10 Long-Term Care Terms You Should Know

A 60-second read by Nicholas Scheibner: As people are living longer, paying for health care costs is becoming a top concern.  Many people are beginning to consider if a Long-Term Care Insurance policy is best for them. 

Before you look at purchasing a policy, here are ten terms that you should know:

  1. Elimination Period: Most Long-Term Care policies require you to “pay your own way” for a specified number of days (generally ranging between zero and 120 days) before an insurance company will begin to pay benefits.
  2. Waiver of Premium – When you begin receiving coverage, the premium will be waived. For a shared policy, if one person goes on claim (begins receiving coverage), the premium would be waived only for that person.
  3. Joint Waiver of Premium – If one person goes on claim, all premiums stop.
  4. Survivor Waiver of Premium – If one passes away, the survivor’s premium would be waived.
  5. Flex Credit – If the company does well on their investments, they may pay down your premium or you can save the extra for waiver of premium.
  6. Activities of Daily Living – Assistance with 2 of the 6 activities of Daily Living is required for most Long-Term Care policies to become active: Dressing, Eating, Transferring, Toileting, Bathing, Continence.
  7. Inflation Protection: Since costs inevitably increase each year due to inflation, most policies will offer a provision that will allow your daily benefits to increase annually by a certain percentage.
  8. Portability: The policies should be portable between states. Some will cover worldwide.
  9. Home Care: Does the policy offer home-care coverage? Some companies offer it as a rider to the policy for an additional premium.
  10. Pooled/Shared Policy: This is a policy that can be used between couples.  The benefit can apply to either one or both spouses.

Please lean on us when considering a long-term care policy.  We can help you go through the pros and cons of the decision.  We can also help you determine how much you can afford in yearly premiums.

College and Financial Aid When Parents are Divorced

A 30-second read by the Baron Team: For students with divorced parents who live separately, the FAFSA (Free Application for Federal Student Aid) asks that you fill out financial information in regards to the custodial parent. For FAFSA, the custodial parent is the parent who the child has lived with the most over the last twelve months.

Provided that the ex-spouse is the non-custodial parent:

  • Many private colleges assume that the non-custodial parent could be a possible source of funding, and therefore require that they fill out a supplemental financial aid document.
  • In that case, any financial support the non-custodial parent may give would only affect financial aid provided by the school, not the student’s federal and/or state aid benefits.

For more information, you can go to FinAid.org and StudentAid.gov

If you have any questions, don’t hesitate to contact the Baron Financial Group team.

We are thankful for …

At Baron Financial Group, we are thankful for you, our clients, family and friends!

As is the firm’s practice at Thanksgiving, a donation is made to our local food pantry, to help those in need in the community. We recognize that there are members of the community who are not as fortunate as others, who need help to meet the most basic of needs. Our purpose is to help our clients reach their financial goals and to secure a better future for them and their families. In keeping with our philosophy, we are committed to making the community a better place.

If you would like to join Baron and contribute to the Fair Lawn Food Pantry, you can send a check, payable to “Fair Lawn Human Services Trust”, or send a food or personal product donation to:

Fair Lawn Health and Human Services
8-01 Fair Lawn Ave.
Fair Lawn, NJ 07410

It is our hope that together, we can look forward to a future of promise for all!

Are Appreciated Investments a Part of Your Philanthropic Strategy?

A 45-second read by the Baron Team: Did you know that your appreciated investments could be among the best items to give to your favorite charity to get maximum tax benefits? Donating an appreciated investment instead of cash can qualify you for two tax breaks; you will get a charitable deduction for the current value of the investment and you will avoid having to pay capital gains taxes on the increased value of the investments.

So the next time you plan on donating cash or checks to an organization, you may want to consider some other options:

1) Does the charity of your choice have the resources or capabilities to accept gifts of appreciated investments directly?

 2) For Federal Income Taxes, if you are older than 70 ½, consider a qualified charitable distribution (QCD).

A QCD “is generally a nontaxable distribution made directly by the trustee of your IRA (other than a SEP or SIMPLE IRA) to an organization eligible to receive tax deductible contributions” (IRS pub. 590b). For more information on QCD’s, refer to page 13 of IRS Publication 590b.

Any further questions regarding charitable donations, feel free to contact the Baron Financial Group team.

Where is the Best Place to Put My Emergency Funds? How Much is Enough?

A 60-second read by Anthony Benante:  You want to put your emergency funds in an account where the funds are easily accessible and not exposed to risk.  Examples include traditional bank accounts that carry FDIC insurance (savings, checking, etc.).  The current FDIC insurance limit is $250,000 (as of October 2016), so you should structure your accounts appropriately to ensure your emergency funds are protected.  You don’t want your emergency funds exposed to volatility, because it is possible you may need access to the funds when markets are experiencing volatility. If you put emergency funds in a risk asset (an investment that can change in value, such as a stock), it could wind-up causing you two financial problems, as opposed to having one financial solution.

How much you put in your emergency fund really depends on your specific situation, the stability of your job, your monthly budget and the consideration of all financial resources available. Typically, you want to put 6 to12 months of your salary away. If you are in a risky job or the majority of your income is from commissions or bonuses, the emergency fund may need to be more. Please contact us at Baron if you would like help in determining an appropriate amount for an emergency fund that would be best for your specific circumstance.

Medicare & Retirement Planning Webinar

Baron Financial Group’s Investment Committee provides an educational webinar on financial planning and investment management.  Medicare Consultant and guest presenter Mary Jean Cullen (MedicareAssist, LLC) discusses how Medicare works.  It is important to keep in mind that annual enrollment is open now through December 7th.

This presentation was first held at the September 13, 2016 Wine & Wealth event for our clients.

The webinar includes the following topics:

  • Beware of Market Doomsayers (0:00 -7:28) – Victor Cannillo
  • Asset Allocation and Diversification (7:30-15:53)   – Anthony Benante
  • Customized Financial Planning  (15:56-19:12) –  Nicholas Scheibner
  • What Role Does Life Expectancy Play in Retirement Planning? (19:13-23:15) – James Shagawat
  • Choosing A Medicare Plan: Learn What You Need To Know Prior and During Your Medicare Years    (23:30-51:44)  – Mary Jeanne Cullen

If you have any further questions, don’t hesitate to contact the Baron Financial Group team.

Should the Election Affect your Investment Strategy?

The answer is “no,” as long as you have a long-term globally-diversified
strategy

 

A 45-second read by Victor Cannillo: The simple truth is nobody knows what will happen when the election is over. No matter which candidate is elected President, historically, stocks will continue to rise and fall as they always have. This election will most likely be no different.

Right now, you might be hearing a lot of market commentary like “If Trump Wins…/If Clinton Wins…” We can be swayed to believe that because a certain president is elected, we should be making changes to our investment strategies and portfolios.

The number one thing to remember – always keep emotions out of investment decisions.

Keep in mind that we are not electing a king, but rather someone who will be in office at most 8 years, with a Congress and Senate that will account for checks and balances.

There might be some short-term volatility, but always remember that you are investing for the long-term, not just for the 4 to 8 years of a presidential term.  

If you have any further questions, don’t hesitate to contact the Baron Financial Group team.

What Should You Look For in a Financial Advisor?

 

Start by choosing one who listens to you…

Baron Financial Group is a member of NAPFA (National Association of Personal Financial Advisors). We are a Fee-Only firm that is compensated solely by the clients, not by the purchase or sale of a financial product. Our fiduciary responsibility is to put the best interests of our clients first.

Watch the video to see what characteristics NAPFA recommends when looking for a financial advisor.

What is the Best IRA for a Young Investor?

 A 30-second read by Nicholas Scheibner:  Before deciding which kind of IRA to open, the first thing you would want to do is check with your employer about 401(k) offerings. If your employer provides any company match into a 401(k) you will want to contribute to that account before you start an IRA. That way, you are able to take advantage of the “Free Money” provided by your employer. A Roth IRA is usually best for someone who is in a lower tax-bracket.  The idea is that you want to pay taxes in the lowest bracket possible.  So if you are making a lower income than you may in the future, you would want to pay taxes now, using a Roth.

Also, if you expect to be making less income now than in the future, a Roth is a good way to “prepay” taxes. You can’t avoid paying taxes, and the decision between a Roth and a Traditional IRA is, “pay taxes now or pay taxes in retirement?” Since a Roth provides tax-free withdrawals in retirement, the account provides for “tax diversification” that compliments your 401(k), traditional IRA, and taxable brokerage accounts.

If you have any further questions, don’t hesitate to contact the Baron Financial Group team.

The difference between buying versus leasing a vehicle

A 60-second read by Victor Cannillo:  The difference between buying versus leasing your next vehicle can be the difference of tens of thousands of dollars over a lifetime.  Auto expenses can be one of your biggest annual expenses, so there is a lot to consider. Most buyers only focus on their monthly payment fee, and therefore lean towards leasing. But it is important to remember that monthly payments are only one part of the cost to having a car. Continue reading The difference between buying versus leasing a vehicle

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