Real-life Financial Tips for Different Generations

Do you remember The Game of Life®? In Milton Bradley's popular board game, players progress through life stages making decisions that affect their prosperity. Like those players, today's generations face financial decisions with lasting effects. Here are some tips for staying focused despite life's ups and downs.

 

Generation Z (teens to early 20s):

Accustomed to instant gratification, the "Digital Generation" may need to recognize that financial success takes diligence and patience. Consider sharing the following advice with the

Gen Zers in your life:

     Live within your means. Your first paycheck
     provides the chance to learn valuable
     lessons, such as creating a budget and
     spending less than you earn.

     Build a saving habit. You have one powerful advantage over other generations--time. Why not

     make saving automatic and direct a part of your paycheck into a savings or investment account?

     Understand credit and credit reports. A good credit history helps you get a car loan and a

     mortgage, but a bad one can ruin your borrowing chances for years. Reviewing your credit report

     regularly can help you manage your finances and protect your identity.

Generation Y (20s and early 30s):

In this group, you could be juggling your first "real" job, college loans, marriage, a first home, and young children. Consider these points:

Risk management isn't just for companies. Save 6 to 12 months' worth of living expenses in a savings account for unexpected emergencies. Review your insurance, and at a minimum, have health and property coverage. Also consider disability insurance, which helps pay the bills during a health crisis.

Start saving for retirement ... Like Generation Z, time is your strongest ally. Participate in a retirement savings plan at work, if offered, and if your employer offers a match (free money!), contribute enough to get all of it. If you don't have a plan at work, open an individual retirement account (IRA) and invest what you can (up to annual limits).

... And your children's college. In 18 years, a four-year degree could cost as much as several hundred thousand dollars. Give your children a head start by saving now.

Generation X (30s and 40s):

Home ownership, older children, a career in full swing--if you're in this group, your finances may take a back seat to life's daily demands. To help stay focused, consider the following:

Retirement savings trump college savings. Don't risk your future to pay for your children's entire education. There's no financial aid office in retirement.

Don't neglect your health. Are you experiencing new aches and pains? At this age, medical issues can begin to surface, demanding time, energy, and financial resources. Take care of yourself, and before an emergency arises, review your health and disability coverage.

Create a will, if you don't already have one. This important document can help ensure your children are cared for and your assets are distributed according to your wishes. Medical directives should also be established now.

Baby boomers (50s and 60s):

If you're in this age group, you may have both adult children and elderly parents who need assistance, as well as an impending or current retirement. Pointers for you include:

Shift your retirement savings into high gear. People over 50 benefit from higher savings limits on 401(k)s and IRAs. Strive for the maximum.

Visit a financial professional. When should you tap Social Security and your retirement savings? How should you invest your assets to potentially provide a lifetime of income? A financial professional can be a critical coach at this time of your life.

Investigate long-term care insurance. These policies help protect your family's assets from the potentially devastating effects of long-term care. The older you get, the more expensive these policies can be.

Retirees:

The Game of Life ends when players reach retirement, but not so in real life--you still have years ahead of you. Consider the following:

Review the basics. Whether you plan to travel to exotic locales or play board games with your grandchildren, a key to happiness is living within your means. Develop a realistic budget and don't exceed your spending limits.

Manage your income stream. A financial professional can help you choose vehicles and determine an investment strategy to help ensure you don't outlive your assets.

Plan for your family's well-being. A properly crafted estate plan can help you ensure that your wishes are carried out--for both you and your family's peace of mind.

How Does Health-Care Reform Affect Women?

The Patient Protection and Affordable Care Act (ACA) expands women's access to health insurance and adds several reforms to the existing health-care system that are specifically beneficial to women.

Access to care and affordability are important issues for women. According to the U.S. Department of Health and Human Services, because almost twice as many women than men who receive employer-provided health insurance are covered as dependents, they are susceptible to losing that coverage should they become widowed, divorced, or if their husbands lose their jobs.

In addition, the cost of coverage may significantly impact women. Women earn less than men, on average, and are more likely to be out of the workforce to care for children, parents, or other dependents. Because of this trend, out-of-pocket costs such as co-pays, deductibles, and premiums can pose a particular threat to women's access to affordable care.

The ACA provides for the creation of state-level health insurance exchanges, available to small businesses and uninsured individuals that will serve as a marketplace of private and public health plans. Individuals and families purchasing insurance through insurance exchanges may be eligible for subsidies or tax credits (based on income) that can be applied towards the cost of insurance.

According to the U.S. Census Bureau, 20% of women between the ages of 18 and 64, or about 19 million women, are uninsured. Of those, it is estimated that 36% will be eligible for tax credits and subsidies. ACA specifies essential health benefits for women that must be offered by non-grandfathered plans. These benefits include maternity and newborn care, including prenatal visits and pediatric services. Several preventive services must be offered without co-payments or deductibles, including mammography exams; Pap tests; colonoscopies; type 2 diabetes screening; obesity screening; several immunizations including hepatitis, influenza, and HPV; and alcohol and tobacco counseling. Specific coverage benefits will continue to be shaped by U.S. Health and Human Services regulations.

What Health-Care Provisions Are Effective 2013?

With the Supreme Court's favorable ruling on the constitutionality of the Patient Protection and Affordable Care Act (ACA), more of the law's provisions will become effective in 2013. Here are some of the new features that may be important to you.

 

Medicare Part D participants who reach a gap in their drug coverage (the "donut hole") are required to pay the entire cost of prescription drugs out-of-pocket. In 2013, the ACA will continue to close this gap by increasing subsidies to reduce the cost of brand-name and generic drugs to participants who reach the donut hole. These subsidies will continue until 2020, when the participant's maximum contribution toward the cost of prescriptions will be reduced to 25%.

 

The threshold for the itemized deduction for medical expenses increases from 7.5% to 10% of adjusted gross income, beginning in 2013. However, this increase is waived for taxpayers age 65 and older through 2016.

 

In 2013, the annual pretax employee contribution to a Section 125 cafeteria plan flexible spending account (FSA) is reduced to $2,500, subject to annual increases for cost-of-living adjustments. The reduction does not apply to certain employer non-elective contributions (e.g., flex credits).

 

Beginning in 2013, the hospital insurance (HI) portion of the payroll tax, commonly referred to as the Medicare portion, increases by 0.9% for individuals with wages exceeding $200,000 ($250,000 for married couples filing a joint federal income tax return, and $125,000 for married individuals filing separately).

 

In addition, 2013 marks the imposition of a new 3.8% Medicare contribution tax on the unearned income of high-income individuals. This 3.8% contribution tax generally applies to the net investment income of individuals with modified adjusted gross income that exceeds $200,000 ($250,000 for married couples filing a joint federal income tax return, and $125,000 for married individuals filing separately).

 

Looking ahead, 2014 brings the implementation of the health insurance exchanges, premium and cost-sharing subsidies, and the requirement that most individuals have health insurance.

Food For Thought . . . Simple Steps to Increase Your Life Expectancy

·         The leading cause of death and the number one cause of shortening life expectancy in the U.S. is heart disease. As your heart ages, there can be a build- up of gunk in your arteries and your arteries themselves can become harder (see heart aging for more information). This causes your blood pressure to rise and your heart to work harder, leaving you at risk for heart disease. Vegetarians (whole foods vegetarians) have some of the best arteries around because eating healthy vegetables avoids bad fats and other unhealthy foods.

·         People who eat lots of vegetables take in lots of antioxidants. Antioxidants help your body repair some of the damage caused by aging. The more plants you eat (and the greater variety) the more raw materials your bod has to make repairs. Read more on antioxidants and their evil counterpart, free radicals.

·         Finally, vegetables simply fill you up with very few calories (if prepared without creams, butter or cheese). A healthy vegetarian diet should help maintain or lose weight. A healthy weight is tied to a longer life expectancy.

So be more like a vegetarian to increase your life expectancy and live healthier.    

Source: http://longevity.about.com/od/liveto100/ss/life-expectancy_6.htm

Healthy Personal Finance

Develop a budget and stick with it

A good way to start the year on the right track financially is to make sure that you have a budgeting system in place. Start by identifying your income and expenses. Next, add them up and compare the two totals to make sure you are spending less than you earn. If you find that your expenses outweigh your income, you'll need to make some adjustments to your budget plan (e.g., reduce discretionary spending).

Once you have a budget, it's important to stick with it. And while straying from your budget from time to time is to be expected, there are some ways to help make working within your budget a bit easier:

•          Make budgeting a part of your daily routine

•          Be sure to build occasional rewards into your budget

•          Evaluate your budget regularly and make changes if necessary

•          Use budgeting software/smart phone applications

Set financial goals or reprioritize current ones

The new year is also a good time to set new financial goals and reprioritize your current ones. Take a look back at the financial goals you set for yourself last year--both short- and long-term. Perhaps you wanted to increase your cash reserve or save money for a down payment on a home. Maybe you wanted to invest more money towards your retirement.

Did you accomplish any of your goals? If so, do you have any new goals that you would now like to achieve?

Finally, have your personal or financial circumstances changed during the past year

(e.g., marriage, a child, job promotion)? If so, would any of these changes warrant a reprioritization of some of your goals?

Make it a priority to reduce debt

Any healthy financial plan is one that makes reducing debt a priority. Whether it is debt from student loans, a mortgage, or credit cards, it is important to have a plan in place to pay down your debt load as quickly as possible.

Review/take steps to improve your credit history

Having good credit is an important part of any sound financial plan, and the New Year is as good a time as any to check on your credit history. Your credit report contains information about your past and present credit transactions and is used by potential lenders to evaluate your creditworthiness. A positive credit history is important since it allows you to obtain credit when you need it and at a lower interest rate. Good credit is even sometimes viewed by employers as a prerequisite for employment.

Textophiles Love the Lowly Pen

Guess what remains one of today’s most popular instruments of communication – even in our wired world? Here’s a hint: Look around your desk, your car and your briefcase and you’ll find a common denominator.

Another hint? It’s everywhere, it’s accessible and it’s the solution to leaving your smartphone at home. The answer is the pen, and don’t go writing it off anytime soon.

The pen’s importance to consumers was investigated recently in a study cosponsored by BIC Graphic USA, a well-known company selling – you guessed it – pens. The study interviewed 1,114 consumers on their writing habits, and as researchers fast discovered, we consumers love our pens. Here are some of their findings:

·       Of those surveyed, 73% carry a pen at all times.

·       Almost 92% of car owners keep one or two pens in the car.

·      And, somewhat surprisingly, respondents under age 35 ranked the importance of pens higher than did those over age 65.

You know it’s in for the long haul when even textophiles love it.

Hold The Colas - Scrap the Sports Drinks

We all need our daily dose of caffeine to wake us up in the morning, but it turns out that, thanks to us, our kids may be getting a caffeine habit too.

Seventy-five percent of children surveyed consumed caffeine on a daily basis, and the more they consumed, the less they slept, according to a 2012 study published in the Journal of Pediatrics.

More reason for watching the kids’ caffeine intake:

·         Caffeine blocks a calming chemical in the brain, heightening stress hormones, which can increase 

           fat storage.

·         Caffeine inhibits impulse control.

·         Caffeine has no nutrients.

·         1,200 cases of caffeine poisoning were reported in kids under six in 2009.

Worth Reading

Does Having Choices Make Us Happy? 6 Studies That Suggest It Doesn’t AlwaysBy TED blog

Making decisions for yourself might not be all it’s cracked up to be. According to an amazing talk by marketing professor Baba Shiv, sometimes it’s a good idea to give up the driver’s seat. Shiv’s seemingly counterintuitive thoughts have led to a number of studies and research on choice, all trying to answer the question “Does having choices really make us happy?”

More: http://tinyurl.com/c3lwjwq

True Secret to Success (It’s Not What You Think)
By Geoffrey James
www.inc.com

Flexing this important emotional muscle is a key to lifelong success – but it’s probably not what you’re thinking. Gratitude is the answer to all your problems when it comes to success. It’s important to program your brain to be grateful, even if you’ve had a bad day. That means training your brain to look for more reasons to feel grateful. Try flexing this muscle to see how it affects your life.
More: http://tinyurl.com/cnzdxuy

How Being Polite Can Hurt Your Health
By Leslie Quander Wooldridge

We’ve always been told by our parents to respect our elders, keep our elbows off the table, and most of all…to be polite! But the final warning may not hold value any longer, at least not when it comes to our health. Being polite has been shown to cause harm in a number of ways – from forcing you to give in to peer pressure to overeating to please a host. Are you guilty of these polite faux-pas?
More: http://tinyurl.com/cvmf6tu

Are Words Losing Their Magic?

The most powerful ideas in human history have one thing in common – they’re all based on words. From religious doctrines to political constitutions to famous speeches that have broken down walls and created worlds, words have a long history of forging futures.

So, what is it about words that give them the ability to shape perspectives?

Rooted in oral tradition, words have always communicated importance. From oral traditions to the written word, words were luxuries available only to the elite. That is, until the printing press made it possible for them to be distributed almost as soon as they were written.

Today, words are shared as they’re conceived, and technology has made it possible to fire these “thought-rockets” around the world at devastating speeds.

That same technology has quickened the pace of the world. We do more, say more, share more – but does that mean we’re thinking more?

Among social media, digital media and broadcast media, words are hurled randomly into cyberspace with meanings twisted and distorted. Indeed, we’re littered with words, but how many of them actually matter?

Ironically, even though we’re exposed to more words today than ever before, fewer move us as did the words and works of the great orators of the past. Are words losing their magic?

Eat Dirt: It’s Not Evil Anymore

In North America, we obsess about hand sanitizer and scrub our fruits and vegetables until every vestige of mud in an effort to protect ourselves from bacteria we believe will make us ill. Well, as it turns out, our preoccupation with cleanliness may actually be making us sick.

A five-year study called the Human Microbiome Project found that 100 trillion good bacteria live in our bodies, bacteria that help keep us healthy.

The project, involving 200 scientists and 80 institutions, also discovered that as many as 1,000 bacterial strains exist in each person, that everyone’s microbiome (their collection of bacteria) is unique, and that disease-causing bacteria found in a human’s microbiome not only don’t cause illness, but they also co-exist peacefully. In short, bacteria isn’t evil.

Jeff D. Leach, founder of the Human Food Project, wrote in the New York Times: “Increasing evidence suggests that the alarming rise in allergic and autoimmune disorders during the past few decades is at least partly attributable to our lack of exposure to microorganisms that once covered our food and us.”

So how can we refamiliarize ourselves with those microorganisms? According to Leach, the answer lies in reintroducing organisms found in plain old mud.

While you may not want to eat spoonfuls of mud, you could consider trading artificially shiny grocery store produce for veggies and fruit from the local farmer’s market. And that dirt clinging to them? It’s good for you, so don’t be too quick to scrub it all off.