Life

Review Your Home-Insurance Risks

August 2, 2018 By Twila Van Leer

Failure to update your home protection strategies could cost you as much as $10,000. A survey by Chubb recently found that although 90 percent of the included homeowners felt they were doing a good job of protecting their homes, some 64 percent had failed to update their home protection in the last year.

While most owners are concerned about fires, burglaries and other crises, they fail to realize that they can be damaged by water, the survey suggested. In fact, water damage is a more likely scenario than other emergencies that can cause damage.

About 20 percent of those queried said they install pipe insulation, and less than half check their appliance hoses regularly. Only 40 percent said they regularly maintain water heaters.

The best remedy is to talk with an insurance agent about the best coverage for your specific circumstances.

The average claim for water damage between 2012 and 2016 was nearly $10,000. That average includes some very devastating damage in some cases and makes it a very good
idea to assess your insurance coverage.

Most homeowner policies cover damage related to accidental overflow of water or steam from plumbing, heating and air conditioning as frozen pipes. Damage from a general flood is generally excluded unless you specifically pay for it. Knowing that your home is located in a recognized flood plain should be incentive for looking into specific protection.

To prevent water damage, be aware of where the main water valve in your home is located so if an emergency arises, you won’t waste time locating it. Turn off the main valve if you are leaving home to vacation or for other reasons.

Regular home inspections are wise and a safety check by a plumber every year could save money in the long run. Some insurance companies will give you a discount is you can show that you are taking these steps to protect your property. Technology is available to monitor plumbing for leaks.

Avoid Home-Buyer Mistakes

May 7, 2018 By Twila Van Leer

Buying a home is a big deal and not one to dive into without some careful study. Many first-timers in particular suffer homebuyer’s regret for failing to watch for common warning signs such as:

Failure to prepare for additional costs. What is on the price tag isn’t all there is to the financial aspect of buying a home. Be sure you are prepared for taxes, homeowner’s insurance, association fees, yard care and other items that only show up later in the process.

Not being aware of your credit score. The rate of interest you will pay — if you qualify at all — is based on your credit score. Before you start looking for a house to buy, find out what your score is. The three major credit rating companies allow a free assessment each year, so start out well advised. If your rating isn’t where you’d like it to be, make a concerted effort to pay off credit cards and collection accounts. Avoid accumulating new lines of credit and make payments on time to help bump up your score.

Failing to prequalify. Going through the prequalification process lets you go into home ownership knowing where you stand financially. You’ll be certain of what you can afford and not waste time looking at possibilities beyond your reach. A rule of thumb: Monthly costs associated with home ownership shouldn’t exceed 28 percent of your income.

Using the seller’s real estate agent. It’s better for you to have an agent focused on your interests in a possible deal. Use your agent to guide you through the maze of inspections, contracts and negotiations that surround a house purchase. Having the same agent represent both buyer and seller could lead to conflicts of interest.

Bypassing a pre-sale inspection. The best time to know if there are mold issues or leaky roofs on the house you have chosen is before you sign the final papers, not after. It may delay the final transaction briefly, but it’s worth every bit of the wait and cost.

Taking out another loan before signing. The lender will wait until the very last minute before signing to re-check your credit. Another loan may change the debt-to-income ratio and squelch your deal. Particularly if you have prequalified, another loan could significantly skew your figures. Wait on the new furniture until you actually have a place to put it.

Refusing to compromise. When you set out to buy a home, you obviously have a list of “must-haves” to guide the search. But staying within your budget is more important than most of the “must-haves.” Remember that paint can do wonders and wallpaper be replaced. You’re probably wise to limit the must-haves and be ready to be a little flexible so the budget stays intact.

Money Can Buy Happiness

March 16, 2018 By Twila Van Leer

Contrary to the common adage that says you can’t buy happiness, a massive research project conducted by Purdue University and the University of Virginia indicates that there is a certain amount of happiness that is related to satisfaction with life that comes from a certain income.

The two universities analyzed World Gallup Poll data that was gathered from 1.7 million people in 164 countries and cross-referenced earnings with life satisfaction. The results of the study were published in the journal Nature Human Behavior.

The study acknowledged that costs and standards of living varied among the countries included in the study and factored that into their conclusions.

The upshot for Americans was that an ideal income for individuals is $95,000 per year to obtain life satisfaction. Emotional well-being, the study showed, is achievable at $60,000 to $75,000 per year. Families with children, of course, will need more.

The researchers defined life satisfaction as an overall assessment of how one is doing financially. Emotional well-being related to day-to-day feelings such as happiness, sadness, excitement, anger, etc.

The extensive survey also indicated that once a threshold was reached, additional increases in income actually were associated with reduced happiness, indicating that the more people have, the more they want. They tend to compare themselves with others more often.

There is a happiness “tipping point,” the researchers concluded., related to how well an individual feels about money. A small decline in earnings causes one to relate with others who make slightly lower incomes, perhaps because of the costs that come with higher incomes, said Andrew Jebb, lead author of the study and a doctoral student at Purdue.

He noted that the findings of the large study raise issues about money and happiness across cultures. “Money is only part of what really makes us happy and we’re learning more about the limits of money.“

Get A Handle On Retirement

December 20, 2017 By Twila Van Leer

The future is a murky place. No crystal ball has yet been invented that will tell you exactly what financial realities you will face in retirement. Today’s Millennials, GenX-ers and Baby Boomers are all approaching the zero hour with lots of questions. So many variables! Marriage, babies, divorce, bills, bonuses, job changes and the country’s shifting economy all play into the equation.

Without offering a rigid, one-size-fits-all solution, here are some ideas that you might consider as you contemplate the end of your working years:

Those in their 20s and 30s are at the entry end of careers, often straddled with student debt, credit card debt and high living expenses. Nevertheless, now is the time to start thinking about retirement savings. It comes faster than you’d suppose.

Consider saving 15 percent of your pre-tax income. Sounds like a lot. But that is the figure experts in the field say is necessary to have a health retirement.
Take advantage of ”free money” such as employer-sponsored 401k programs, which often offer a matching contribution to expand the benefit. If that seems too high a goal now, put whatever you can into a work-sponsored savings option or into personal savings. Look into profit sharing options if your employer takes this approach to helping employees to a healthy retirement. If you have to start small, plan to add a percentage to your savings each year until you reach the 15 percent goal.

Plan and budget conscientiously, not haphazardly. Keep your must-have expenses at a level not more than 50 percent of your take-home pay. Some items, such as housing, food, health care, transportation, child care and debt, can’t be avoided, but they may be flexible. Study your own circumstances and determine if there are places to cut, even if it means a little temporary sacrifice to make it work. Turn down the thermostat in winter, up in the summer, to save on heating and cooling. Buy groceries and clothing when they are on sale and brown -bag it to work. Minimize eating out.

Try to have three to six months of essential expenses in a savings account in case of an extended emergency. Think of a contribution to this fund as a monthly expense, not separate from other “musts.” After you have this three-to-six-month cushion, save for short-term expenses that pop up unexpectedly. Consider having these savings taken from your paycheck and deposited in separate accounts automatically.

Especially if retirement is some decades in the future, it gives you time to ride out the inevitable rises and falls in the stock market. Stocks have traditionally produced higher long-term returns than bonds and cash, despite the volatility.

Keeping a balance between accounts where retirement withdrawals are taxable and those where withdrawals in retirement are taxable and those where withdrawals are tax free can help manages taxes when you are living on that retirement income.

An annuity is one way to create a simple and dependable income stream that is guaranteed for as long as you or your spouse lives.

Since Social Security may be a significant factor in your retirement, make the most of the government’s program. The longer you wait to take out Social Security, the higher your monthly benefit will be. For instance, in a very simple example, a person retiring at 62 may receive $1,200 per month, while one who waits until age 66 to retire will receive $1,600. If you wait until age 70 in this scenario, the monthly benefit will be $2,112 per month. The average life expectancy for a woman now is 89 years.

Married couples should look at a number of options that would maximize their retirement income through Social Security. Divorced persons also may be able to claim a former partner’s benefit, if it is larger than their own.

Although there are many variables in trying to determine how much you need to have to live on after retirement, there is a general sense that between 55 percent and 80 percent of the amount that you earned is necessary. While some expenses you have routinely paid while working, such as savings, taxes and insurance, you may find that out-balanced by new expenses such as health care, travel and new insurances.

If you are coming close to retirement, make a detailed budget to see how your money will need to be re-directed. Check your expected expenses against all potential sources of income. Personal finance experts advise that you plan to withdraw not more than 4 percent to 5 percent of your retirement assets per year, adjusted for inflation.

It is essential to have an estate plan with clear directions about who is to inherit your estate when you die. Planning goes beyond a will. You may need expert advice to help you plan distribution in a way that will help your heirs to pay less in taxes, fees and potential legal expenses.

When retirement is a considerable way down the road, it is easy to minimize the importance of budgeting and saving and chafing to have to part with money you could spend making life better in the here and now. But thousands of elderly Americans who are now scratching their way through retirement will tell you that it is worth it.

Has A Hacker Victimized You?

December 14, 2017 By Twila Van Leer

“Pwned.” Strange word that you won’t find in an English dictionary, but one that has affected people all over the world. It’s the coined word used to identify a person whose personal information has been breached when a corporate data base is hacked. Gamers recognize it as meaning “utterly defeated.”

We hear about it a lot these days. Large retailers and other companies have been attacked by hackers, compromising the data of millions of customers. Even Equifax, the credit rating company, was not immune. A breach of its data gave fraudsters millions of names to work with. The list of other well-known companies that have lost data has become long. The thieves have a hey day using the personal data for their own purposes.

Are you one of them and how can you find out?

An Australian named Troy Hunt may be able to tell you. He has accumulated some 4.8 billion pieces of hacked data and he uses it to help ordinary people determine if they have had their personal data lifted. His website, Have I Been Pwned?, has been in operation since 2013. It’s free.

Hunt has become a specialist regarding big breaches and has exposed some hack jobs before the victim companies have been aware themselves. He used to be a software architect at Pfizer, the pharmaceutical giant, but quit to work as an independent information security consultant and instructor.

The U.S. Congress recently availed itself of his expertise when he testified before that body, which has become increasingly concerned at the number of their constituents who have been victimized. He had to buy a new suit and tie (and visit a website to find out how to tie the tie.) His usual garb is beachwear or jeans — what the well-dressed Aussie wears while working on the beach.

The problem is serious. So much personal data has been breached that traditional methods for verifying identity, such as user names, passwords and/or knowledge-based questions, have become less reliable.

Hunt’s relentless search for hacked information has put him ahead of the game in several instances. He has made it harder for big companies that have been hacked to hide the fact. Uber, for instance, had failed to publicize a breach that put 57 million bits of information on passengers and drivers into the hands of fraudsters. On the other hand, when he advised Imgur, a photo-sharing corporation, that they had been hacked, they made the information public within a day.

People using his site to determine the status of their information can search Hunt’s website on their email address. Some 1.7 million people also have subscribed to alerts that sound when their data pops up in newly discovered breaches.