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MEDIA CENTER

The Money Minute - August 2013  


In this Issue

 Daughter and Mother

Aging and Our Parents

It is never easy to talk to parents about what their wishes are as they age. But it is a conversation that must be had, and more importantly, had before a major crisis occurs. Today, 1 in 5 individuals in the U.S. is 60 years or older. With longer life expectancies, chances are your parents will suffer from a chronic disease, experience challenges associated with limited functional abilities or just have the general impairments associated with old age. It is important for your peace of mind, as well as theirs, to know that their wishes and values are being respected when they are unable to make decisions for themselves.

 

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Couple_holding_hands

What You Need to know about Social Security Retirement Benefits

For most people, Social Security is a crucial part of retirement planning. Social Security is also a topic we don’t typically begin to take seriously until we approach the end of our careers and can see our retirement looming. However, the earlier we learn about the Social Security system, the earlier we can see how it fits into our retirement planning. Following are five basic facts you should know about Social Security before you retire.

 

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Indianapolis Homebuyer Workshop

First Time Homebuyer Workshop
Indianapolis, IN

Apprisen and Chase want to help you achieve your dreams by giving you the information you need to own your first home.

  • Preparing for homeownership
  • Working with a real estate agent
  • Understanding budgets and credit history
  • Finding and working with a lender
  • Home inspections and home maintenance
  • Preventing loan default

Each attendee will receive a HUD homebuyer certificate of completion at the end of the workshop.

The cost of this workshop is $20 per individual or $25 per couple and can be paid at the workshop.

Attend this two part workshop:

Thursday, September 12th & 19th - 5:00pm-8:00pm.

To learn more or register click here

 

 Image-Addressing-the-Needs-of-Your-Senior

Webinar: August 27th and 28th 

Addressing the Needs of Your Senior    

If your parents are reaching retirement age, it’s not too early to begin a conversation. From finances to living wills, Apprisen can offer you information on how to support and protect the needs of your parents. In this webinar you will:

  • Learn how to have the “money talk” with your aging parents
  • Be aware of the warning signs of senior scams
  • Learn about the legal paperwork needed to ensure your parents’ wishes are known and followed
Tue., August 27 12:00pm Eastern, 11:00am Central,
9:00am Pacific. 
Tue., August 27 3:00pm Eastern, 2:00pm Central,
12:00pm Pacific.  
Wed., August 28 1:00pm Eastern, 12:00pm Central,
10:00am Pacific. 

 

To learn more or register click here

 

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Poll Reveals Close to One in Five Consumers Comfortable Carrying Debt

A recent online poll from the National Foundation for Credit Counseling (NFCC), of which Apprisen is a member, revealed that close to one in five consumers, 18 percent, believe that carrying credit card debt over from month-to-month is a responsible way to manage their finances.

Read the entire article

 

 

Aging and Our Parents   

It is never easy to talk to parents about what their wishes are as they age. But it is a conversation that must be had, and more importantly, had before a major crisis occurs. Today, 1 in 5 individuals in the U.S. is 60 years or older. With longer life expectancies, chances are your parents will suffer from a chronic disease, experience challenges associated with limited functional abilities or just have the general impairments associated with old age. It is important for your peace of mind, as well as theirs, to know that their wishes and values are being respected when they are unable to make decisions for themselves.

When talking to your parents about their future, it is important to frame the discussion around the major considerations for aging adults: security, independence, freedom, peace of mind, family, friends and choices.

Approach the conversation with the intention of helping your parents set their own course of action while you guide the discussion. Have a list of things you want to talk about, but don’t feel pressured to cover all the points in one session. Keep it simple. Start slowly with one issue at a time and offer options and choices. Ask open-ended questions and encourage your parents to share their feelings. Together you can formulate a plan to ensure that all their needs are met.

Here is a list of possible topics for discussion:

Legal Issues – At the very least, your parents should have an up- to-date will, a durable power of attorney for both legal and healthcare decisions and a living will. Make sure you have copies of these documents or know where they are located.

Medical Care – Your parents should have one doctor that coordinates all of their care. Make sure they have a list of all medications and supplements that they take. 

Housing – Find out where your parents would like to live if they have to leave their current home. Would they prefer to downsize into a smaller house or would a senior retirement community be their choice? Is it an option for them to live with you? But, make sure you don’t make any promises you can’t keep.

Finances – Most parents would prefer not to discuss finances with their children. But it is important that you know what type of accounts they have and where they are at or at least the name and number of their financial advisor. Also, discuss any life insurance policies they may have.

End of Life Care – If your parents say they would want you to “pull the plug” make sure you know what that means and when it applies.  

Burial Arrangements – This is a discussion most people would prefer not to have, but probably one of the most important. If possible, make an appointment with a funeral home to discuss options and costs. 

If you still feel anxious about starting this type of discussion with your parents, talk to other family members or a professional. You may want to get a neutral party involved. Professionals such as physicians, case managers, social workers, lawyers or financial advisers can help navigate the many issues related to aging. 





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What You Need to know about Social Security Retirement Benefits

For most people, Social Security is a crucial part of retirement planning. Social Security is also a topic we don’t typically begin to take seriously until we approach the end of our careers and can see our retirement looming. However, the earlier we learn about the Social Security system, the earlier we can see how it fits into our retirement planning. Following are five basic facts you should know about Social Security before you retire.

1. To receive full retirement benefits from the Social Security Administration (SSA), you need to work until your Full Retirement Age (FRA).

For those of us born after 1959, full retirement age is 67. If you were born prior to 1960, your full retirement age is reduced two months for each year before 1960.

For example; if you were born in 1955, your birth year is 5 years earlier than 1960 and you can retire at age 66 and 2 months.

2. You can receive Social Security retirement benefits as early as age 62. However, your benefits will be permanently reduced if you begin to receive payments before you reach FRA.

It’s a choice that you need to make. Retire earlier and get smaller Social Security payments or wait until you reach your FRA and get the maximum amount. If you have reason to believe that you will live many years after you retire or that you might outlive your other sources of retirement income, you might want to wait until you reach FRA before applying for Social Security payments.

3. The amount of your Social Security retirement payment is based upon your 35 highest earning years.
The Social Security Administration tracks the earning information reported on your W2 each year and uses the information to determine your monthly Social Security retirement payment. When the SSA calculates your earnings, your income is adjusted for inflation. If you didn’t work for 35 years, the SSA substitutes zero income for the missing years and your benefit payments will be lowered. This is one important reason why you should check your W2 every year for accuracy and that you should put in the full 35 years of work before you retire.

The Social Security Administration will take the income from those 35 top earning years and place it into a formula that is intended to level the playing field a little between high and low income earners. The result is your monthly Social Security retirement payment.

You can use this Social Security benefit calculator to estimate your monthly retirement payment.

4. You can’t receive retirement benefits from the SSA until you have earned 40 social security credits.
What is a Social Security credit? How do you get them? Each year that you work, you will receive credits based upon the amount of money that you earn, up to a maximum of 4 credits per year. In 2013, you will earn one credit for every $1,160 that you earn, up to 4 credits. The amount of earnings required to earn a Social Security credit increases each year by a small amount.

If the gears in your head are turning right now, you will probably have figured out that you can earn 40 credits in as little as ten years. Don’t get too excited and start dreaming of retiring early. You still have to reach a minimum of age 62 to receive Social Security payments and that 35 years’ worth of income are used to calculate the amount of your monthly payment.

5. If you have any questions about Social Security benefits, the SSA has a very informative website that is easy to navigate and can answer all of your questions.

Visit the Social Security Administration website and take a look at all of the great information that is available about your Social Security benefits. The information doesn’t end at retirement benefits. You can learn about survivor and disability benefits and Medicare as well. Want to get the most out of the site? Sign up for an online account and you will be able to access your earning history, estimated payments and more. Check it out www.SSA.gov.

Remember, Social Security was never intended to be the sole source of income during your retirement years, and it will most likely not provide you with the same quality of life you’re used to while working. Make sure you’re saving for your future. 

For budgeting and money-saving tips, visit the tools section of our website.

 

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Poll Reveals Close to One in Five Consumers Comfortable Carrying Debt

A recent online poll from the National Foundation for Credit Counseling (NFCC), of which Apprisen is a member, revealed that close to one in five consumers, 18 percent, believe that carrying credit card debt over from month-to-month is a responsible way to manage their finances.

Consumers need to be aware of the consequences associated with continually carrying credit card debt from month to month, some of which are below:

  • Interest on a credit card is typically calculated on an average daily balance.  For those who carry a balance over from the previous cycle, interest is not only charged on the unpaid balance, but on any new purchases added to the balance.  
  • With interest added onto the balance month after month, consumers end up paying interest on the interest.
  • Carrying a balance has the potential to negatively impact a person’s debt to credit ratio, one of the main components of credit scores.
  • A higher balance decreases the amount of credit available for future purchases.

However, there can also be disadvantages to charging too little. At the other end of the spectrum, a similar number of respondents, 21 percent, indicated that they do not use credit cards. While this approach to money management can avoid many financial pitfalls, it too has its problems:

  • Although it is possible to pay cash or use a debit card for daily expenses, these types of transactions are usually not reported to the credit bureau. Most people need credit for major purchases such as a house or car, but without a thick and positive credit file, credit may be denied.
  • Without credit cards, people miss out on the convenience of being able to purchase items or pay for services when cash is not readily available.
  • Carrying cash is risky, as the money could be lost or stolen, whereas credit cards often offer consumer protection features including those against loss.
  • Credit cards provide a safety net for emergency situations.

The majority of poll respondents, 61 percent, believe that paying credit card debt in full each month is the only responsible way to manage personal finances. The benefits associated with this type of behavior far outweigh any disadvantages and include the following:

  • Timely bill payments and a low credit utilization ratio are typically the top weighted elements in credit scoring models. Therefore, this type of behavior could have a positive impact on an individual’s credit scores.
  • The convenience of using credit can be enjoyed without paying any interest or penalties.
  • The entire line of credit remains available for future use.
  • Stress and worries of being over-extended are avoided.

People who repeatedly find themselves unable to satisfy their monthly debt obligations in full would benefit by reaching out to Apprisen. A certified financial specialist will review your financial situation, at no cost, and provide you with an action plan to help you get back on track with your finances. To set up an appointment you can call 1-800-355-2227 or go online to www.apprisen.com

The actual poll question and answer results are below:

Which of the following best describes your attitude toward debt?
A. I believe that carrying credit card debt over from month-to-month is a fact of life and is a responsible way to manage my finances = 18%
B. I believe that paying credit card debt in full each month is the only responsible way to manage my finances = 61%
C. I do not use credit cards = 21%

 

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