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Monday, October 5, 2020
I always think I'm right. Don't you?
Sunday, October 4, 2020
What Happens to Your 401(k) When You Leave Your Job?
You’re seeking a new job or making a career transition. You’re updating your resume, preparing for interviews, taking a few online education courses, and applying for available positions online. As you’re submitting applications, you start wondering, “What should I do with my old 401(k) plan?”
There are several options you can take with your old 401(k) to make the most of what you’ve saved for retirement so far. Here’s five tips to help you go further with your 401(k) savings while embarking on a new chapter in your life:
Keep your old 401(k) where it is and don’t do anything.
This is the easiest option, especially if you prefer the investment options of your old 401(k) plan. Make sure you keep an eye on the account and see if there are any penalties by not actively contributing to the 401(k) account.
Roll it over into your new employer’s 401(k) plan.
Consider rolling over your old 401(k) if your new employer offers a 401(k) program. Rolling your previous 401(k) also helps you save more time by consolidating your retirement plans. You’ll manage fewer 401(k) accounts and continue building your retirement savings without incurring a tax penalty.
Roll over your old 401(k) into an IRA.
Instead of keeping your 401(k) savings in a 401(k), consider rolling over your funds to an Individual Retirement Account (IRA). Two benefits of this transition include a continuation of tax-deferred growth and more investment choices. You can pick an IRA trustee that has various investment options, and you’ll have the ability to easily move your money between trustees if they don’t have an option you’re looking for. Rather than withdrawing the funds and completing the rollover yourself, ask your financial advisor to help you initiate and manage the rollover to avoid early withdrawal fees.
Don’t cash in your old 401(k) plan.
You might want to liquidate your previous 401(k) savings and use the funds for your current situation, like paying off debt or covering essentials. However, this option could set you back from getting closer to your retirement goals. An early withdrawal of your 401(k) will include federal income taxes, a ten percent IRS early withdrawal penalty if you haven’t reached age 55, and any additional penalties charged by your 401(k) provider.
Speak with an advisor to weigh your options.
A financial advisor can help you weigh all the factors so you can make a confident decision to continue investing in your future.
Although there is more than one approach, remember that you’re in control of what you want to do with your 401(k) and the wealth you’ve built so far.
Pet Beneficiary Life Insurance
Insurers define health insurance for cats, dogs and other non-human animals as a form of property and casualty insurance.
Life insurers do not pay death benefits directly to non-human animals.
Many consumers, on the other hand, are eager to insure their love for their furry (and scaled, and feathered) companions.
(Trusts for pets are not just for the Super Wealthy) A recent online survey sample included 650 U.S. residents ages 65 and older. The survey team asked the participants who had life insurance why they have life insurance.
One of the five most popular reasons had to do with self care: 37% of the participants with life insurance said they got covered so loved ones would have money to pay for the participant’s funeral experiences.
The four other top reasons had to do with helping loved ones. Here’s the percentage of life insurance insureds who named those reasons as important motivations for getting covered:
- To have money to leave as an inheritance for loved ones: 37%
- To help a spouse, children, or both the spouse and children maintain their standard of living: 32%
- To help loved ones pay the participant’s debts: 17%
- To help the spouse, children, or both the spouse and the children stay in the current home: 10%
A life insurance policyholder who wants to “leave the life insurance to the pet” must create a pet care trust, then name the trust to serve as a life insurance policy beneficiary. Once the trust gets the policy death benefits, the trustees are supposed to use the cash to help pay for the care of the pet.
But 10% of the survey participants stated they had named a dog as a beneficiary, and 4% said they had named a cat as a beneficiary.
About 59% of the participants said a spouse was a life insurance policy beneficiary, and 38% said they had named one or more children as beneficiaries.
In other words: The idea of naming a pet, or a pet care trust, as a beneficiary was about 24% as popular as naming a spouse as a beneficiary, and 37% as popular as leaving life insurance benefits to one or more children.
- Doug Myrick
Tuesday, September 22, 2020
Go Fund Me isn't life insurance
Have you ever been scrolling on Facebook and come across a Go Fund Me for someone that has recently passed away? The other day I did, and I do many times to be honest. This person was young and his death was unexpected. While I am sure this is the case for many crowd funding campaigns there are ways that you can make sure that you are not one of them…
Your death should be a time of celebrating your life, even when it is unexpected, not a time for your loved ones to crowdfund asking for donations toward the final expenses that you failed to properly plan toward. I know that this is to the point but it is a fairly simple topic to understand.
There are a few simple reasons to have life insurance:
1. Not having life insurance is selfish. Life insurance is not that expensive if done right, and when you are healthy and young. Many times people wait because they are young and don't need it or don't have a family yet, however what they fail to recognize is the older you get the more expensive it gets and if you do end up with a medical condition that could increase your premiums or leave you uninsurable that is when people want it. By not getting life insurance you are making the the choice to have others pay for your expenses at the time of your death.
2. It is unfair to those around you. They are dealing with your loss. They are having to grieve and figure out what life will be like without you. Now on top of that they are having to fund your burial expenses, any debt you incurred, caring for any dependents you leave behind, the list actually goes on. Think about your children, if you have them, you choose to just have your group life from work (usually $25,000), your wife is a stay at home mom, and you unexpectedly die. Just take a moment to think about how life will be like for your family without any additional life insurance. (This thought should make you cringe). Now think about it if you were properly insured. (This thought should make you feel comfortable that your family won't be under financial duress).
3. It is not everyone else's burden to pay for your lack of adulting. If you want to get a Go Fund Me started, do one to raise money to pay for your premiums. I would love to see someone do that to be honest, and see what people give you as donations. I saw one of the donations for the person that passed away was $500, do you know that for some that would cover a whole years worth of premium for a $50,000 policy!
I know that this article is blunt but it is true and we are passionate about what we do. Please don't leave it to crowd sourcing to pay for your funeral and the burden you possibly leave behind. I mean what happens if crowd sourcing doesn't provide any monies at your death...
By obtaining life insurance it empowers your to take control of what happens when you are gone from this earth, let the memory be one of happiness and don't tarnish that with the memory that you were a burden because you didn't have coverage when your family needed it the most.
Thursday, September 17, 2020
3 Reasons People Don’t Buy Homeowners’ Insurance
I recently learned about two separate times when families lost everything when their homes burned. These are tragic losses and thankfully, the only things that were lost were replaceable items. No one got hurt, but they did wake up the next day with nothing but the clothes on their backs and no home to return to.
The real tragedy of these situations is that they appear not to have any insurance on their properties. That means that rather than getting a hotel room, they are looking to friends and family for a place to stay until they find something else. Rather than going shopping for a few essentials while things start to work out, they have to ask for donations and the kindness of friends, family, and strangers for their essential living items. Rather than being able to work with contractors to remove the debris and begin to rebuild, all that’s left is a worthless piece of property with a shell of a house on it.
Given the situation that this choice put them in, you would think that people would consider this when they choose not to buy insurance. Here are three reasons that people don’t buy homeowners’ insurance when they don’t have to.
It can be expensive.
I get it. Insurance isn’t cheap. Of course, that also depends on several factors. I live in Florida, which by all accounts is one of the most expensive states in the US for insurance. That doesn’t make it less valuable, especially when you come home and your house is on fire.
The cost of homeowners’ insurance is based on several factors. The first three are interconnected. The size, construction type, and reconstruction cost of the home. This should make total sense, but the bigger the house, the more expensive it’ll be to replace it. It just takes more materials and time to rebuild. It also makes sense that different building materials cost more. Contractor grade materials cost less than premium materials. Wood costs less than block.
The cost is also based on the location of the home. This is true in a few different ways. The costs for building materials and labor vary from town to town, or state to state. Some property estimating tools have data down to the zip code for price differences in materials and labor. That can also change if the loss is related to a catastrophic event, such as a hurricane or wildfire.
The cost of insurance based on the location also means that some locations are more expensive to insure because of their risk of damage due to different covered causes of loss. Florida residents pay more to insure for hurricane and flood than others might. Meanwhile, in California, the risk of wildfire is certainly impacting insurance costs there. Particularly risky places (for different causes of loss) include barrier islands, coastal regions, wildfire areas, the plains, and lower elevations near bodies of water.
No one is compelling them to.
There are people that wouldn’t buy insurance if they felt like they could get away with it. Don’t think so? Refer back to the introduction and your own memory. I’m guessing that you know of at least one person or family that lost everything in a fire and didn’t have any insurance. Still not convinced? How is the uninsured motorist situation where you live? In Florida, it’s estimated to be about 1 in 4 drivers is uninsured and that doesn’t account for the other drivers who only buy the minimum insurance.
When there is no compulsion to buy insurance, there are several people who will opt to avoid the monthly expense and go without it. The only time coverage is mandated is when there is a mortgage in place. With that in mind, it occurs to me that people look at their homeowners’ insurance with two parallel thoughts that drive their decision not to buy it.
- Nothing major has happened so far and I don’t know anybody who has had any major losses that insurance would cover. Those people that I know that have had losses had such a hassle with their insurance company that it’s really not worth paying for.
- I could take that money and use it for other things my family needs: a car payment, car insurance, food, clothes, etc.
It happens. People have to make choices sometimes and that means that if pushed, there are people (more than we probably want to admit) that would choose to use their money differently when no one is forcing them to buy insurance.
The insurance industry’s reputation.
The insurance industry doesn’t have the most stellar reputation when it comes to pleasing every customer. This goes back to the complexities of insurance and how sometimes people think a loss should be covered and it just isn’t. It isn’t helpful either that sometimes, insurance people act poorly, incorrectly, and sometimes illegally.
Special thanks go here to the groups that are responsible for the insurance industry’s terrible reputation.
- Thanks to the companies that try and low ball their customers when what they should do is quit arguing and pay the claim. You know that you owe the money. We know that you owe the money. Why not just err on the side of serving and let it all wash out later? Companies would tell us that they just want to pay what they owe and that they have to work hard to prevent fraud. I wonder how it would play out if companies would be a little more liberal about paying claims. Could that cut down on the fraud that they’re so worried about?
- Thanks to the coverage attorneys who shout from their very expensive billboards and TV commercials that insurance companies are out to cheat their customers. All this while cashing the big checks (their part of the big settlement) so that they can make their mansion, car, and boat payments. My question is how much of the extra money that they get for the “customer” goes back into their pockets rather than getting the customer more money?
- Thanks also to the public adjusters who appear to assume that all insurance companies are cheating their customers. I know that you can show me file after file where that is claimed to have happened, including several where it’s actually true. I also know that your files aren’t all of the claims files and that most claims get settled in a way that makes the customers whole, if not really happy.
It’s worth noting here that these are not all companies, attorneys, or public adjusters. But let’s not kid ourselves, not all companies, attorneys, or public adjusters are the good citizens and neighbors that they want the rest of us to believe they are.
In the end, even though these are reasons not to buy homeowners’ insurance, there is one really good reason to buy homeowners’ insurance. When the fire happens no one wants to have to look their family in the eye and wonder what are we going to do now?
- Doug Myrick
Monday, September 14, 2020
Insurance Comparison Site Rates Miami As 3rd Most Expensive City To Own A Car
(Punta Gorda, FL) – An insurance comparison site that compares rates from over 200 insurance carriers ranked Miami as the third-most-expensive city to own a car.
The Zebra, released its findings on Tuesday. Click here to read their report
Its report examined the 50 most populous cities in the US, with weighted average costs such as car insurance, gas and toll roads.
Their report also looked at the amount of auto loan debt residents carry compared to the median income. It also looked at parking expenses for two hours in a garage.
Here are the 10 most expensive cities to own a vehicle:
1. Riverside, CA
2. Los Angeles, CA
3. Miami, FL
4. New York, NY
5. Las Vegas, NV
6. San Francisco, CA
7. Denver, CO
8. Philadelphia, PA
9. San Diego, CA
10. Jacksonville, FL
This is what they said contributed to Miami being ranked #3 nationally:
“If you need a car to get Miami’s beach or nightlife, make sure you budget for it. Auto loan prices are high compared to income levels, and car insurance premiums come out to $250 a month. Florida is also home to high gas prices, as well as an extensive system of statewide toll roads.”
They said auto loan debt is at 45% in Miami, along with car insurance being almost $3,000 a year. They also said Florida gas prices average $2.14 per gallon.
Here are the least expensive cities, according to their study:
1. Columbus, OH
2. Milwaukee, WI
3. San Antonio, TX
4. Cincinnati, OH
5. Nashville, TN
6. Buffalo, NY
7. Raleigh, NC
8. Minneapolis, MN
9. Cleveland, OH
10. Portland, OR
Doug Myrick | Insurance Policy Centres LLC | 305.741.3684 | www.dougmyrick.com
Tuesday, September 1, 2020
Why an Estate Plan is Necessary for Young, Single Adults
Imagine you are 24 years old. College and graduate school are done, not exactly paid for, but finished all the same.
A first job has you feeling empowered. You are still living at home, but you have replaced your red racing car bed with the SLATTUM bed from IKEA and your Hannah Montana poster has been removed in favor of a pastoral painting picked up in Cold Spring.
In other words, you have transitioned into adulthood. Your phone’s reminders are filled with all the places and restaurants you want to visit as soon as the pandemic ends. There are loads of appetizers that you have yet to photograph and share on Instagram. Friends and more than friends swirl around you. Plus, you just adopted a Pembroke Welsh Corgi puppy.
One Tuesday, an hour before dinner, mom sits down next to you on a stool at the kitchen island while you are enjoying sparkling lime water. She has that look in her eyes, the look that says she is worried that you have no idea what you are doing and you are about to ruin your life. You meet that look with a perfectly timed eye roll. Not a word has been spoken, but you know what is coming. A pre-emptive strike is necessary in this situation.
“Mom, I set up an automatic savings account, I have already talked to HR about my retirement plan options and I do plan on finding an apartment – eventually.”
Mom does not blink as she absorbs her child’s words.
“You should think about an estate plan,” she intones.
You stifle a laugh. “I hereby leave all of my debt and my phone case collection to Dad!”
Silence. Then a fizz and a pop from the sparkling lime water punctuates your sentence.
Is your mom overdoing it? Not really. Setting up an estate plan is not difficult. A health care proxy and a power of attorney come in handy in case of a health emergency to simplify decision-making.
Before the pandemic, this logic would probably fail to resonate. The COVID-19 hospitalizations forced many families to confront their own lack of planning. Without basic advance directives in place, health care facilities and financial institutions may throw up some roadblocks before they authorize a decisionmaker. Even at 24, you have a financial life – bank accounts, credit card, a car, a retirement account and other personal assets. Someone has to properly handle these responsibilities if you cannot.
An unfortunate result would be to recover from an illness then discover that credit card bills remained unpaid and your credit score sunk. A bad credit score will hamper efforts to rent an apartment, buy a car, increase your credit limit or purchase a home. Choosing a reliable agent under a power of attorney is a smart idea.
Planning for your mortality is not something most 24-year-olds prioritize, but it lays the groundwork for intelligent financial thinking and organization. One simple consideration is to make sure that your financial account beneficiary statements are up to date.
Preparing a will in your 20s is also a wise step in a very long chain of decisions. It can set you on a course to manage increasing complexity in your financial life, including property ownership. A will can also contain a pet trust for your dog or cat that can select the person who will care for them and provide money for their care.
Your parents will continue to have a major influence on your financial thinking as your 20s progress, but certain slices of independence will start to emerge. Estate planning and financial organization should not be put off until your 30s and 40s. Good habits established early will bestow advantages that will allow you to live your best life.
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