1500 Lake Shore Drive, Suite 400, Columbus, OH 43204

Life and Health

Regulatory Changes Affect Annuity Recommendations

By Life and Health | No Comments

A recent investment trend survey reports that financial advisors are changing the financial products they recommend to investors. This change primarily affects annuities and is caused by taxes and the fiduciary rule. If you own an annuity or are considering it as part of your retirement portfolio, understand how regulatory changes could affect you.

What is an Annuity?

An annuity is an investment tool that guarantees income for life. You may choose from five types of annuities.

  • Fixed – pays a set interest rate and is usually issued by an insurance company
  • Variable – account value changes based on the returns of the mutual funds the investor chooses
  • Indexed – variable interest rate is added to your contract value
  • Immediate – pays distributions right away
  • Deferred – earn fixed or variable interest and delays distributions by at least a year

Why the Change in Annuity Recommendations

According to the survey conducted by Financial Planning Association, the Journal of Financial Planning and Longboard Asset Management, financial planners are less likely to recommend fixed, variable and indexed annuities this year. The causes are taxes and the fiduciary rule.


Annuities are tax-deferred, which means you don’t pay taxes on contributions but will pay taxes on distributions. While this tax savings is attractive, it is not free. Capital gain distributions from annuities are taxed at a higher rate than ordinary income. You could pay more taxes in the long run when you invest in certain types of annuities.

Fiduciary Rule

According to the Department of Labor’s fiduciary rule, all financial professionals who work with or recommend retirement products are considered fiduciary and legally bound to meet ethics standards. Previously, only financial advisors who charged hourly or percentage fees were considered fiduciary.

This rule prompts financial planners to reveal accurate fees, taxes and other charges. While they don’t have to recommend only the products with the lowest fees, they can no longer recommend products that may yield high returns for them and lower returns for the investor, such as various types of annuities.

How Do These Annuity Changes Affect You?

Because of the taxes and fiduciary rule, financial planners are beginning to recommend investment options other than annuities. Those options include mutual funds, exchange-traded funds and cash equivalents.

While these options do not feature tax-deferral benefits like annuities, their capital gains are taxed at a lower rate than annuity distributions. Investors could receive more money per distribution when they select one of these options.

How to Navigate Annuity Changes

As an investor, you will want to talk to your financial planner about the regulatory changes that affect annuities. You may wish to pursue alternative investment options as you reduce your tax burden and maximize your savings.

How to Talk to Your Doctor

By Life and Health | No Comments

The Commonwealth Fund’s 2008 International Health Policy Survey reported that in the U.S.:

38% of study participants left the doctor’s office without getting important questions answered.

Only 53% said their doctor involved them in treatment option decisions. 41% said their doctor had not reviewed their list of medications in more than two years.

Each of the above problems can bring about serious health consequences. How do your plan members compare with these statistics? Is there a potential drug interaction crisis looming, with the potential to create an outlier cost for your company to bear? Below are a few tips you can share with your plan members to encourage open and detailed communication with their doctors.

Write down the names and the dosage of all the medications you take. Although you might feel that you have your medications memorized, it is not uncommon to confuse bits of data when you’re trying to pass the information along to your doctor. It is better to hand the doctor a written list so that he can quickly extract the data he needs.

Before you visit the doctor, think about topics you would like to discuss during this visit. For example, if you were diagnosed previously with high blood pressure, your doctor might have asked you to reduce salt intake, exercise more, quit smoking, and take an anti-hypertensive medication. Since he will be curious about your progress, make notes of what you plan to tell him.

Make a list of questions you would like to ask the doctor. You will be more able to think clearly about questions in the comfort of your home, than when you are sitting on an exam table and wearing a paper gown.

Arrive on time for your appointment. If you are anxious because you’re late, and the doctor is aggravated that he is running behind schedule, the lines of communication might not be open.

Be aware that your doctor is neither a miracle worker with a perfect solution to every problem; nor is he an adversary purposely ignoring your needs. He is a highly trained professional using his best judgment to guide you in both treatment options and preventive care. If you feel he is veering off course, speak up and be involved in guiding the conversation.

Don’t be discouraged if the doctor refers you to a nurse or physician’s assistant. These professionals are also highly trained and will often spend significant time explaining medical information to you.

Jot down new instructions as well as answers to your questions. It can be difficult to remember all that is said during an office visit, especially if you received unexpected news or information.

If you get home and realize you are confused about the doctor’s instructions, don’t hesitate to call the office. It is far better to get the information straight in your mind, than to make errors in your care or medication routine.

Pay your doctor bills. A medical office is a business, and if you fail to pay your bills, your relationship with your doctor can suffer. Overall, remind your members to be active partners with their doctors as they pursue both medical treatments and preventive healthcare.

Health Care Reform Bill Addresses the Nation’s Opioid Crisis

By Life and Health | No Comments

Opioid addiction is a national crisis that affects people in every state. In fact, 100 people across the United States suffer from drug overdoses every day. The health care reform bill addresses the opioid crisis in several ways.

The Opioid Crisis in America

Before learning how the health care reform bill addresses the opioid crisis, you must understand more about opioids. Opiods can include prescription pain-relieving medication such as OxyContin and illegal street drugs like heroin.

A total of 52,000 people across the U.S. died from drug overdoses in 2015. More than six in 10 of those deaths were caused by opioids. These overdoses and any drug abuse harm the victim, affect families and strain community resources.

Treatment options for an opioid addiction often start with a medically supervised detox followed by inpatient or outpatient care at a drug addiction recovery center. Recovery usually focuses on the physical, mental and emotional aspects of addiction and provides counseling, therapy and other assistance to addicts and their families.

Drug abusers typically use their insurance to pay for drug treatment. Without treatment, however, sufferers may end up in jail, in the hospital or homeless.

Health Care Reform Funds Drug Treatment Options

The U.S. Senate’s current health care reform bill designates $2 billion to the opioid fight. These funds include grants that equip states to offer treatment and recovery services to people who suffer from substance or mental abuse disorders.

Health Care Reform Supplements the 21st Century Cures Act

Passed in December 2016, the 21st Century Cures Act boosted funds for mental illness issues.

  • Approved $1 billion for opioid prevention and treatment programs with the majority of those funds supporting medication-assisted treatment therapies that curb a person’s urge to abuse drugs.
  • Included $4.8 billion in financial resources for the National Institutes of Health to perform additional drug addiction research.

Health Care Reform Revamps Medicaid

Under the new health care reform bill, Medicaid will move to a block-grant system. A block-grant system gives every state the same percentage of funds regardless of the state’s need. The fund amount is reevaluated every three years.

Currently, states receive Medicaid based on the number of poor people who live in their state. These people may be unable to afford traditional insurance and rely on the extra financial assistance Medicaid provides. Some states that opted to receive Medicaid funding under the Affordable Care Act spend as much as 61 percent of their Medicaid funding on substance abuse treatment.

The healthcare reform bill is poised to address the nation’s opioid crisis. However, the bill is still undergoing changes. Monitor the details as you track the available options and assistance provided to opioid abusers across the country and in your community.

Should You Consider Long-Term Care Insurance?

By Life and Health | No Comments

Chances are, you are like the majority of individuals who have reached middle age. The primary concerns in your life are paying your monthly bills, making sure your children receive a good education, as well as the all-important goal of saving some money every month for retirement. At this point, it seems a long way off, but do not be deceived; it will be here sooner than you think. You might have heard about Long-Term Care insurance, but you probably dismissed it with questions such as “What is it?” or “Who needs it?”

The answer is that you do, and so does everyone else. You might reply that you already have Health insurance. If you do, congratulations; it is hard to get in today’s political climate. The problem with most health insurance is that it does not cover what are known as custodial expenses. These expenses arise from custodial care, which is defined as the care needed as a result of the inability to carry out tasks relating to the following daily activities: bathing, dressing, eating, continence, toileting and transferring.

As people age, many of them find these basic tasks harder and harder to do without some form of help. The need for this type of care necessitates having Long-Term Care insurance, which can provide the monies necessary in order to hire and maintain the proper care needed. This is made even more necessary by the fact that people are living much longer, sometimes 20 or 30 years beyond retirement. Oddly, the fondest wish of these people is to remain independent. Fortunately, they can do so if they obtain Long-Term Care insurance.

The best time to do this is when someone is in their mid-forties, because that time of life is when insurance companies offer the lowest rates and premiums for their policies. Children can also purchase it for their aging parents. If they do not, there are two options left if something goes wrong, both of which are very unattractive. They either have to pay for the cost of their own income, or their parents have to pay for it out of their assets.

When you take into consideration the fact that this care routinely costs $75,000 and up annually, this is a tremendous burden to take on for either the children or the parents. Statistical research reveals that the average retired couple exhausts their savings in a matter of months when paying for care themselves. Even wealthy retirees find their money severely shrunk, which lives little for their children or grandchildren.

Long-Term Care insurance from a reputable and trustworthy insurance company can help retirees receive the care they need at a price they can afford both now and 20 or 30 years from now. Buyers must exercise the virtue of prudence when choosing a policy; each one comes with a set of circumstances and options to consider. After taking care of these, they are then free to enjoy the peace of mind that results from an effective Long-Term Care policy. Our professionals can help – call our office today!

Tips That Help Female Breadwinners Handle Life Insurance Payments

By Life and Health | No Comments

Several recent reports have discovered that the number of female breadwinners is growing. Women are largely unprepared to manage a large payout from a life insurance policy or inheritance, however. The results of these reports can motivate and empower you and the women you love to take steps toward financial confidence.

Female Breadwinners are on the Rise

According to the Center for American Progress, up to 42 percent of moms are the sole or primary breadwinner in their home, meaning they earn at least half of the family’s income. An additional 22 percent of moms are co-breadwinners earning between 25 and 49 percent of the family’s total income.

Female Breadwinners Feel Financially Unprepared

Despite their increased earnings, many women don’t feel prepared to handle an inheritance or other large financial gift reports RBC Wealth Management. With this money, a family could repay debt, save for retirement or contribute to a child’s college tuition, but they may squander it if they don’t have a sound financial plan.

How to Find an Inheritance

Based on the findings of these reports, women are encouraged to take steps to boost their financial confidence. They can handle a life insurance payment or other inheritance wisely with help.

Find a financial advisor.

If you don’t already work with a trusted financial advisor, make time to find one. He or she will be:

  • Trustworthy
  • Qualified
  • Certified
  • Sensitive

Interview several candidates before you choose one. This way, you can compare the commissions, ensure you’re on the same page and know that the person you hire will put your needs first.

Wait one year.

It’s smart to take your time and make thoughtful financial decisions. The money you receive can provide you and your family with substantial benefits for years to come if you plan wisely.

Prioritize your current and future needs.

You may consider buying a luxury car or dream vacation with your inheritance, but prioritize your spending. Balance current needs with future needs so you’re not part of the 70 percent of people who receive a windfall and are broke within a few years.

Take action.

With the help of your financial advisor, take action to spend your inheritance wisely. Ask for small, actionable steps that assist you in achieving your goals. When you have a specific and detailed plan that’s broken into small pieces, you feel less overwhelmed and more confident about managing your money.

Female breadwinners may be unprepared to handle a life insurance payment or other inheritance, but they can learn how to manage money successfully. Ask for help and take charge of your finances today.

How to Have a Fiscally Sound Year

By Life and Health | No Comments

There’s no time better than the beginning of the year to set some fiscal goals and create a plan for improving your financial situation. You are probably ready for a brand new beginning and the thought of sticking to a budget after the holiday spending spree might sound a little more appealing than it would at any other time of year. Here is a step-by-step guide to create some annual goals as well as a financial plan that will help usher in a whole new financial foundation for you and your family.

Step one: List your goals for this year. It is important to remember that this step involves setting goals that are specifically to be achieved this year. That could involve paying off credit cards or small loans, saving money for a large purchase at the end of the year, or reducing your monthly bills so you can reduce your hours at work. This step should be completed with your family so that you can all discuss the goals and prioritize them. That helps to keep you all involved in committing yourself toward the goal and makes financial sacrifices easier for everyone to make.

Step two: Create a household financial plan. Your financial plan should be comprehensive and should consider all the insurance you have, the deductibles you have, and the emergency savings you have. The plan should also outline your average monthly budget, your debt and your plans for debt repayment or reduction. The purpose of the plan is to help you to recognize any shortcomings you have in insurance and savings needs and to give you some idea of how practical and achievable your goals are.

Step three: Make a new budget. In this budget, you should compare your income to your fixed monthly expenses and then determine what portion of your extra income should go toward achieving your listed goals for this year, which to apply to your long-term goals, and how much to set aside for shoring up all the shortcomings you found in step two.

Step four: Make sure your investments are well diversified. Because a loss in your savings account, retirement account or college savings plan could adversely affect the budget and financial plan you have created, it is a good idea to make sure these accounts are all well diversified. By diversifying the assets you have, you create a layer of protection against losses.

For instance, if you are heavily invested in company stock and the industry you work in has a bad year, you could see your retirement account balance decrease significantly. While this may not equal a definitive long-term loss (since the stock could increase over the next few years) it will certainly shake your confidence and create perceived financial stress as you become unsure of whether or not your retirement savings will be enough.

Make sure to have a balance in all your accounts of fixed products, high risk investments and low risk investments as well as investments in difference industries.

The Proposed Trump Budget Affects Social Security Disability Insurance

By Life and Health | No Comments

President Trump’s proposed budget cuts could save taxpayers $72 billion over the next 10 years. Revealed in May, the budget contains several policy changes that could affect your access to social security disability insurance benefits.

The Social Security Disability Insurance (SSDI) program gives financial support to one in five or roughly 11 million Americans. The average social security disability insurance payment is currently $1,171 per month or $14,000 per year. Unfortunately, the program is fraught with overpayments and fraud. Trump’s proposed reform would address these issues.

Reforms Address Overpayments

The majority of overpayments resulted from benefit recipients who received both social security disability insurance and unemployment. In the new budget, beneficiaries would not be able to double dip. While receiving both benefits is not illegal, it did allow 117,000 American to receive over $856 million in 2010 alone with total overpayments amounting to $12.2 billion between 2005 and 2015.

Reforms Address Fraud

Trump’s proposed budget changes would also address fraud. Federal investigators uncovered repeated schemes where doctors issued phony diagnoses of physical or mental impairment that allowed beneficiaries to receive millions of dollars for which they were not qualified.

Additional Social Security Insurance Disability Reforms

In addition to addressing overpayments and fraud, the budget proposal includes several additional reforms.

    1. Limit retroactive benefits to six months rather than one year before the applicant’s official eligibility. There is currently a five-month waiting period built into the application process.
    1. Require applicants to prove that they tried to find a job before they filed for social security disability insurance.
    1. Mandate rehabilitation before recipients with back pain or arthritis can receive full disability benefits.
    1. Increase work incentives that encourage social security disability insurance beneficiaries to find a job, saving the program $50 billion in five years.
    1. Give administrative law judges a one-year probation period before promoting them to a lifetime appointment.
    1. Implement tougher measures that require facilitators of fraud to repay any overpayments.

Opponents criticize the proposed budget. They fear that the cuts will adversely affect eligibility and benefits for t he disabled Americans who need SSDI. They also cite the failure of previous return-to-work efforts implemented since 1980 and believe the changes benefit the wealthy and punish the middle class.

One spending watchdog group the Committee for a Responsible Federal Budget approves of the proposals. It believes a reform of the social security disability insurance system is necessary to secure the organization’s solvency for Americans in the future.

The Congress is currently debating President Trump’s proposed budget. Time will tell if the reforms will build a healthier social security disability insurance system. In the meantime, consumers can continue to draw on their benefits and report fraud as they improve the program for everyone

Avoid Common Mistakes in Employee Benefit Administration

By Life and Health | No Comments

Once annual enrollment has come and gone, it’s a good time to brush up on some basic benefit plan requirements, to avoid some of the common mistakes made in employee benefit plan administration. The following list of potential errors is by no means exhaustive, but represents a sampling of issues to steer clear of:

Keep your plan documents up to date and reference them in related plan communications.

ERISA requires that all employee benefit plans be maintained pursuant to a written plan document. As the governing document for the plan, it should be reviewed regularly, and amended if necessary, to keep up with new laws and regulations (such as health care reform). Since this will be the most detailed document regarding any given plan, it should be referenced in disclaimer materials included in less formal plan communications (such as annual enrollment materials) as the document that will control in the event of discrepancies, or errors or omissions in these other ancillary communications.

Keep summary plan descriptions (SPDs) up to date and distribute them to employees.

ERISA requires that employees receive an SPD covering each benefit plan, and specifies the information that must be included in the SPD. Plan vendors might supply booklets or other communications materials to distribute to employees that describe the plan, but these are unlikely to meet the requirements for an SPD. When plan changes result in an SPD needing modification, an employer might distribute a summary of material modifications in the interim before preparing an updated SPD.

Include only eligible employees (and dependents) in your plans, as to do otherwise will run contrary to plan documents and represent unnecessary coverage costs for your company.

Improperly covering ineligible individuals — contractors, leased employees, former employees, etc. — can be a costly proposition. Similarly, maintaining formerly eligible dependents who, for example, have aged out of the plan, unnecessarily adds to plan costs. Eligibility audits can help to mitigate this problem.

Follow plan terms in administrative practices.

The plan document governs, and both internal staff and outside administrators must follow the terms of the plan when making eligibility and claims decisions, issuing plan notices, handling appeals, etc.

Make sure plan contributions are calculated properly.

This includes taking into account the definition of compensation that is in the plan (which might include bonuses, commissions, etc.) and calculating matching and profit sharing contributions correctly.

If you allow employees to pay for any benefits on a pretax basis, a cafeteria plan is required.

Although the term “cafeteria plan” might conjure images of employees selecting from a menu of benefit choices, a cafeteria plan is, at its most basic level, a premium only plan, and is required to be adopted before employees can pay their health (or dental, vision, etc.) plan premiums with before-tax dollars, or to make before-tax contributions to a health care or dependent care flexible spending account.

If employees make salary deferrals to a 401(k) plan, these deferrals must be deposited into the plan trust on a timely basis, as by DOL regulation they become plan assets as soon as they can be reasonably segregated from the employer’s general assets.

Review your COBRA administrative practices to make sure all individuals qualified to elect COBRA coverage receive the proper notices, for all plans subject to COBRA (the health plan, but also the dental and vision plan, and the health care flexible spending account).

Administrative errors can result in fines and penalties, lawsuits, and employee discontent. An annual plan self-review can avoid these potential costly consequences of common mistakes.

Keep Your Eye on the Prize

By Life and Health | No Comments
Planning for retirement can sometimes feel like studying rocket science, but it doesn’t have to be so complicated. Throughout the last decade, economists and financial pundits have come up with “target numbers” to be used as way-points and objectives for upcoming retirees. At times, individuals have placed too much weight on these experts’ advice.

The financial landscape of America is changing constantly and retirement planning must evolve with it. Outdated advice and rigid financial guidelines will not prepare the millions of Baby Boomers who are nearing retirement age. Take a closer look at some of these antiquated suggestions retirement experts have been known to give and see why it no longer makes sense to aim for these “target numbers.”

Target Number – 70%

What does it mean? Individuals should plan on spending about 70% of what they currently make during their retirement years. For instance, a person who made a $100,000 salary during their working years should plan on spending $70,000 per year after retiring.

Why this is wrong: Life expectancy is on the rise, with the average person living past their 78th birthday. Retirees with pension plans don’t have much to worry about, but people with personally financed retirement funds, like 401(k)s and IRA accounts, run the risk of out-living their nest egg. Certainly retirement is a time of relaxation and enjoyment, so properly budgeting your finances is a must if you want to keep the party going well into your golden years. Do you have a medical condition that may require long-term care in the future? Or have your relatives lived exceptionally long lives? Take into account these and other relevant factors when determining your investment and post-retirement spending strategies.

Target Number – 4%

What does it mean? When considering the total amount a retiree has saved, individuals should spend 4% of that total each year during retirement, while keeping the remaining balance properly invested in stocks and bonds.

Why this is wrong: As the market rises and falls, one’s spending habits must do the same. Continuing to spend 4% while your portfolio is having a down year will quickly dry up your assets, while you might find yourself under-spending during times of high returns.

Target Number – 62

What does it mean? At the age of 62, individuals can begin to receive reduced Social Security benefits. The Census Bureau also reports that 62 is that average age of retirement in the U.S.

Why this is wrong: Reduced Social Security benefits may not supply the income necessary to retire on, with maximum available benefits coming at 70 years of age. Working a few extra years past 62 can also give you the income necessary to beef up your 401(k) plan or IRA.

Target Number – $1 Million

What does it mean? This is the target amount you should have saved before retiring.

Why this is wrong: Some economists are actually now saying that $1 million might not be enough to comfortably retire on. When Scottrade analysts where asked if $1 million were enough money for the average American family, more than 70% of them responded “no,” further explaining that $2 million – $3 million is now the target amount. Unfortunately, these numbers don’t agree with most Americans’ pocketbooks.

A recent study of individuals with self-managed retirement plans by the Employee Benefit Research Institute found that workers ages 55 to 64 were saving less than $70,000, much less than what Scottrade analysts feel is ideal.

Although these two numbers may not mesh, Americans always find a way to make do with what they have saved. Eliminating debt and avoiding unnecessary spending splurges is the best way to stretch your dollars while heading into retirement. Of course, keeping a close eye on your savings and maintaining a balanced portfolio always helps, too.

Five Health Care Options for Small Businesses

By Life and Health | No Comments

Some large companies offer great perks like paid gym memberships, flexible scheduling or company stock. You may not receive these perks as a small business employee, but you could be eligible for valuable health insurance. As many as 54 percent of small business owners choose not to offer health insurance because of the cost, though. Share information with your employer about five health care options for small businesses that help you get the insurance coverage you need.

    1. Private Small Group Plan

      Some insurance companies offer private small group insurance plans. The insurance company assesses the small business’s employees to determine risk, and then they create a plan that outlines the benefits they’ll offer and the premium cost per employee. This option gives small businesses greater opportunities to shop around as they find the best coverage and rates for their employees.

    1. SHOP Marketplace

      Small businesses with fewer than 50 employees may purchase insurance through the SHOP Marketplace. It’s operated by public federal or state exchanges although some states offer limited SHOP Marketplace options. Registered SHOP Marketplace brokers assist business owners in selecting and setting up the right plan for them. Small businesses receive tax credit for enrolling, but they are required to meet requirements, including premium contributions or enrollment percentages.

    1. Private Exchange

      A small business can contribute a set amount to each employee who purchases insurance through a private exchange. Employees may choose from several plan options. A broker works with employees to help them find and select the right coverage for their needs.

    1. Co-operative

      Co-operatives are a traditional way for small businesses to offer health insurance to their employees. Several businesses can work together to negotiate rates and benefits while lowering administrative and management costs. Employee participation is optional. Because each co-op is structured differently, some may offer better rates than other health care options for small businesses.

    1. Individual Health Insurance

      Small businesses may choose not to offer health insurance. In this case, choose the insurance you want when you buy individual health insurance. Talk to a broker or purchase a policy through the Marketplace, and select the insurance company, coverage and deductible you want. Some employers will give employees a defined contribution allowance that reimburses a portion of the premium cost. They choose how much to contribute as long as it’s within federal limits.

As a small business employee, your employer may not offer the health insurance you need. Share these health care options for small businesses and ask your employer to choose an option that fits your needs.  If you do already receive health insurance, compare other options to ensure you’re getting best rate and the right coverage.