Tag Archives: financial planner

Are You Ready to Take Social Security Benefits?

My Comments: Today is Tuesday so today I talk about Social Security. These comments by Dan Caplinger may be old news, but for those of you just starting to think about retirement, know that Social Security is a fundamental income component for millions of people.

Chances are, you’ll be in that group. The sooner you get your arms around this idea, the happier you will be.

by Dan Caplinger on Sep 17, 2017

There are some things you need to be aware of before you file for retirement benefits from Social Security.

Social Security helps support tens of millions of Americans in retirement. Because of how important Social Security benefits are, you can’t afford to make any mistakes about how the program works and how you can get the most out of it that you can. In particular, these must-know facts about Social Security are often misunderstood, leading to critical errors that can result in getting lower benefits than you’re entitled to receive.

1. Social Security payments vary depending on when you take them

Most people understand that you can claim your Social Security as early as 62 or as late as 70, and when you claim can have an impact on how much money you get. Yet even though the mechanics are simple, many people don’t understand them. For starters, know that your “primary insurance amount” is the monthly benefit you’re entitled to receive if you claim Social Security at your full retirement age, which for those retiring now tends to be between 66 and 67. The Social Security Administration calculates your PIA based on your lifetime earnings and the year of your birth.

If you claim benefits early, then you lose a certain percentage of your PIA based on how early you claim. Up to 36 months early, you’ll lose 5% of your benefits for every nine months that you’re early, while shorter periods result in pro-rated decreases. If you claim more than 36 months early, then you’ll lose an additional 5% for every 12 months that you’re early in claiming them. That makes the maximum possible benefit reduction 35% (for those whose full retirement age is 67 and who claim at 62).

Those who claim their own retirement benefits late get a bonus of 2% for every three months that they wait beyond their full retirement age. That comes to a maximum bonus of 32% (for those whose full retirement age is 66 and who claim at 70). These bonuses aren’t available for spousal benefits but only for benefits paid on your own record. By understanding these provisions, you’ll be better able to calculate the impact of various options on your finances.

2. Your claiming decision can affect benefits for your entire family

Your family members may be entitled to Social Security based on your work history under certain circumstances. This is most common for spouses: If you’re married, your spouse may be eligible to receive up to 50% of your primary insurance amount as a spousal benefit. However, other family members, such as children or parents, may also be entitled to benefits.

In order for these family members to claim their benefits, you usually must file for and receive your own retirement benefits. In the past, alternative strategies allowed workers to file for benefits but then suspend them, opening the door to spousal and family benefits while letting the worker put off their benefits and thereby earn delayed-retirement credits. With the repeal of the file-and-suspend rule, that’s no longer an option, so families have to weigh the impact of having a worker delay benefits against the ability of other beneficiaries to get payments.

3. The government can take away some of your Social Security benefits in some cases

The laws governing Social Security provide for several instances in which benefits can be lost. If you claim Social Security before reaching full retirement age and while you’re still working, then you may start forfeiting part of your benefits if you earn more than $16,920 per year. Those who worked for public employers with their own pension programs can end up losing money because of the provisions of the Government Pension Offset and Windfall Elimination Provision.

The government may also take away part of your benefits indirectly through taxation. If you receive Social Security benefits, and the sum of half of those benefits plus your other sources of income exceeds certain thresholds, then a portion of your Social Security income is treated as taxable income and therefore boosts the amount of tax you’ll owe. It sometimes makes sense to defer taking Social Security benefits if you know that claiming them now will leave you open to losing some of those hard-earned monthly checks.

Be ready for Social Security

Claiming your Social Security benefits at exactly the right time can be tough, especially if you don’t have extensive financial assets to supplement those benefits. Nevertheless, it’s worth the effort to learn what you can about the program and the strategies that will help you get the most from it.

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The Cost of Long-term Care is Going to Bankrupt Us

My Comments: Demographics and interest rates are things over which few people have any control. It used to be DEATH AND TAXES, but not anymore.

Before DEATH these days is an insidious threat called Long Term Care, or LTC. We can agree it’s not OK to just take old people out into the woods and leave them there. That solution is frowned upon, as it should be.

So… what is the best alternative, not only for them but for you and me who haven’t yet reached that stage of life? We had better start paying more attention, ‘cause hoping for hurricanes and wildfires and tornadoes is not the solution.

by Richard Eisenberg on September 8, 2017


This article is reprinted by permission from NextAvenue.org.

When policy makers, health care analysts and financial journalists talk about the staggering costs of long-term care, it’s often wonky, devoid of humanity.
We throw around statistics like this one from the U.S. Department of Health and Human Services: 52% of individuals turning 65 will require long-term care supports and services at some point in their lives.

But at a Bipartisan Policy Center (BPC) webinar recently pegged to its new report on long-term care financing solutions, family caregiver MaryAnne Sterling poignantly revealed the financial, physical and mental tolls that long-term care can take.

When the long-term care crisis hits home

Three of the four parents of Sterling and her husband died from, or now have, dementia. First, she and her mother provided care for her dad in Sterling’s home as long as they could. Then, her parents depleted their savings so Sterling’s father could qualify for long-term care from Medicaid. “As a surviving spouse, my mother was left destitute after the Medicaid spend-down,” said Sterling, co-founder of Connected Health Resources for family caregivers and patients and owner of Sterling Health IT Consulting, in the Washington, D.C. area.

After that, said Sterling, “my husband and I provided $250,000 for basic living expenses for my mom to keep her out of that system [Medicaid].” Sterling’s caregiving responsibilities for her parents, she says, led her to give up getting an advanced degree and not to have children. In 2013, her mother needed to go into assisted living and her father-in-law was diagnosed with dementia. Sterling and her husband turned to Medicaid for her mother. Otherwise, Sterling said, “It would have cost us $8,000 to $10,000 a month, which was completely untenable.”

To those who say people like Sterling’s family “game the system” so Medicaid will pay for their long-term care, Sterling responded: “You’re not gaming the system. You’re desperate. I kept Mom out of the system for 12 years. By the time we needed the support of Medicaid, we did a pretty good job of not utilizing its resources for as long as we possibly could.”

The long-term care financing morass

Families like the Sterlings might avoid some anguish and financial pain if the government, insurance companies and employers adopt or tweak proposals in the BPC report sponsored by The SCAN Foundation, Financing Long-Term Services and Supports: Seeking Bipartisan Solutions in Politically Challenging Times.

The time to fix America’s long-term care financing morass is long overdue. Over 12 million adults rely on long-term care supports and services (LTSS), the BPC report says, “and the need is expected to rise dramatically in the coming decades.” The average expected lifetime long-term care services and supports cost for a 65-year old American today, BPC says, is $138,000 — and $182,000 for women.

Today, few Americans can afford the steep cost of assisted living facilities, nursing homes or home care (median annual nursing home cost: $91,300; median annual cost for a home health aide: $45,800.) As a recent AARP Long-Term Care Scorecard report noted: “The cost of long-term services and supports over time continues to be much higher than what middle-income families can afford.”

Medicare generally doesn’t cover long-term care expenses. As The SCAN Foundation’s President and CEO Dr. Bruce Chernof said at the BPC webinar: “Medicare is not the primary source of long-term care financing, despite the fact that people think it is or should be.” (A recent Associated Press-University of Chicago NORC Center for Public Affairs Research poll found that 57% of Americans say they expect to rely on Medicare for long-term care services and supports.) And Medicaid essentially requires impoverishment.

Just 11% of Americans age 65 and older own long-term care insurance policies and the market is in decline. Many who don’t buy the coverage find the premiums too steep and the benefits too skimpy, while fearing that premiums will rise dramatically. “We need a vibrant private market and we don’t have that today,” said Chernof, who chaired the federal Commission on Long-Term Care in 2013. (Incidentally, that blue ribbon panel produced a bevy of proposals, but punted on long-term care financing ideas.)

Bipartisan proposals for long-term care costs

The Bipartisan Policy Center’s public-private partnership recommendations, some of which build on ones in the think tank’s 2016 report, include:
• Give employers incentives to offer affordable, simplified “retirement long-term care insurance” as an employee benefit and auto-enroll some employees age 45 and older (BPC estimates annual premiums for someone in the 25 percent bracket might be $600 rather than $2,400 today)
• Let employees withdraw from 401(k)s and similar retirement accounts without owing federal tax penalties if they use the money to buy long-term care insurance policies through their employers
• Let Medicare Advantage plans and other Medicare provider organizations offer up to 14 days a year of respite care coverage to high-need, high-cost Medicare beneficiaries who have three or more chronic conditions and functional or cognitive impairment and are part of a person- and family-centered care plan (today, Medicare only offers respite care to beneficiaries in hospice, who are expected to die within six months)
• Let Medigap and Medicare Advantage plans sell limited, affordable long-term care coverage as an optional, voluntary benefit or a separate insurance policy financed through premiums paid by beneficiaries who choose to enroll (maximum daily benefit: $75; cost of premiums: an estimated $35 to $40 a month or $420 to $480 a year)
• Allow state and federal health insurance marketplaces to sell those lower-cost, limited benefit retirement long-term care insurance policies
Dr. William H. Frist, former Republican Senate Majority Leader and now a BPC Senior Fellow and co-chair of its Health Project, said that if the report’s recommendations turned into reality, Americans age 45 to 69 might own 8.5 million long-term care insurance plans, “twice what we would have otherwise.” Added Frist: “That’s not a total answer, but it’s meant to say there are ways to shape and modify the existing system to take the burden off individuals.”

What the report didn’t recommend

One proposal the Bipartisan Policy Center experts couldn’t quite bring themselves to endorse: adding “catastrophic” long-term care coverage to Medicare and paying for it through an additional Medicare payroll tax. That idea was proposed last year by the Long-Term Care Financing Collaborative.

Today, about 15% of people with long-term care needs require care for five years or longer (what’s known as “catastrophic” care) — far longer than the typical two to three years. The Bipartisan Policy Center report said its experts “stopped short” of endorsing catastrophic long-term care coverage through Medicare. Yet about two-thirds of Americans surveyed favor such a catastrophic insurance program.

“While we are not able to reach agreement on a politically viable means of financing a public catastrophic benefit, we agree that a credible overall LTSS framework would include a public catastrophic LTSS program with a waiting period of two-to-three years,” the report said.

It’s easy to see why this otherwise sensible idea was a nonstarter right now. “Policy makers are focused on squeezing Medicaid today,” said Frist. But, he added, “I’m hopeful that once we get through this phase, we will look at a holistic model.”

The Bipartisan Policy Center analysts also rejected the idea of a family caregiver tax credit “given the high budgetary cost of the policy” and because with the direction of Congress and the administration, “the policy does not seem feasible in the current environment.”

Time for action

Tom Daschle, the former Democratic Senate Majority Leader who is co-founder of the BPC and co-chair of its Health Project, noted that long-term care financing is something that deserves more attention from policy makers. “I don’t think our solution is just spending more money. We’ve got to tear down the silos [between health care providers, long-term care supports and services and insurers] that make it so inefficient today. We need to find ways we can commit resources more effectively and we need leadership in the public and private sector to do that.”

As Chernof noted at the webinar: “Most of us will have long term services and supports needs. This is not something like being struck by lightning.”

Richard Eisenberg is the Senior Web Editor of the Money & Security and Work & Purpose channels of Next Avenue and Managing Editor for the site. He is the author of “How to Avoid a Mid-Life Financial Crisis” and has been a personal finance editor at Money, Yahoo, Good Housekeeping, and CBS Moneywatch. Follow him on Twitter: @richeis315.

This article is reprinted by permission from NextAvenue.org, © 2017 Twin Cities Public Television, Inc. All rights reserved.

Could a Reverse Mortgage Save Your Retirement?

My Comments: No, I am not trying to sell you a reverse mortgage. I AM saying you should NOT dismiss them out of hand. Under the right circumstances, they are a valuable tool. As a disclaimer, you should know that I arranged one for myself a year ago.

As a financial planner, I’ve encouraged clients to look closely at a reverse mortgage many times over the years. Financial freedom comes in many forms and reverse mortgages are increasingly a contributor to that freedom. Their reputation as a bad thing has diminished significantly of late. Their benefits can be very real and a solution to some of the financial threats you face in retirement.

By Kira Brecht | November 15, 2016

As baby boomers retire at the rate of 10,000 per day, many of them are woefully underfunded for their future retirement needs.

While reverse mortgages have gotten a bad rap over the last decade, the product has changed and become more regulated. Reverse mortgages are now gaining a lot of attention as a viable option for retirement income.

Most people tend to underestimate their life expectancy, save less than they should and fail to consider how much health care might cost in retirement, says David W. Johnson, associate professor of finance at the John E. Simon School of Business at Maryville University in St. Louis.

“Although we are living longer, we are also experiencing more health issues with our increased life expectancy,” Johnson says. “The typical 65-year old couple will need $305,000 to cover out-of-pocket health care costs over their lifetime. Most people have not planned for these type of expenses. Increased life expectancy and unexpected expenses increase the possibility of outliving your assets.”

As baby boomers move into retirement without sufficient income sources, many Americans are going to be unable to meet their basic financial needs in retirement, says Jamie Hopkins, associate professor at The American College of Financial Services in Bryn Mawr, Pennsylvania, and co-director at the New York Life Center for Retirement Income.

“This retirement income shortfall is nothing less than a crisis facing the United States,” Hopkins says.

Reverse mortgages are another tool in the retirement toolbox that could offer seniors cash flow needed to cover living costs. Admittedly, Americans have a strong negative bias toward reverse mortgages, Hopkins says.

“Much of that negative bias is rooted in misconceptions and issues with bygone reverse mortgage issues. The reverse mortgages of today are not the same as reverse mortgages 10 year ago. As such, reverse mortgages deserve a second look today,” Hopkins says.

“Reverse mortgage loans are one of the most misunderstood financial products in existence,” Johnson says.

One of the most common misconceptions is that the bank will own your home if you take out a reverse mortgage, says Reza Jahangiri, chief executive officer at the American Advisors Group in Orange, California.

“In actuality, with a reverse mortgage loan, borrowers retain ownership of their home, as long as they stay current on their property taxes, homeowner’s insurance and otherwise comply with the loan terms,” Jahangiri says.

“I believe in the product enough that I recommended a reverse mortgage for my own parents. I have seen firsthand how a reverse mortgage made a difference in the quality of their lives during retirement,” Johnson says.

The market has become simplified in recent years. The Home Equity Conversion Mortgage is used for nearly all reverse mortgages, Hopkins says. It is essentially a government loan sold by private companies.

“The HECM is extremely well regulated. However, that does not mean there are not differences between companies,” Hopkins says. “You should still shop around for the best rate, lender, service, and fees.”

For most seniors, the majority of their wealth is stored in their home, which is not a very liquid asset. A reverse mortgage is a way for homeowners to unlock some of the equity in their home without having to make monthly mortgage payments.

Who is eligible? To be eligible for a Home Equity Conversion Mortgage, you must be a homeowner 62 or older, own your home outright or have a low mortgage balance that can be paid off at closing with proceeds from the reverse loan. You need to have sufficient financial resources to pay for property taxes and insurance, and you must live in the home.

“The loan becomes due and payable when the last remaining homeowner leaves the home permanently,” Jahangiri says.

A reverse mortgage is a non-recourse loan, as the home is the only collateral that can be used to repay the loan balance.

“This means that if the sale of the home does not cover the entire loan balance, then FHA pays the difference, not the borrower’s family,” Jahangiri says.

How much could a borrower expect to receive? “Depending on their age, homeowners typically can tap between 50 percent and 75 percent of the home’s appraised value, with a maximum loan limit of $625,500. The older the borrower and the lower the interest rate, the higher the available loan amount,” says Tom Dickson, national leader financial advisor channel at Reverse Mortgage Funding in Bloomfield, New Jersey.

Another option that’s growing in popularity is one where a borrower takes out a reverse mortgage standby line of credit, Jahangiri says.

“This is a great option for borrowers who aren’t interested in tapping their equity unless an emergency arises or when they feel the funds are needed,” he says.

Tapping into your home equity through a reverse mortgage HECM line of credit can be an effective way to avoid selling your investments when they drop in value, Hopkins says.

“Let’s say the market drops 30 percent next year. Would you rather sell your stocks that are down 30 percent to get your retirement income or would you rather borrow from your home equity at 3 to 4 percent interest? The answer is clear,” Hopkins says. “You would be much better off using your home equity in a down market year. Doing this could substantially increase the sustainability of your retirement portfolio and help make your money last for a lifetime,” Hopkins says.

Repay loan to keep the house. If leaving your home to your heirs is important to you, a reverse mortgage may not be the best option.

“As home equity is used, fewer assets may be available to leave to your heirs,” Dickson says. “It should be noted that you can still leave the home to your heirs, but they will have to repay the loan balance.”

Just like any other financial product, it is important to educate yourself before you sign on the dotted line and it can pay to shop around.

There are about 10 reverse mortgage companies that do almost all the business in the industry, Hopkins says.

“Just like with a traditional mortgage you need to shop around,” he says. “LendingTree.com can allow you to do that. Check out at least three reverse mortgage companies before moving forward with one.”

Why Sign Up for Medicare If I Have Insurance Already?

My Comments: I’m increasingly asked about signing up for Medicare at 65 or not. This happens as more and more of us are still working at age 65 and expect to keep working for several years to come. This article by Matthew Frankel will give you the background necessary to help your decision.

by Matthew Frankel \ Jul 16, 2017

The standard eligibility age for Medicare in the United States is 65. However, many people don’t know if they need to sign up for Medicare if they already have other health insurance coverage, such as through a job, a spouse’s employer, from their former employer, or through COBRA. Here’s a quick guide that can help you determine if you need to sign up for Medicare when you turn 65 or if you can wait longer without paying a penalty.

How Medicare works with your other insurance

When you have more than one insurance provider, there are certain rules that determine who pays what it owes first and who pays based on the remaining balance. For seniors who don’t have other insurance, Medicare is obviously the primary payer. However, when you have other insurance, it’s a little more complicated.

Depending on the type of insurance you have (group coverage, retiree coverage, COBRA, marketplace coverage, etc.), Medicare can either be the primary or the secondary payer. If Medicare would be a secondary payer to your current insurance, you can delay signing up for Medicare Part B. If your current insurance would become a secondary payer to Medicare, you should sign up during your initial enrollment period, which is the seven-month period that begins three months prior to the month you’ll turn 65.

It’s also worth noting that although I’m specifically mentioning Medicare Part B, which is medical insurance, this applies to Part A (hospital insurance) as well. However, Medicare Part A is free to the vast majority of Americans, so it’s probably worth signing up for Part A whether you’re required to or not. On the other hand, Medicare Part B has a monthly premium you’ll have to pay, which is why it can make sense to delay signing up if it’s not going to be your primary insurance.

Who can delay signing up for Medicare?

So, whose insurance remains the primary payer? In a nutshell, if you have coverage through your or your spouse’s current employment, and the employer has 20 or more employees, your insurance plan remains the primary payer.

If you aren’t sure if your employer meets the “group health coverage” criteria, ask your employer’s benefits manager.

If you do qualify, you can delay signing up for Medicare for as long as you (or your spouse) are still working. Once the employment or your employer-based health coverage ends, you’ll have eight months to sign up for Medicare Part B without paying a penalty, which is a permanently higher premium.

It’s also important to note that regardless of whether you’re still working or not, if you’ve already signed up for Social Security benefits, you’ll be automatically enrolled in Medicare Parts A and B when you turn 65. If you don’t want to keep Part B, you’ll need to cancel it (instructions are on the Medicare card you’ll receive).

Who should sign up at 65, even if they have other insurance?

This leaves a fairly long list of other types of insurance that become secondary payers to Medicare. Therefore, if you’re turning 65 and any of these situations apply to you, you should sign up for Medicare during your initial enrollment period.

• You have group coverage through your or your spouse’s employer, but the employer has fewer than 20 workers.

• You have retiree coverage, either through your former employer or your spouse’s former employer.

• You have group coverage through COBRA.

• You have TRICARE, the healthcare program for military service members, retirees, and their families. Retired service members must get Medicare Part B when eligible in order to keep their TRICARE coverage. (Note: If you’re still on active duty, you don’t have to enroll in Medicare until after you retire.)

• You have veterans’ benefits.

• You have coverage through the healthcare marketplace or have other private insurance. Once your Medicare coverage begins, you’ll no longer get any reduced premium or tax credit for marketplace coverage, and you should drop this coverage as you’ll no longer need it (unless you’re not eligible for premium-free Part A, which is not common).

If one of these situations applies to you and you don’t sign up for Medicare Part B during your initial enrollment period, you could face permanently higher premiums when you do.

The New World Order Is Leaving the U.S. Behind

Friday = Random Thoughts

Some of my Facebook friends may not realize I too want Donald Trump to be successful as President. Yes, I disagree with many of his positions on issues, but that alone isn’t enough for me to oppose him at every turn.

For many years I played golf regularly with a group of perhaps 15 like minded men. We came from all kinds of backgrounds, and enjoyed the company of others, regardless of our relative skill levels at golf. If a new club member asked to join us one Saturday, we would willingly accept his presence among us. If, however, after playing 18 holes it became apparent this person was bellicose, grandstanding, loud, presumptuous and not a team player, he would not be invited back.

My reasons for opposition to his politics are not that I simply don’t like him, as suggested by a friend. Like it or not, he is the President, but I would be opposed because I find him unfit for the office. The skill set necessary to be the CEO of the world’s dominant democracy is beyond the skill set required for a reality TV show, or even building a global real estate empire on the backs of little people.

My reasons for opposition are his lack of intellectual curiosity, his lack of discipline, his disregard for what I think of as normal social norms, be they respect for women, respect for those who are physically handicapped, respect for anyone whose values do not exactly match his own.

Increasingly, his apparent inability to discipline himself and project a coherent message in support of what are presumably his core values, leaves us with a measure of uncertainty. Uncertainty over time carries with it the very real potential to cause us irreparable harm. Nature abhors a vacuum, and he is creating one that will be filled. When that happens, the outcome could be disastrous. So far he doesn’t seem to care as he insists on digging the hole ever deeper.

He lacks the skill set necessary to effectively lead ALL of us. That’s why I don’t like him.

James Gibney / Aug 11, 2017

American allies have decided Trump is simply not someone they can do business with.

Of all the global consequences of President Donald Trump’s first half-year, surely one of the most surprising is the rise in multilateral diplomacy.

After all, this is the guy who came into office pledging to put America First. He downgraded the security guarantees of the North Atlantic Treaty Organization to a definite maybe — and only if its members ponied up more defense dollars. The Iran nuclear pact was “the worst deal ever,” and the Paris accord on climate change wasn’t much better. The Trans-Pacific Partnership was dead on arrival. Japan and South Korea’s free-riding days were over. The North American Free Trade Agreement was toast. The U.S. would ignore the rules of the World Trade Organization. And from its proposed cuts in foreign aid and United Nations peacekeeping to the empty offices and embassies of the State Department, the Trump administration has made clear how little it thinks of soft power and diplomacy.

But a funny thing happened on the way to the disintegration of the international liberal order. It’s started to reconstitute itself — only not with the U.S. at its center.

Unfortunately, that has less to do with a realization among our allies and partners that the burden must be more equitably shared than with the increasing recognition that Trump is not, as some U.S. diplomats liked to say about third world dictators during the Cold War, “someone we can do business with.”

That sentiment found its most trenchant expression in German Chancellor Angela Merkel’s declaration, following Trump’s May trip to Europe, that the continent “must really take our fate into our own hands.” The net result of the Trump administration’s antipathy to free trade and cooperation on climate change and refugee resettlement was a united front against the U.S. at both the Group of Seven and Group of 20 meetings.

Jilted by the U.S., the other 11 members of the Trans-Pacific Partnership are moving ahead on their own. Canada and Mexico are working together more closely than ever to save Nafta. Asian nations are hedging their bets between the U.S. and China. Trump’s tough talk on Mexico has prompted it to reach out to its hemispheric rival Brazil on defense cooperation.

Serious differences among allies are nothing new. During the Ronald Reagan administration, for instance, hardline U.S. attitudes toward a planned gas pipeline from the Soviet Union to Europe caused a transatlantic breach that strained even the “special relationship” with the U.K. And the call for fairer burden-sharing by American treaty allies — a.k.a. the free riders — is also as old as the alliances themselves, even if Trump turned the volume up to 11.

Yet as destabilizing as Trump’s transactional mindset — we’ll protect you if you pay us — has been, his temperament has been even more destructive. In Latin America, his brash bullying plays to the worst caricature of Yanqui behavior. No wonder the foreign ministers of 12 nations in the Americas who pledged this week in Peru not to recognize Venezuela’s new constituent assembly — a remarkable regional diplomatic achievement — chose to keep the U.S. mostly out of it.

Then there is Trump’s uncoordinated impulsiveness. His “fire and fury” outburst toward North Korea upended earlier efforts by Secretary of State Rex Tillerson and Secretary of Defense James Mattis to reassure South Korea and Japan that the U.S. was not about to put them in danger. Tillerson has seen Trump repeatedly sandbag his efforts to broker a rapprochement among the U.S.’s fractious Gulf allies. And transcripts of Trump’s phone conversations with Australia’s Malcolm Turnbull and Mexico’s Enrique Pena Nieto suggest that both men could be forgiven for thinking they were dealing with Homer Simpson, not the Leader of the Free World.

Every hegemon has a sell-by date, and the U.S. is no exception. Even during the halcyon days of the 1990s — remember when the U.S. was being called a “hyperpower”? — President Bill Clinton’s administration was focused on creating institutions and a rules-based international order that it hoped would constrain China’s economic and strategic rise and extend the half-life of U.S. supremacy. For a variety of reasons, that didn’t work out so well (see: “deplorables”).

In that and other respects, the willingness of other democracies to step up on the world’s non-zero-sum challenges is welcome. Moreover, whether in matters of security or trade, Trump’s strong preference for bilateral deals that allow the U.S. to make the most of its leverage could yield clear benefits. If he and Chinese President Xi Jinping achieve a compact that balances their respective interests, so much the better. That approach could apply to U.S. relations with Japan, the U.K., and other U.S. allies and partners. Strong bilateral agreements, after all, can provide a basis for stronger multilateral ones in years to come.

But even bilateral agreements require a degree of discipline and coordination that Trump has yet to display. For now, Trump’s reflexive trashing of President Barack Obama’s policy choices without offering any coherent alternatives has left the U.S. on awkward ground. It’s one thing for other countries to fill a diplomatic vacuum created by a gradual U.S. withdrawal; it’s another for them to do so in the wake of a scorched-earth retreat. If and when the U.S. recovers its strategic senses, it might find itself reduced to occupying a much less attractive seat at the multilateral table.

This is how much fees are hurting your retirement

Thursday = Retirement Issues

My Comments: Value is in the eye of the beholder. When we need something, and for whatever reason, choose not to do it by ourselves, we spend money. If you are selling advice, or pork chops, or cars, people are going to spend money when they have to.

As a self-styled expert on retirement planning, what you pay for financial advice can run into several percentage points every year. What is your frame of reference that determines if you are getting value in exchange for what you are paying?

Aug 17, 2017 Craig L. Israelsen

This article is reprinted by permission (?) from NextAvenue.org.

The importance of keeping your investment portfolio costs low should be self-evident. They come directly out of your pocket. But you may be surprised to see how much it matters to stick with low-fee mutual funds and Exchange-Traded Funds (ETFs). I’ve run the numbers.

The two primary portfolio costs consist of what’s known as the “expense ratio” of the funds or ETFs (the annual fee charged as a percentage of assets) and the “advisory fee “(if there is a financial adviser involved).

The average expense ratio among all mutual funds is roughly 100 basis points or 1.0% (one basis point is one hundredth of 1%). Assuming an annual advisory fee of 100 basis points, or 1%, the total portfolio cost is 2% (or 200 basis points). At that level, for a diversified fund portfolio with a starting balance of $1 million, the average annual withdrawal for a retiree between age 70 and 95 is about $126,426 (assuming the retiree makes the government’s Required Minimum Distribution or RMD). Remember: this is an average withdrawal figure over a 25-year period; the actual RMD will vary each year based on your portfolio’s performance during the prior year and each year’s RMD percentage.

If the cost of funds in the portfolio is cut in half by using mutual funds or ETFs with lower expense ratios, the overall portfolio cost can be reduced from 2% to 1.5%. By doing so, the average annual withdrawal then increases to $136,218, meaning the retiree will have roughly $10,000 more income each year. That works out to a “raise” of about $830 a month during retirement.

$32,000 more a year in retirement

But you can do even better. It is now possible, by using low-cost ETFs, to build a diversified retirement portfolio for as low as .10% (or 10 basis points). If the advisory fee were reduced by a mere 10% down to .90% (or 90 basis points), the overall portfolio cost could be lowered to 1.0%. At that level, the retiree can withdraw an average of $146,853 each year — or an additional $10,000 annually.

Finally, if the adviser lowered his or her fee to .40% and the fund expenses amounted to .10%, the total portfolio cost would be just .50%. At that level, $158,407 would be the average amount withdrawn each year.

All together, by slashing fund expense ratios from 1.0% to .10% and the advisory fee from 1% to .40%, the retiree could receive $32,000 additional annual retirement income — or roughly $2,600 more each month between the ages of 70 and 95. Clearly, the impact of portfolio costs is huge.

A modern diversified portfolio

Here’s how to put together a low-cost, diversified portfolio that I call the 7Twelve® portfolio. If you use low-cost, actively managed funds from various fund families, the overall fund expense can be as low as .54%. If you use ETFs from various fund families, the cost can drop to .16%. And if you use just Vanguard ETFs, the overall fund expense ratio can be as low as .10% (I have no affiliation with Vanguard; they’re just an investment company specializing in keeping costs low).

The idea of building a diversified portfolio for as little as .10% is not theoretical. It is a reality and can and should be considered.



Craig L. Israelsen, Ph.D., teaches in the personal financial planning program at Utah Valley University in Orem, Utah. He is the author of “7Twelve: A Diversified Investment Portfolio With a Plan” and his website is 7TwelvePortfolio.com.

Trump Can’t Reverse the Decline of White Christian America

My Comments: Remember the context. Racial tension has been a hallmark of our society since the beginning. Think pilgrims vs indigenous peoples in the 1620’s. Think black vs white in the 1860’s.

Right now the tension is elevated, and coupled with Trump’s inability or unwillingness to quash the tension, overreaction is going to surface. Reaction, within limits, will allow the ideology behind the tension to fade or lose. Otherwise the message becomes all about the confrontation rather than the underlying false premises of bigotry, racism, religion and political ideology.

Robert P. Jones \ Jul 4, 2017

Two-thirds of those who voted for the president felt his election was the “last chance to stop America’s decline.” But his victory won’t arrest the cultural and demographic trends they opposed.

Down the home stretch of the 2016 presidential campaign, one of Donald Trump’s most consistent talking points was a claim that America’s changing demographics and culture had brought the country to a precipice. He repeatedly cast himself as the last chance for Republicans and conservative white Christians to step back from the cliff, to preserve their power and way of life. In an interview on Pat Robertson’s Christian Broadcasting Network (CBN) in early September, Trump put the choice starkly for the channel’s conservative Christian viewers: “If we don’t win this election, you’ll never see another Republican and you’ll have a whole different church structure.” Asked to elaborate, Trump continued, “I think this will be the last election that the Republicans have a chance of winning because you’re going to have people flowing across the border, you’re going to have illegal immigrants coming in and they’re going to be legalized and they’re going to be able to vote, and once that all happens you can forget it.”

Michele Bachmann, a member of Trump’s evangelical executive advisory board, echoed these same sentiments in a speech at the Values Voters Summit, an annual meeting attended largely by conservative white Christians. That same week, she declared in an interview with CBN: “If you look at the numbers of people who vote and who lives [sic] in the country and who Barack Obama and Hillary Clinton want to bring in to the country, this is the last election when we even have a chance to vote for somebody who will stand up for godly moral principles. This is it.” Post-election polling from the Public Religion Research Institute, which I lead, and The Atlantic showed that this appeal found its mark among conservative voters. Nearly two-thirds (66 percent) of Trump voters, compared to only 22 percent of Clinton voters, agreed that “the 2016 election represented the last chance to stop America’s decline.”

Does Trump’s victory, then, represent the resurrection of White Christian America? The consequences of the 2016 elections are indeed sweeping. Republicans entered 2017 with control of both houses of Congress and the White House. And because the Republican-controlled Senate refused to consider an Obama appointee to replace Justice Antonin Scalia, who died in early 2016, Trump was able to nominate a conservative Supreme Court justice right out of the gate. Trump’s cabinet and advisors consist largely of defenders of either Wall Street or White Christian America.

The evidence, however, suggests that Trump’s unlikely victory is better understood as the death rattle of White Christian America—the cultural and political edifice built primarily by white Protestant Christians—rather than as its resuscitation. Despite the election’s immediate and dramatic consequences, it’s important not to over-interpret Trump’s win, which was extraordinarily close. Out of more than 136 million votes cast, Trump’s victory in the Electoral College came down to a razor-thin edge of only 77,744 votes across three states: Pennsylvania (44,292 votes), Wisconsin (22,748 votes), and Michigan (10,704 votes). These votes represent a Trump margin of 0.7 percentage points in Pennsylvania, 0.7 percentage points in Wisconsin, and 0.2 percentage points in Michigan. If Clinton had won these states, she would now be president. And of course Clinton actually won the popular vote by 2.9 million votes, receiving 48.2 percent of all votes compared to Trump’s 46.1 percent. The real story of 2016 is that there was just enough movement in just the right places, just enough increased turnout from just the right groups, to get Trump the electoral votes he needed to win.

Trump’s intense appeal to 2016 as the “last chance” election seems to have spurred conservative white Christian voters to turn out to vote at particularly high rates. Two election cycles ago in 2008, white evangelicals represented 21 percent of the general population but, thanks to their higher turnout relative to other voters, comprised 26 percent of actual voters. In 2016, even as their proportion of the population fell to 17 percent, white evangelicals continued to represent 26 percent of voters. In other words, white evangelicals went from being overrepresented by five percentage points at the ballot box in 2008 to being overrepresented by nine percentage points in 2016. This is an impressive feat to be sure, but one less and less likely to be replicated as their decline in the general population continues.

Updating two trends with 2015-2016 data also confirms that the overall patterns of demographic and cultural change are continuing. The chart below plots two trend lines that capture key measures of change: the percentage of white, non-Hispanic Christians in the country and the percentage of Americans who support same-sex marriage. The percentage of white Christians in the country fell from 54 percent in 2008 to 47 percent in 2014. That percentage has fallen again in each subsequent year, to 45 percent in 2015 and to 43 percent in 2016. Similarly, the percentage of Americans who supported same-sex marriage rose from 40 percent in 2008 to 54 percent in 2014. That number stayed relatively stable (53 percent) in 2015—the year the Supreme Court legalized same-sex marriage in all 50 states—but jumped to 58 percent in 2016.

Despite the outcome of the 2016 elections, the key long-term trends indicate White Christian America’s decline is continuing unabated. Over the last eight years, the percentage of Americans who identify as white and Christian fell 11 percentage points, and support for same-sex marriage jumped 18 percentage points. In a New York Times op-ed shortly after the election, I summarized the results of the election this way: “The waning numbers of white Christians in the country today may not have time on their side, but as the sun is slowly setting on the cultural world of White Christian America, they’ve managed, at least in this election, to rage against the dying of the light.”

One of the most perplexing features of the 2016 election was the high level of support Donald Trump received from white evangelical Protestants. How did a group that once proudly identified itself as “values voters” come to support a candidate who had been married three times, cursed from the campaign stump, owned casinos, appeared on the cover of Playboy Magazine, and most remarkably, was caught on tape bragging in the most graphic terms about habitually grabbing women’s genitals without their permission? White evangelical voters’ attraction to Trump was even more mysterious because the early GOP presidential field offered candidates with strong evangelical credentials, such as Ted Cruz, a longtime Southern Baptist whose father was a Baptist minister, and Marco Rubio, a conservative Catholic who could talk with ease and familiarity about his own personal relationship with Jesus.

The shotgun wedding between Trump and white evangelicals was not without conflict and objections. It set off some high drama between Trump suitors, such as Jerry Falwell Jr. of Liberty University and Robert Jeffress of First Baptist Church in Dallas, and #NeverTrump evangelical leaders such as Russell Moore of the Southern Baptist Convention. Just days ahead of the Iowa caucuses, Falwell invited him to speak at Liberty University, where he serves as president. In his introduction, Falwell told the gathered students, “In my opinion, Donald Trump lives a life of loving and helping others as Jesus taught in the great commandment.” And a week later, he officially endorsed Trump for president. Robert Jeffress, the senior pastor of the influential First Baptist Church in Dallas and a frequent commentator on Fox News, also threw his support behind Trump early in the campaign but took a decidedly different approach. Jeffress explicitly argued that a president’s faith is “not the only consideration, and sometimes it’s not the most important consideration.” Citing grave threats to America, particularly from “radical Islamic terrorism,” Jeffress’ support of Trump for president was straightforward realpolitik: “I want the meanest, toughest, son-of-a-you-know-what I can find in that role, and I think that’s where many evangelicals are.” Moore, by contrast, remained a steadfast Trump opponent throughout the campaign. He was aghast at the high-level embrace of Trump by white evangelical leaders and strongly expressed his incredulity that they “have tossed aside everything that they previously said they believed in order to embrace and to support the Trump candidacy.”

The 2016 election, in fact, was peculiar because of just how little concrete policy issues mattered.

In the end, however, Falwell and Jeffress had a better feel for the people in the pews. Trump received unwavering support from white evangelicals from the beginning of the primaries through Election Day. As I noted at the beginning of the primary season, the first evidence that Trump was rewriting the Republican playbook was his victory in the South Carolina GOP primary, the first southern primary and one in which more than two-thirds of the voters were white evangelicals. The Cruz campaign had considered Super Tuesday’s South-heavy lineup to be its firewall against early Trump momentum. But when the returns came in, Cruz had won only his home state of Texas and neighboring Oklahoma, while Trump had swept the southern states, taking Georgia, Alabama, Tennessee, Virginia, and Arkansas. Trump ultimately secured the GOP nomination, not over white evangelical voters’ objections, but because of their support. And on Election Day, white evangelicals set a new high water mark in their support for a Republican presidential candidate, backing Trump at a slightly higher level than even President George W. Bush in 2004 (81 percent vs. 78 percent).

Trump’s campaign—with its sweeping promise to “make American great again”—triumphed by converting self-described “values voters” into what I’ve called “nostalgia voters.” Trump’s promise to restore a mythical past golden age—where factory jobs paid the bills and white Protestant churches were the dominant cultural hubs—powerfully tapped evangelical anxieties about an uncertain future.

The 2016 election, in fact, was peculiar because of just how little concrete policy issues mattered. The election, more than in any in recent memory, came down to two vividly contrasting views of America. Donald Trump’s campaign painted a bleak portrait of America’s present, set against a bright, if monochromatic, vision of 1950s America restored. Hillary Clinton’ campaign, by contrast, sought to replace the first African American president with the first female president and embraced the multicultural future of 2050, the year the Census Bureau originally projected the United States would become a majority nonwhite nation. “Make American Great Again” and “Stronger Together,” the two campaigns’ competing slogans, became proxies for an epic battle over the changing face of America.

The gravitational pull of nostalgia among white evangelicals was evident across a wide range of public opinion polling questions. Just a few weeks before the 2016 election, 66 percent of white evangelical Protestants said the growing number of newcomers from other countries threatens traditional American customs and values. Nearly as many favored building a wall along the U.S. border with Mexico (64 percent) and temporarily banning Muslims from other countries from entering the U.S. (62 percent). And 63 percent believed that today discrimination against whites has become as big a problem as discrimination against blacks and other minorities. White evangelicals also stood out on broad questions about cultural change. While Americans overall were nearly evenly divided on whether American culture and way of life have changed for worse (51 percent) or better (48 percent) since the 1950s, white evangelical Protestants were likelier than any other demographic group to say things have changed for the worse since the 1950s (74 percent).

It is perhaps an open question whether Trump’s candidacy represents a true change in evangelicals’ DNA or whether it simply revealed previously hidden traits, but the shift from values to nostalgia voter has undoubtedly transformed their political ethics. The clearest example of evangelical ethics bending to fit the Trump presidency is white evangelicals’ abandonment of their conviction that personal character matters for elected officials. In 2011 and again just ahead of the 2016 election, PRRI asked Americans whether a political leader who committed an immoral act in his or her private life could nonetheless behave ethically and fulfill their duties in their public life. In 2011, consistent with the “values voter” brand and the traditional evangelical emphasis on the importance of personal character, only 30 percent of white evangelical Protestants agreed with this statement. But with Trump at the top of the Republican ticket in 2016, 72 percent of white evangelicals said they believed a candidate could build a kind of moral dike between his private and public life. In a head-spinning reversal, white evangelicals went from being the least likely to the most likely group to agree that a candidate’s personal immorality has no bearing on his performance in public office.

Fears about the present and a desire for a lost past, bound together with partisan attachments, ultimately overwhelmed values voters’ convictions. Rather than standing on principle and letting the chips fall where they may, white evangelicals fully embraced a consequentialist ethics that works backward from predetermined political ends, bending or even discarding core principles as needed to achieve a predetermined outcome. When it came to the 2016 election, the ends were deemed so necessary they justified the means. As he saw the polls trending for Trump in the last days before the election, in no small part because of the support of white evangelicals, Russell Moore was blunt, lamenting that Trump-supporting evangelicals had simply adopted “a political agenda in search of a gospel useful enough to accommodate it.”

White evangelicals have entered a grand bargain with the self-described master dealmaker, with high hopes that this alliance will turn back the clock. And Donald Trump’s installation as the 45th president of the United States may in fact temporarily prop up, by pure exertions of political and legal power, what white Christian Americans perceive they have lost. But these short-term victories will come at an exorbitant price. Like Esau, who exchanged his inheritance for a pot of stew, white evangelicals have traded their distinctive values for fleeting political power. Twenty years from now, there is little chance that 2016 will be celebrated as the revival of White Christian America, no matter how many Christian right leaders are installed in positions of power over the next four years. Rather, this election will mostly likely be remembered as the one in which white evangelicals traded away their integrity and influence in a gambit to resurrect their past.

Meanwhile, the major trends transforming the country continue. If anything, evangelicals’ deal with Trump may accelerate the very changes it was designed to arrest, as a growing number of non-white and non-Christian Americans are repulsed by the increasingly nativist, tribal tenor of both conservative white Christianity and conservative white politics. At the end of the day, white evangelicals’ grand bargain with Trump will be unable to hold back the sheer weight of cultural change, and their descendants will be left with the only real move possible: acceptance.

This article has been excerpted from the new Afterword in the paperback version of Robert P. Jones’ book, The End of White Christian America.