beginning to spend money again. Of course, like the disease, consumption can become infectious to the point that it leads to over-spending and living beyond one’s means. Then, too, exuberant consumption can lead to a greater schism in wealth inequality, because some people can afford to spend more discretionary income while others would be wise to save it.

Recently, at least one retailer claimed that if we don’t spend beyond our needs, the overall economy will suffer. As voices call to limit consumer spending and over concerns for over-consumption of ecological resources, the head of the world’s second-largest fashion retailer said the poor will suffer most if we decrease consumption. Instead of limiting typical buyer behavior and possibly leading to higher prices and loss of jobs, he advocates that companies be more innovative in their raw materials and manufacturing.

[CLICK HERE to read the article, “CEO of H&M: reducing consumption will create a social catastrophe,” from The Guardian, Feb. 3, 2015.]

The reality is that consumer consumption is critical to our economy, representing approximately 70 percent of U.S. economic activity. In the final quarter of 2014, it was the driving force behind GDP growth, which increased by more than 4 percent. A big part of recent consumer demand has been for imported goods, which reached an all-time high in December as U.S. companies imported $48.8 billion worth of consumer goods.

[CLICK HERE to read the article, “The Good News Behind GDP’s Decline,” from Guggenheim Partners, Feb. 5, 2015.]

Increased consumer demand is attributed largely to progress in the job market. Employment improved with the biggest three-month gain in 17 years and the highest wage increase since 2008. One of the key indicators is that people who previously dropped out of the job market are now back in: In January, 1.05 million people entered the labor force and 759,000 found work.

[CLICK HERE to read the article, “Jobs Report Crushes It,” from Bloomberg, Feb. 6, 2015.]

Now that we have jobs and confidence, it’s a good time to consider the value of discipline in the face of prosperity. It’s easy to consider cutting back on spending when you have no choice; much tougher when you have more discretionary income. In fact, new research has found that this lesson is retained much better when first taught in high school. Currently, 22 states require students to take an economics course. A new study found that high school students required to take personal finance in high school had higher credit scores and fewer credit delinquencies than students in states without this mandate. In fact, three years after high school, the enlightened graduates had significantly higher credit scores — up 11 points in Georgia, 16 points in Idaho and 32 points in Texas.

[CLICK HERE to read the article, “New Findings About Kids and Money That Your School Can’t Ignore,” from Time, Feb. 6, 2015.]

While presently high consumption is positive news, we must monitor it carefully within our own lives to help ensure it does not adversely impact our total financial picture. As always, we’re here to help you create financial strategies with your future in mind.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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The Power of Confidence

In January, American consumer confidence reached an 11-year high. The University of Michigan consumer sentiment index rose to 98.1, up from 93.6 in December, which is the highest level since January 2004.

Thanks to lower gas prices, more people said they are likely to buy a car than in any other time in the last decade. Folks also indicated they were back in the market for big-ticket household items — which may well need to be replaced by now — such as a washing machine or vacuum cleaner.

While the job market remains at an uptick, workers today admit they still feel less secure about retaining their jobs than workers did back in the late 1970s. They fear not just losing their job — but not being able to find a comparable job if they did. Alas, although the economic recession technically ended more than six years ago, its scars still run deep.

[CLICK HERE to read the article, “Consumer Sentiment Brightened in January to 11-Year High,” from Bloomberg, Jan. 30, 2015.]

[CLICK HERE to read the article, “Worker’s expectations about losing and replacing their jobs: 35 years of change,” from U.S. Bureau of Labor Statistics, January 2015.]

With those levels of remaining uncertainty, it’s no wonder our economy has moved so slowly to recover. Confidence plays a tremendous role in everything we do. Whether competing in sports or just trying to accomplish goals in daily life, how you feel about your chances for success can help tip the scales one way or another.

For example, a psychology study from Ohio State revealed that a person’s level of self-confidence can influence his career path. Another recent study found that female STEM students (who study science, technology, engineering or math in college) exhibit far less confidence in the classroom than male students, possibly contributing to the comparatively low proportion of women who pursue STEM careers. Really, for all workers, a lack of self-assuredness may lead to less confidence when negotiating a job salary and may ultimately mean a lower lifetime income.

[CLICK HERE to read the article, “Study: Self-confidence Plays a Crucial Role in Forging Your Career Path,” from Fast Company, accessed Jan. 30, 2015.]

[CLICK HERE to read the article, “Female programmers are less confident than male programmers,” from IT World, Jan. 12, 2015.]

[CLICK HERE to read the article, “5 Reasons Why You Should Negotiate Your Salary, Every Time,” from The Huffington Post, Jan. 21, 2015.]

Perhaps with the improving job market and some salary negotiation training, parents will soon be able to kick their young adult children out of the nest. Recent analysis shows that 11.5 percent of baby boomers live in households with children under age 18, but more than 30 percent live in households with children of any age. This not-so-empty nest phenomenon also holds true for seniors (1 percent vs. 12 percent).

On one hand, young adults may lack the confidence to move out on their own given the high levels of unemployment and economic uncertainty they’ve witnessed since graduating from college. On the other hand, now that they’re settled into an adult routine at home with the luxuries of on-site laundry and every cable channel known to mankind, who wants to move out to prepare meals, spend an hour each week at a laundromat or give up programming on ESPN, TNT or CNN?

However, for older adults that need to get back to the business of saving for retirement, one less on-site mouth to feed can make a difference. And not having to support another adult under your roof can help bolster your confidence to meet retirement income goals. If we can help raise your confidence in your retirement income, please contact us today.

[CLICK HERE to read the article, “Children in the Household by Generation, 2014,” from Demo Memo, Jan. 28, 2015.]

[CLICK HERE to read the article, “Intended for Millennials, Dish’s Sling TV Is a Cord Cutter’s Dream,” from NPR, Jan. 26, 2015.]

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Retirement Income Tips

A lot goes into retirement income planning. You have to estimate how much you’re going to spend years from now, when sometimes it’s difficult to know what you’re going to spend this year. Cars break down. The roof leaks. The furnace needs to be replaced. Life is a cornucopia of who-knows-what will happen next.

In addition to knowing what you’ll need once the paychecks stop coming in, you’ll need to consider what tax bracket you’ll be in. You’ll need to project how your assets will fare from now until and through retirement. Yet if there’s one thing we know, it’s that we can’t predict the markets and we can’t rely on historical performance to repeat itself.

[CLICK HERE to read the article, “Winging It in Retirement?” at The Center for Retirement Research at Boston College, Jan. 22, 2015.]

Then there’s the issue of health. Some people are fortunate and suffer only the minor aches and pains of getting older. Others develop more serious chronic conditions, both mental and physical. Taking screening tests and conducting a comprehensive family history can help spot genetic predispositions to certain conditions. But even then, some people who are predisposed go unscathed, while others with no genetic markers acquire some unsuspecting ailment that changes their retirement plans.

[CLICK HERE to read the article, “Careful planning can ease retirement’s health costs,” at CNBC, Jan. 20, 2015.]

This income planning process for retirement can seem bleak, but perhaps it’s only a matter of approach.

Remember when you saved for your first car, or your first home? Even just saving for a deposit, first and last month’s rent before you could move into your first apartment may have seemed insurmountable. But you did it, eventually, and it felt great. Like freedom. Life was yours for the taking, and you were in control.

[CLICK HERE to read the article, “‘Intergenerational’ retirement home sees students live alongside the elderly,” at CTV News (Canada), Dec. 7, 2014.]

[CLICK HERE to read the article, “What to Know about Money and Work by 50, 60, 70,” at NextAvenue.org, Jan. 6, 2015.]

You can approach retirement income planning in a similar way. It’s just another one of life’s great adventures, and the more you focus on the strategy, the more in control you may feel. Regardless of market volatility, job insecurity, emergency expenses and health concerns, the more you prepare for unexpected adverse events, the more contingency options may be available to you. Like so many other things in life, some variables you can control better than others.

[CLICK HERE to read the article, “Retirement planning isn’t just about the money,” at CNBC, Jan. 21, 2015.]

[CLICK HERE to read the article, “Plan for a Long Life When Saving for Retirement,” at Kiplinger, February 2015.]

It’s important to plan for the long term through healthy choices. In this way, retirement income planning is similar to lifestyle choices. Let us help you devise a strategy designed to support your unique situation.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not permitted to offer, and no statement contained herein shall constitute, tax, legal or accounting advice. Be sure to speak with qualified professionals before making any decisions about your personal situation. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Chris Hobart to be featured on WCNC for International Women’s Day 2015!

Don’t miss Chris Hobart on WCNC-TV New Channel 36 Sunday, March 8 at 7:40am with the wonderful Amy Cowman WCNC for his ‪#‎makeithappen‬ financial tips segment in honor of International Women’s Day! He will be joined by a very special guest!!! DON”T MISS IT! ‪#‎womensday‬ ‪#‎IWD2015‬‪#‎PaintItPurple‬

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Wage War Wages On

The hacking incidence at Sony may have hurt actor Seth Rogen and the release of his film, “The Interview,” but it was a boon for actress Charlize Theron. After leaked emails revealed her male co-star Chris Hemsworth was being paid $10 million more than her in their film, “The Huntsman,” she successfully renegotiated equal pay for equal work — the longtime behest of gender equality activists.

[CLICK HERE to read the article, “Charlize Theron Negotiates $10M Raise after Sony Hack Reveals Male Costar Was to be Paid Millions More,” from Think Progress, Jan. 12, 2015.]

A recent study revealed the extent of geographical reach of unequal pay among men and women. In every state in the U.S., men make more money than women. Among the wealthiest women, the vast majority acquired their wealth as relatives of wealthy men. 

[CLICK HERE to read the report, “Men make more money than women in every single state across the U.S. — with Louisiana’s $16K gender wage gap being the widest,” from DailyMail.com, Jan. 15, 2015.]

In Washington, the debate over raising the national minimum wage is expected to continue. Critics argue that a mandatory increase, on top of the employer health insurance mandate, would be devastating to businesses and a major setback in unemployment levels.

However, the Peterson Institute for International Economics recently tackled the question of whether raising the pay of low-skilled workers at large corporations can lead to higher productivity. It reports a plethora of advantages, including lower turnover, less absenteeism, less supervision, better health, improved productivity, attracting more high-quality candidates with higher IQs and a better fit for the job, more inventory knowledge and higher customer satisfaction.

[CLICK HERE to read the article, “Higher Wages for Low-Income Workers Lead to Higher Productivity,” from The Peterson Institute for International Economics, Jan. 13, 2015.]

Another topic heatedly debated in Congress is the employer mandate imposed by the health care law. Many legislators are seeking to change the Patient Protection and Affordable Care Act’s definition of a full-time employee to one who works 40 hours per week instead of 30. However, according to the Commonwealth Fund, this change would mean twice as many workers may have their work hours reduced and shift more workers to either Medicaid or the health care exchanges, which would increase the federal deficit by an estimated $73.7 billion over 10 years.

[CLICK HERE to read the article, “Why Changing the Definition of Full-Time Work Under the ACA Will Put More Workers at Risk and Increase Federal Spending,” from The Commonwealth Fund, Jan. 24, 2014.]

In his new book, “American Dreams: Restoring Economic Opportunity for Everyone,” Sen. Marco Rubio, R-Fla., proposes transforming the way the Earned Income Tax Credit works. Rubio believes the credit isn’t effective because it’s paid as a one-time lump sum, which many people then spend on something frivolous. He recommends the credit be doled out in equal increments via a worker’s paycheck, essentially increasing his take-home pay throughout the year.

[CLICK HERE to read the report, “Sen. Marco Rubio charts conservative solutions to vexing problems in ‘American Dreams’,” from Tampa Bay Times, Jan. 11 2015.]

While income inequality may be a hot topic in America, another issue we should concern ourselves with is making sure our net worth accumulates over time, and leveraging the assets we do have. Earning a higher salary as we get older and acquire more skills and experience is all well and good. But the key is to utilize financial strategies that can help ensure our retirement income will last as long as we do. As always, we’re here to help you do just that.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not permitted to offer, and no statement contained herein, shall constitute tax, legal or accounting advice. Be sure to speak with qualified professionals before making any decisions about your personal situation. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Political Environment: The Battle Begins in Earnest

The economy is in good shape for starting a new year, but lines have already been drawn in the sand where our political engine is concerned. Republicans have a long list of pent-up priorities, including the Keystone Pipeline, repealing portions of the Patient Protection and Affordable Care Act and reversing the president’s executive action enabling about 5 million undocumented immigrants to remain in the U.S.

Though wielding somewhat less power, Democrats and the administration will continue to focus on tax reform, infrastructure funding and foreign trade.

[CLICK HERE to read the report, “CIO Outlook: Themes for 2015 and Beyond,” from Merrill Lynch, Winter 2015.]

[CLICK HERE to read the article, “GOP agenda for Congress: Challenge Obama, prove they can govern,” from CNN.com, Jan. 6, 2015.]

[CLICK HERE to read the article, “With GOP Congress incoming, Obama plots his 2015 strategy,” from CBSNews.com, Jan. 3, 2015.]

Despite holding a majority in both houses of Congress, Republicans may have trouble overturning previous legislation. However, there are strategies available to help them. One is the budget reconciliation process, a one-time per year tactic that requires only 51 votes in the Senate as opposed to the 60 needed to overcome a Democratic filibuster. Note that this tactic may be used only for budget-related items. For example, it could repeal tax subsidies offered on the health care exchanges, but it cannot be applied to the individual or employer health care mandates.

[CLICK HERE to read the article, “Republicans eye reconciliation route in bid to repeal Obamacare,” from The Washington Times, Jan. 1, 2015.]

[CLICK HERE to read the article, “Republicans to Chip at Obamacare by Redefining Work Hours,” from Bloomberg, Nov. 7, 2014.]

Republicans may be able to successfully pass laws in both chambers of Congress, but the president has the power to veto, and he has confirmed that he will do so for any legislation that threatens the viability of the health care act. This may prove to be a challenging prospect for opponents, because to overturn a veto they must have a two-thirds vote in both the House and the Senate.

[CLICK HERE to read the article, “Obama on GOP Congress: I’ll probably need my veto pen,” from USA Today, Dec. 29, 2014.]

While the new dynamic in Washington is sure to make for interesting headlines this year, it’s important that we don’t become distracted by politics. When it comes to making our own financial decisions, some of the most important factors are our personal goals, tolerance of market risk and timeline for when we need money. Please contact us for help in making independent decisions this year.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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2015 Outlook

Last year left the U.S. in decent financial shape. Oil prices tanked and the U.S. dollar surged. Inflationary pressure is low, and the stock market ended the year strong. The analysts at Fidelity believe this positive environment should continue at least early into 2015. The economy is in a mid-cycle expansion with solid employment gains and wage increases – although not yet across the board – and the outlook for consumers is good.

[CLICK HERE to read the article, “December 2014 Market Update,” from Fidelity, Dec. 12, 2014.]

[CLICK HERE to read the article, “Five themes for 2015,” from Fidelity, Dec. 23, 2014.]

Over at Merrill Lynch, analysts are similarly positive. They expect the economy to expand by 3.3 percent in 2015, energized by consumer spending now that individual debt has been reduced. On the job front, analysts expect the economy to generate around 240,000 jobs a month and the unemployment rate to continue dropping.

[CLICK HERE to read the report, “CIO Outlook: Themes for 2015 and Beyond,” from Merrill Lynch, Jan. 2015.]

In the real estate market, housing prices are expected to continue rising but not at the same high growth rate as 2014. Thanks to predicted higher mortgage rates, there will be fewer buyers and the face of those buyers is expected to change. That’s because millennials (young adults under the age of 35) are projected to overtake Gen X (those 35 to 50 years old) as the largest group of homebuyers in the U.S. this year.

[CLICK HERE to read the article, “Housing Outlook 2015: 11 Predictions from the Experts,” from Forbes, Dec. 18, 2014.]

[CLICK HERE to read the article, “4 predictions for the housing market in 2015,” from Fortune, Dec. 9, 2014.]

In the world of technology, one expert offers a handful of predictions for 2015. Among them, email attachments will evolve into cloud-based links (largely for security reasons), tablets will experience a “surprise comeback” to outsell laptops and there will be a greater focus on security for all devices in the wake of the 2014 breaches at Target, eBay, J.P. Morgan, Home Depot, Nieman Marcus, P.F. Chang’s, Michaels, Goodwill and Sony.

[CLICK HERE to read the article, “Forecast: Workplace Trends, Choices and Technologies for 2015,” from Recode.net, Dec. 18, 2014.]

Within the health care sector, the new Congress is likely to take aim at targeted points of weakness in an attempt to block the implementation of parts of the Affordable Care Act. The Supreme Court is already on tap to hear one case concerning the law, and it could end up being a busy year for the legal system.

[CLICK HERE to read the article, “The Supreme Court Decides to Hear King v. Burwell: What Are the Implications?” from The Commonwealth Fund, Nov. 7, 2014.]

On the other hand, do-it-yourself health care appears to be a trend on the rise. Innovative wearable tracking devices, mobile apps and cost-savings due to increasing transparency in the medical field are all expected to gain momentum in 2015.

[CLICK HERE to read the article, “10 health care trends to watch in 2015,” from Employment Benefit News, Dec. 2014.]

[CLICK HERE to read the article, “Top Trends Influencing Healthcare IT In 2015,” from CXO Today, Dec. 24, 2014.]

It’s always an exciting time when we enter a new year. It’s an ideal opportunity to re-evaluate current plans, update them and/or make new ones. As always, if we can help in any way to assess your retirement income plans for today and help you feel more confident in tomorrow, please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products. Our firm is not affiliated with the U.S. government or any governmental agency.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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Where Does the Money Go?

In December, Congress passed the federal budget for fiscal year 2015 at the last possible moment, avoiding yet another government shutdown. You have to wonder why this is such a difficult process.

Within our own households, there are often two people — sometimes with diametrically opposed opinions on how money should be spent — who fight these battles and resolve them on a daily basis. Few families that have the resources available let things fester to the point where the mortgage or utilities go unpaid or they fail to shop for food. In other words, if we have the money, we would never let our household shut down while we argue over who gets a gym membership this year or who gets a new car.

[CLICK HERE to read the article, “What’s in the spending bill? We skim it so you don’t have to,” from The Washington Post, Dec. 10, 2014.]

Like most households, there are certain expenses that must be paid and are non-negotiable. Then there are those that are more subjective. In the finance world, we call that discretionary income. Once all the necessities are paid for, we get to determine how we want to invest or spend the excess money. Since the national budget is largely funded by taxes, many people and politicians believe that taxes should be cut and there should be no excess income. However, mostly politicians battle over where that excess funding should be spent, such as toward social programs, border patrol, the military or job growth. It’s a matter of establishing our country’s values and priorities.

[CLICK HERE to read the article, “What’s Ahead for Americans in 2015?” from Gallup, Jan. 1, 2015.]

Consider the long-term prospects of funding innovation versus social programs. Technology has enabled greater productivity and cost savings in manufacturing and now is making inroads into many service jobs. For example, a patient’s MRI can be sent digitally to be read by a highly skilled radiologist in Bangalore, India, for substantially less than one in New York. Eventually, computer software may be able to do this more accurately and even cheaper. So could funding innovation eventually reduce highly skilled jobs?

[CLICK HERE to read the article, “What happens when automation leads to job losses?” from World Economic Forum, Jan. 2, 2015.]

In the U.S., nearly 20 percent of our children live in poverty — the highest rate among all developed countries except Romania. Yet we spend more money educating wealthy children than poor children. Despite whatever circumstances land an adult in poverty, children are helpless victims and education can be the surest path to a better life. Not funding education opportunities for the poor creates a perpetual loop of more public expense, because impoverished children experience disproportionately higher rates of learning disabilities and poor health. With fewer people developing much-needed higher level job skills, our economy grows at a slower rate. So can less funding for education programs stunt our long-term economic development and global competitiveness?

[CLICK HERE to read the article, “Inequality and the American Child,” from Moyers & Company, Dec. 30, 2014.]

[CLICK HERE to read the report, “Income and Poverty in the United States: 2013,” from U.S. Census Bureau, Sept. 16, 2014.]

We, by default, must trust our political leaders to set our national values, and largely they do so by directing where funding should go each year. But within our own lives, each of us is the CFO of the household income and determines where our discretionary income goes. If we can help you set a more productive budget for this year — one that reflects your personal values and priorities — please give us a call.

Our firm assists retirees and pre-retirees in the creation of retirement strategies utilizing insurance products.

This content is provided for informational purposes only. It is provided by third parties and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference.

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