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Holding Equities for the Long Term: Time Versus Timing

December 30, 2018

Legendary investor Warren Buffett is famous for his long-term perspective. He has said that he likes to make investments he would be comfortable holding even if the market shut down for 10 years. Investing with an eye to the long term is particularly important with stocks. Historically, equities have typically outperformed bonds, cash, and inflation, though past performance is no guarantee of future results and those returns also have involved higher volatility. It can be challenging to have Buffett-like patience during periods such as 2000-2002, when the stock market fell for 3 years in a row, or 2008, which was the worst year for the Standard & Poor’s 500* since the Depression era. Times like those can frazzle the nerves of any investor, even the pros. With stocks, having an investing strategy is only half the battle; the other half is being able to stick to it.

Just what is long term?

Your own definition of “long term” is most important, and will depend in part on your individual financial goals and when you want to achieve them. A 70-year-old retiree may have a shorter “long term” than a 30 year old who’s saving for retirement.

Your strategy should take into account that the market will not go in one direction forever–either up or down. However, it’s instructive to look at various holding periods for equities over the years. Historically, the shorter your holding period, the greater the chance of experiencing a loss. It’s true that the S&P 500 showed negative returns for the two 10-year periods ending in 2008 and 2009, which encompassed both the tech crash and the credit crisis. However, the last negative-return 10-year period before then ended in 1939, and each of the trailing 10-year periods since 2010 have also been positive.*

The benefits of patience

Trying to second-guess the market can be challenging at best; even professionals often have trouble. According to “Behavioral Patterns and Pitfalls of U.S. Investors,” a 2010 Library of Congress report prepared for the Securities and Exchange Commission, excessive trading often causes investors to underperform the market.

The Power of Time

Note: Though past performance is no guarantee of future results, the odds of achieving a positive return in the stock market have been much higher over a 5or 10-year period than for a single year. Another study, “Stock Market Extremes and Portfolio Performance 1926-2004,” initially done by the University of Michigan in 1994 and updated in 2005, showed that a handful of months or days account for most market gains and losses. The return dropped dramatically on a portfolio that was out of the stock market entirely on the 90 best trading days in history. Returns also improved just as dramatically by avoiding the market’s 90 worst days; the problem, of course, is being able to forecast which days those will be. Even if you’re able to avoid losses by being out of the market, will you know when to get back in?

Keeping yourself on track

It’s useful to have strategies in place that can help improve your financial and psychological readiness to take a long-term approach to investing in equities. Even if you’re not a buy-and-hold investor, a trading discipline can help you stick to a long-term plan.

Have a game plan against panic

Having predetermined guidelines that anticipate turbulent times can help prevent emotion from dictating your decisions. For example, you might determine in advance that you will take profits when the market rises by a certain percentage, and buy when the market has fallen by a set percentage. Or you might take a core-and-satellite approach, using buy-and-hold principles for most of your portfolio and tactical investing based on a shorter-term outlook for the rest.

Remember that everything’s relative

Most of the variance in the returns of different portfolios is based on their respective asset allocations. If you’ve got a well-diversified portfolio, it might be useful to compare its overall performance to the S&P 500. If you discover you’ve done better than, say, the stock market as a whole, you might feel better about your long-term prospects.

Current performance may not reflect past results

Don’t forget to look at how far you’ve come since you started investing. When you’re focused on day-to-day market movements, it’s easy to forget the progress you’ve already made. Keeping track of where you stand relative to not only last year but to 3, 5, and 10 years ago may help you remember that the current situation is unlikely to last forever.

Consider playing defense

Some investors try to prepare for volatile periods by reexamining their allocation to such defensive sectors as consumer staples or utilities (though like all stocks, those sectors involve their own risks). Dividends also can help cushion the impact of price swings. If you’re retired and worried about a market downturn’s impact on your income, think before reacting. If you sell stock during a period of falling prices simply because that was your original game plan, you might not get the best price. Moreover, that sale might also reduce your ability to generate income in later years. What might it cost you in future returns by selling stocks at a low point if you don’t need to? Perhaps you could adjust your lifestyle temporarily.

Use cash to help manage your mindset

Having some cash holdings can be the financial equivalent of taking deep breaths to relax. It can enhance your ability to act thoughtfully instead of impulsively. An appropriate asset allocation can help you have enough resources on hand to prevent having to sell stocks at an inopportune time to meet ordinary expenses or, if you’ve used leverage, a margin call.

A cash cushion coupled with a disciplined investing strategy can change your perspective on market downturns. Knowing that you’re positioned to take advantage of a market swoon by picking up bargains may increase your ability to be patient.

Know what you own and why you own it

When the market goes off the tracks, knowing why you made a specific investment can help you evaluate whether those reasons still hold. If you don’t understand why a security is in your portfolio, find out. A stock may still be a good long-term opportunity even when its price has dropped.

Tell yourself that tomorrow is another day

The market is nothing if not cyclical. Even if you wish you had sold at what turned out to be a market peak, or regret having sat out a buying opportunity, you may get another chance. If you’re considering changes, a volatile market is probably the worst time to turn your portfolio inside out. Solid asset allocation is still the basis of good investment planning.

Be willing to learn from your mistakes

Anyone can look good during bull markets; smart investors are produced by the inevitable rough patches. Even the best aren’t right all the time. If an earlier choice now seems rash, sometimes the best strategy is to take a tax loss, learn from the experience, and apply the lesson to future decisions.

*Data source: Calculations by Broadridge based on total returns on the S&P 500 Index over rolling 1-, 5-, and 10-year periods between 1926 and 2014.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of  The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with  FSC Securities and may be reached at www.theretirementgroup.com.

Beyond Traditional Asset Classes: Exploring Alternatives

February 19, 2019

aerial view of landmark city

Stocks, bonds, and cash are fundamental components of an investment portfolio. However, many other investments can be used to try to spice up returns or reduce overall portfolio risk. So-called alternative assets have become popular in recent years as a way to provide greater diversification.

What is an alternative asset?

The term “alternative asset” is highly flexible; it can mean almost anything whose investment performance is not correlated with that of stocks and bonds. It may include physical assets, such as precious metals, real estate, or commodities. In some cases, geographic regions, such as emerging global markets, are considered alternative assets. Complex or novel investing methods also qualify. For example, hedge funds use techniques that are off-limits for most mutual funds, while private equity investments rely on skill in selecting and managing specific businesses. Finally, collectibles are included because the value of your investment depends on the unique properties of a specific item as well as general interest in that type of collectible.

Each alternative asset type involves its own unique risks and may not be suitable for all investors. Because of the complexities of these various markets, you would do well to seek expert guidance if you want to include alternative assets in a portfolio.

Hedge funds

Hedge funds are private investment vehicles that manage money for institutions and wealthy individuals. They generally are organized as limited partnerships, with the fund managers as general partners and the investors as limited partners. The general partner may receive a percentage of the assets, fees based on performance, or both.

Hedge funds originally derived their name from their ability to hedge against a market downturn by selling short. Though they may invest in stocks and bonds, hedge funds are considered an alternative asset class because of their unique, proprietary investing strategies, which may include pairs trading, long-short strategies, and use of leverage and derivatives. Participation in hedge funds is typically limited to “accredited investors,” who must meet SEC-mandated high levels of net worth and ongoing income (individual funds also usually require very high minimum investments).

Private equity/venture capital

Like stock shares, private equity and venture capital represent an ownership interest in one or more companies, but firms that make private equity investments may or may not be listed or traded on a public market or exchange. Private equity firms often are involved directly with management of the businesses in which they invest.

Private equity often requires a long-term focus. Investments may take years to produce any meaningful cash flow (if indeed they ever do); many funds have 10-year time horizons and you may not have access to your funds when you want them. Like hedge funds, private equity also typically requires a large investment and is available only to investors who meet SEC net worth and income requirements.

Real estate

You may make either direct or indirect investments in buildings–either commercial or residential–and/or land. Direct investment involves the purchase, improvement, and/or rental of property. Indirect investments are made through an entity that invests in property, such as a real estate investment trust (REIT), which may be either publicly traded or not. Real estate not only has a relatively low correlation with the behavior of the stock market, but also is often viewed as a hedge against inflation. However, bear in mind that physical real estate can be highly illiquid, may involve more work on your part to manage, and may be subject to weather hazards, rezoning or other factors that can reduce the value of your property. The value of a traded REIT will depend on fluctuations in the value of its real estate holdings as well as investor sentiment and market volatility. The value of a nontraded REIT is directly based on the value of its underlying real estate holdings. All REITs are subject to the risks associated with the real estate market in general. Also, some types of REITs are considered more illiquid than others, which could mean problems if you need to sell quickly.

Precious metals

Investors have traditionally purchased precious metals because they believe that gold, silver, and platinum provide security in times of economic and social upheaval. Gold, for instance, has historically been seen as an alternative to paper currency and therefore may help hedge against inflation and currency fluctuations. As a result, gold prices often rise when investors are worried that the dollar is losing value, though prices can fall just as quickly. There are many ways to invest in precious metals. In addition to buying bullion or coins, you can invest in futures, shares of mining companies, sector funds, and exchange-traded funds (ETFs).

Natural resources/equipment leasing

Direct investments in natural resources, such as timber, oil, or natural gas, can be done through limited partnerships that provide income from the resources produced. In some cases, such as timber, the resource replenishes itself; in other cases, such as oil or natural gas, it may be depleted over time. Timberland also may be converted for use as a real estate development. Some limited partnerships pool your money with that of other investors to invest in equipment leasing businesses, giving you partial ownership of the equipment those businesses lease out, such as construction equipment.

Commodities and financial futures

Commodities are physical substances that are fundamental to creating other products and are basically indistinguishable from one another. Examples include oil and natural gas; agricultural products; livestock such as hogs; and metals such as copper and zinc. Commodities are typically traded through futures contracts, which promise delivery on a certain date at a specified price. Futures contracts also are available for financial instruments, such as a security, a stock index, or a currency. Though the futures market was created to facilitate trading among companies that produce, own, or use commodities in their businesses, futures contracts also are bought and sold as investments in themselves, and some mutual funds and ETFs are based on futures indexes. Futures allow an investor to leverage a relatively small amount of capital. However, they are highly speculative, and that leverage also magnifies the potential for loss in a relatively short period of time.

Art, antiques, gems, and collectibles

Some investors are drawn to these because they may retain value or even appreciate as inflation rises. However, those values can be unpredictable because they are affected by supply and demand, economic conditions, and the quality of an individual piece or collection.

Why invest in alternative asset classes?

Part of sound portfolio management is diversifying investments so that if one type of investment is performing poorly, another may be doing well. As previously indicated, returns on some alternative investments are based on factors unique to a specific investment. Also, the asset class as a whole may behave differently from stocks or bonds.

An alternative asset’s lack of correlation with other types of investments gives it potential to complement more traditional asset classes and provide an additional layer of diversification for money that is not part of your core portfolio, though diversification cannot guarantee a profit or ensure against a loss.

Tradeoffs you need to understand

Alternative assets can be less liquid than stock or bonds. Depending on the investment, there may be restrictions on when you can sell, and you may or may not be able to find a buyer. Performance, values, and risks may be difficult to research and assess accurately. Also, you may not be eligible for direct investment in hedge funds or private equity.

The unique properties of alternative asset classes also mean that they can involve a high degree of risk. Because some are subject to less regulation than other investments, there may be fewer constraints to prevent potential manipulation or to limit risk from highly concentrated positions in a single investment. Finally, hard assets, such as gold bullion, may involve special concerns, such as storage and insurance, while natural resources and commodities can suffer from unusual weather or natural disasters.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of  The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with  FSC Securities and may be reached at www.theretirementgroup.com.

TRG Privacy Policy 2012

February 19, 2019

The Retirement Group, LLC

2012 Privacy Policy

The Retirement Group, LLC requires that you provide current and accurate financial and personal information. The information that you provide is owned by The Retirement Group, LLC.  The Retirement Group, LLC will protect the information you have provided in a manner that is safe, secure, and professional. The Retirement Group, LLC and its employees are committed to protecting your privacy and to safeguarding that information.

Safeguarding Customer Documents

We collect public and non-public customer data (i.e. name, address, social security #, date of birth, net worth…) from checklists, forms, in written notations, and in documentation provided to us by our customers for investment and consulting services.

During regular business hours, access to customer records is monitored so that only those with approval may access the files. During hours in which the company is not in operation, the customer records will be locked.

No individual who is unauthorized shall obtain or seek to obtain personal and financial customer information. No individual with authorization to access personal and financial customer information shall share that information in any manner without the specific consent of a firm principal. Failure to observe The Retirement Group, LLC procedures regarding customer and consumer privacy will result in discipline and may lead to termination.

Sharing Nonpublic Personal and Financial Information

The Retirement Group, LLC is committed to the protection and privacy of its customers’ and consumers’ personal and financial information.  The Retirement Group, LLC will not share such information with any affiliated or nonaffiliated third party except:

  • When necessary to complete a transaction in a customer account, such as with the clearing firm or account custodians;
  • When required to maintain or service a customer account;
  • To resolve customer disputes or inquiries;
  • With persons acting in a fiduciary or representative capacity on behalf of the customer;
  • With insurance rating agencies, persons assessing compliance with industry standards, or to the attorneys, accountants and auditors of the firm;
  • In connection with a sale or merger of The Retirement Group’s business;
  • To protect against or prevent actual or potential fraud, identity theft, unauthorized transactions, claims or other liability;
  • To comply with federal, state or local laws, rules and other applicable legal requirements;
  • In connection with a written agreement to provide investment management or advisory services when the information is released for the sole purpose of providing the products or services covered by the agreement;
  • In any circumstances with the customer’s instruction or consent; or
  • Pursuant to any other exceptions enumerated in the California Information Privacy Act.
Opt-Out Provisions

It is a policy of The Retirement Group, LLC not to share nonpublic personal and financial information with affiliated or unaffiliated third parties except under the circumstances noted above. Since sharing under the circumstances noted above is necessary to service customer accounts or is mandated by law, there are no allowances made for clients to opt out.

If you have any questions regarding The Retirement Group, LLC Privacy Policy, you may contact the Operations department at 1-800-900-5867 or email operations@theretirementgroup.com.

Contemplating Bankruptcy

February 19, 2019

John Jastremski Presents:

 

Contemplating Bankruptcy

 

Filing bankruptcy can be complex and difficult, and it can have lasting effects. You should consider what’s involved carefully before deciding if it’s the right answer for you. Don’t expect bankruptcy to offer you an easy solution to your overspending habits or financial mismanagement. It’s intended to relieve you of burdensome debts incurred due to unfortunate circumstances such as medical problems or unemployment.
To file or not to file

How do you know if you should go bankrupt? If your situation is temporary and will change for the better in the near future, you may just need some breathing room. Contact your creditors; they may offer to lower your payments or interest rate under a hardship program. Or perhaps a credit counseling service can help you restructure your debt and get on your feet again. In fact, for bankruptcy filings, credit counseling is a prerequisite.

Then again, you may not see your income going up in the foreseeable future, or maybe you can’t cut your living expenses any further. Perhaps your pleas to restructure your debt have fallen on deaf ears or the relief you’ve been offered isn’t enough to help. Maybe now it’s time to consider bankruptcy.
Personal bankruptcy in general

There are two types of personal bankruptcy, Chapter 7 and Chapter 13. Under Chapter 7, assets are sold to pay creditors and the debt that’s left is discharged. If you file under Chapter 13, on the other hand, you probably won’t have to sell assets, but all of your disposable income will go to pay creditors for a specified period of time, most likely five years.

Each chapter has its own rules regarding what assets you can keep (so-called exempt property) and what debts you can be discharge (some debts, such as student loans, are nondischargeable), among other things.
How Chapter 7 works

Generally, Chapter 7 is a liquidation proceeding with the court determining what property, if any, you have to sell to pay your debts.

By law, you get to keep certain exempt property. There are federal bankruptcy exemptions and each state has its own exemptions. Depending on the state in which you live, you may be able to choose between the federal or state exemptions, or you may have to use your state’s exemptions. Exemptions generally include specific amounts for your home, car, jewelry, tools of trade, household goods and furnishings, and retirement savings.

Property that is not exempt may be sold to repay your creditors (at least in part). Unsecured debts that remain unpaid are then discharged, with certain exceptions such as tax debts, student loans, domestic support payments, and debts resulting from fraud or driving while intoxicated.

If you go bankrupt against a secured debt, such as a mortgage or a car loan, the collateral securing the debt–the house or the car–will either revert to the lender or be sold with the proceeds going to the lender as at least a partial satisfaction of that secured debt.
How Chapter 13 works

Under Chapter 13, often referred to as wage earner’s bankruptcy, you aren’t required to sell assets to satisfy creditors. Instead, your debts are reorganized under a plan and you repay them, fully or partially, over a three-year or five-year period with your disposable income (money you have left over after meeting your normal monthly living expenses). If you complete the plan successfully, unsecured debts that remain unpaid are then discharged, with certain exceptions.

Chapter 13 is often used to forestall and ultimately prevent foreclosure on real property, such as your home. To accomplish this, you would have to continue to make your regular monthly payments directly to the mortgage lender, plus you make separate catch up payments on overdue amounts according to a schedule spelled out in the Chapter 13 plan. If you complete the repayment schedule successfully, your mortgage would again be considered up to date.
Determining whether to file under Chapter 7 or Chapter 13

An income eligibility test will be applied to all Chapter 7 petitions; if your income is above the median income level in your state, and you’re capable of repaying a specified portion of your unsecured debt, you’ll be required to file under Chapter 13.
Life after bankruptcy

A bankruptcy notation will appear on your credit report for 10 years. It’s a serious blemish that can affect you in many ways. Aside from the difficulty it will cause when you try to get new credit, insurance companies may correlate your ability to pay your debts with your ability to make premium payments. As a result, a bankruptcy notation on your credit report may make it difficult (and more expensive) to get certain types of insurance. What’s more, an employer may take your credit history into account when deciding to hire or promote you.

Of course, you’ll be able to get credit again, but you may have to pay higher interest rates or provide a cosigner or collateral to get started. Getting new credit will help you establish a new track record. But be careful; you won’t be able to declare bankruptcy again for several years.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

MARKET WEEK: JUNE 27, 2011

February 19, 2019

John Jastremski Presents:

 

MARKET WEEK: JUNE 27, 2011
The MarketsBack to square one: The NASDAQ finally managed to turn around its five-week losing streak, putting it at dead flat for the year, while the small-cap Russell 2000 had the best week experienced by any of the four domestic indices since the beginning of May. However, the S&P 500 and Dow industrials saw their seventh loss in the last eight weeks; the S&P barely managed to stay in the plus column for 2011. Anxiety continued to send investors flocking to Treasuries; as prices rose, the 10-year yield returned to last November’s levels.
Market/Index 2010 Close Prior Week As of 6/24 Week Change YTD Change
DJIA 11577.51 12004.36 11934.58 -.58% 3.08%
NASDAQ 2652.87 2616.48 2652.89 1.39% 0.00%
S&P 500 1257.64 1271.50 1268.45 -.24% .86%
Russell 2000 783.65 781.75 797.79 2.05% 1.80%
Global Dow 2087.44 2048.94 2041.17 -.38% -2.22%
Fed. Funds .25% .25% .25% 0 bps 0 bps
10-year Treasuries 3.30% 2.94% 2.88% -6 bps -42 bps

Last Week’s Headlines

  • As Greece’s government survived a key parliamentary vote of confidence, it reaffirmed its intent to obtain parliamentary approval of a €28 billion, five-year program of spending cuts and tax increases by the end of the month. European leaders have said the unpopular austerity package must be approved this week for Greece to receive the next installment of its existing aid package in July and increase its chances of obtaining a second.
  • New single-family home sales fell 2.1% in May, the Commerce Department said, though they were 13.5% above last May’s number. Existing home sales were even weaker; hurt by severe weather and expensive gas, they fell 3.8% during the month and more than 15% from last year, according to the National Association of Realtors®.
  • Promising some relief from those high gas prices, oil fell to roughly $90 a barrel after the International Energy Agency announced that the United States and 27 other countries would release some strategic reserves to replace supplies lost from Libya.
  • The Federal Reserve lowered its estimate of U.S. economic growth for the rest of the year from 3.1%-3.3% to 2.7%-2.9%. However, the Fed’s statement also said that some of the reasons for that sluggish growth, such as high oil prices and supply-chain disruption, should be temporary. There was no suggestion of new easing measures once QE2 ends this week. Chairman Ben Bernanke left the door open to the possibility of setting an acceptable target range for inflation.
  • The Bureau of Economic Analysis’s final estimate of first-quarter economic growth rose slightly to 1.9%, but it was still far below the 3.1% of Q4 2010. Corporate profits rose by $48.7 billion in the first quarter, up from Q4’s $38.2 billion. However, taxes, inventory, and capital consumption adjustments cut that increase to $15.5 billion.
  • After falling the previous month, durable goods orders were up 1.9% in May, according to the Commerce Department.

Eye on the Week Ahead

The Greek parliament’s midweek vote on budgetary reforms will be key. And investors have a few more days to anticipate how the end of quantitative easing might affect markets.

Key dates and data releases: personal income/spending (6/27); home prices (6/28); pending home sales (6/29); U.S. manufacturing, construction spending (7/1).

Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. Equities data reflect price change, not total return.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

Types of Insurance

February 19, 2019

John Jastremski Presents:

 

Types of Insurance

 

Each day, you face a variety of risks–risks to your life, your health, and your property. Although you can’t eliminate many of these risks, you can take steps to guard against resulting financial losses. That’s where insurance comes in. If your coverage is sufficient, insurance can provide both peace of mind and financial security to you and your loved ones. Many types of insurance coverage are available–here’s a brief overview of what’s out there.
Life insurance

Life insurance provides funds for your surviving loved ones when you die. Your family can use the proceeds to meet a variety of goals. For example, they can use them to replace income lost as a result of your death, to meet periodic expenses, to pay debts you’ve left behind, to help with college tuition and retirement, and to pay for your final expenses and estate taxes. The proceeds are typically paid as a lump sum but may also be paid in installments.

You can obtain life insurance coverage through work, through another organization (e.g., a club or association to which you belong that sponsors a group policy), or by purchasing an individual policy directly from an insurance company. The two basic types of life insurance are term life and permanent (cash value) life. Term life provides life insurance coverage for a specified period of time, while permanent insurance provides protection for your entire life. Permanent life insurance can be further broken down into several types, including whole life, variable life, and variable universal life.

Note: Variable life insurance and variable universal life insurance policies are offered by prospectus, which you can obtain from your financial professional or the insurance company. The prospectus contains detailed information about investment objectives, risks, charges, and expenses. You should read the prospectus and consider this information carefully before purchasing a variable life or variable universal life insurance policy.
Health insurance

Health insurance can safeguard your assets from the high costs of health care. Most people lack the financial resources needed to pay medical expenses associated with a health crisis (e.g., life-threatening illness or significant injury). In addition, the costs of physical exams, prescription drugs, hospital stays, pregnancy, and routine medical conditions can add up and cause you to suffer financial hardship if you must pay for them entirely on your own.

Health insurance pays for all or a portion of specified medical costs. The cost and range of protection that your health insurance provides will depend on your insurance company and the particular policy you purchase. You may be able to obtain health insurance coverage through your employer; through an association, club, or other organization; or on your own by purchasing a policy directly from an insurance company.
Auto insurance

Car ownership involves several risks. In a car accident, people may be injured and vehicles or other property damaged. Liability claims against you can put your assets at risk. Loss can also occur through theft, vandalism, or natural disasters. Auto insurance protects you against these risks. A personal auto policy is a contract between you and your insurer that specifies each party’s rights and obligations. State law and/or your lender may require you to purchase at least a minimum amount of auto insurance coverage. Depending on your circumstances, you may wish to purchase additional protection. You can compare auto insurance policies in terms of price, coverage, exclusions, and reputation of insurer.
Homeowners insurance

Homeowners insurance provides coverage if your home is damaged or destroyed. It can also cover your possessions and provide you with compensation for liability claims, medical expenses, and other expenditures that result from property damage and bodily injury suffered by you or others. If you have a mortgage on your home, your lender may require homeowners insurance. Even if you own your home outright, though, you’ll still need homeowners insurance to protect your interests and safeguard your assets. The cost of homeowners insurance depends on several factors, including the amount of your coverage, any endorsements you add to the policy, and policy deductibles.

Condominium and co-op insurance, although similar, differ in some respects from standard homeowners insurance. And if you rent your home, you may want to look into renters insurance.
Disability insurance

The threat of a major disability poses one of the greatest risks to your income. A serious illness or injury can put you out of work for a prolonged period or even permanently. If you had to stop working, how would you meet your expenses? Disability insurance policies pay you a benefit that replaces part of your earned income (usually 50 to 70 percent) when you can’t work. You may be able to obtain short-term or long-term disability coverage, or both. In general, disability insurance can be split into three types: private insurance (individual policies bought from an insurance company), group policies typically provided through your employer, and government insurance (social insurance provided through state or local governments).
Long-term care insurance

Your chances of requiring some sort of long-term care increase as you get older. Will you have the financial resources to fund a prolonged nursing home stay for yourself or a loved one? Long-term care insurance pays a selected dollar amount per day (for a set period) for the type of long-term care outlined in your policy. Depending on your policy, care can be provided in a variety of settings, including private homes, assisted-living facilities, adult day-care centers, hospices, and nursing homes. Most policies provide that certain physical and/or mental impairments trigger benefits. The cost of a policy depends on many factors, including the types of benefits, your health, and your age when you purchase the policy.
Business insurance

No matter how careful you are in running your business, accidents happen. If you’re a business owner, you’ll need to plan for these and other risks. You may be interested in several different types of insurance coverage–property and casualty insurance, liability insurance, and group health, life, and disability insurance coverage for your employees. You can buy various types of insurance protection separately, or you can purchase one package that covers many potential hazards. You can also use insurance to protect your business against the loss of a key employee or to transfer a business interest at your death or disability.
Other forms of insurance

There are many other types of insurance, including flood insurance, travel and accident insurance, insurance for your boat or other watercraft, umbrella liability insurance, and even pet insurance. Speak with an insurance professional to learn more about the products available to you.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

Traditional Whole Life Insurance

February 19, 2019

John Jastremski Presents:

 

Traditional Whole Life Insurance

 

Traditional whole life insurance, also known as ordinary life or straight life, is a type of permanent (cash value) insurance that provides coverage for your entire life. This kind of policy is sometimes described as plain vanilla insurance. You pay a fixed amount, known as a level premium, each payment period (monthly, quarterly, semiannually, or annually), and a guaranteed death benefit goes to your beneficiary when you die. Your premium amount is guaranteed to remain level for as long as you live, even if the insurance company’s costs rise. When you reach old age, your premium will not increase over the amount you paid when you started the policy.
How a traditional life insurance policy works

The insurance company calculates level premiums sufficient to pay the cost of your insurance coverage (mortality costs) to the end of your life. In the policy’s early years, the level premiums are higher than the mortality costs. The difference between the mortality costs and the level premiums is placed into a cash reserve account known as the cash value. In later years, as mortality costs rise due to your advancing age, your level premiums are lower than the mortality costs, and your policy draws on the cash value to help pay the insurance costs. As the cash value accumulates over the years, the amount of your actual insurance coverage is reduced by an equal amount.

For example, say you buy a $100,000 policy at age 30. Since you have no cash value in the beginning, you are paying for $100,000 of insurance coverage. If you have $10,000 of cash value by age 40, you’ll then be paying for $90,000 of coverage. Your cash value will continue to rise, and the amount of insurance coverage will continue to fall.

If you continue to keep up your premium payments, your cash value will eventually grow to an amount equal to your policy’s death benefit. In fact, if you happen to live to the policy’s maturity date (generally age 95 or 100), the company will pay the accumulated cash value (by then equal to the death benefit) to you. But if you die at any time before you reach the maturity date, your beneficiary receives the full, guaranteed death benefit, no matter what the amount of your cash value at the time of your death.
Accessing your money in the policy

Your cash value can be used as collateral to obtain policy loans from the insurance company at interest rates stated in the policy contract. This rate is often fixed, typically about 8 percent, or it may vary according to an index. These loans are tax free and will not affect the growth of your cash value. But remember, the cash value is designed to support your policy’s death benefit. If you are unable to repay the loan, the proceeds paid to your beneficiary after your death will be reduced by the amount of the loan, plus outstanding interest. The other way to access the cash value of your traditional whole life insurance policy is through a complete or partial surrender (cancellation) of your policy. However, surrender will terminate all or part of your coverage and may have tax consequences.
Policy dividends

For policyowners, an additional benefit contained in some life insurance policies is dividends. In order for a policy to pay dividends, it must be a participating policy. Nonparticipating policies pay no dividends. Dividends are not guaranteed, but are paid at the discretion of the insurance company’s board of directors, depending on a company’s expenses, the performance of its investments, and the amount of death benefit payouts made in a year. The amount you receive is determined by a formula that takes into account the policy series, the size of your policy, your age, and the number of years the policy has been in force.

Policy dividends are free from income tax because they’re considered a return of premiums you have paid and can be taken in cash, used to pay some or all of the policy premium, reinvested to gain (taxable) interest, or used to buy paid-up insurance additions to the policy (for which no further premiums are required). You may surrender accumulated paid-up additions in later policy years and use the proceeds to pay the regular policy premiums.
Other uses of cash value

If the time comes when you feel you are unable to continue making premium payments or you feel you have more insurance coverage than you need, but you don’t want to surrender or take a loan against the policy, you have a number of alternatives. Based on the size of your cash value account, you could use your cash value to purchase what is known as reduced paid-up insurance, whereby your coverage amount is lowered and no further premiums are required. Or, you could turn the cash value into extended term insurance, which would provide the same level of death benefit you now have, but for a limited period of time.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

POS Plans

February 19, 2019

John Jastremski Presents:

 

POS Plans

 

You’re not alone if you’re feeling confused by health-care plans that offer you benefits with one hand and place restrictions on you with the other. Fortunately, the world of managed care has begun to loosen up. And point of service (POS) plans may be leading the way. A POS plan is a type of managed care health system that maintains a network of physicians, hospitals, medical labs, and pharmacies for the health care of its members. POS plans blend the provisions of two major managed care models, combining the low out-of-pocket costs of health maintenance organizations with the flexibility of preferred provider organizations.
A quick overview of managed care

Managed care systems were developed to provide health care to members at a reasonable price. Costs are controlled in several ways. One way is to limit medical procedures that the plan considers unnecessary or inappropriate. Many traditional health insurance plans, in contrast, generally pay for the medical expenses incurred by its members without imposing stringent cost controls. Another measure that managed care providers use to hold down costs is to subsidize prevention and wellness programs, such as smoking-cessation classes, health education classes, and memberships to fitness clubs. The healthier you are, the less need you may have for medical care.
Your primary care physician is the gatekeeper to further care

As a member of a POS plan, you’ll be expected to choose a primary care physician (PCP) from a network of doctors sponsored by the plan. Your PCP acts as your main contact within the network and is responsible for most of the care you receive on a regular basis. In addition, your PCP is said to act as a gatekeeper by coordinating your access to specialists and other caregivers within the network. But you may go to physicians outside the network if you choose.
If you need a specialist, it’s best to get a referral

If you develop a medical condition requiring specialized care, you must get a referral from your PCP before you seek care from a specialist or another physician within the network. This screening process helps to reduce costs for both the POS and its members. If your PCP doesn’t provide the referral you feel that you need, you can go outside the POS network for treatment and see any doctor or specialist you choose without consulting your primary physician.
You can choose to go outside the network, but at a price

A POS plan allows you the freedom to seek care outside its network of providers. If you choose, you can even mix the types of care you receive. For example, your child could see a pediatrician outside of the network, while you continue to receive health care from network providers. Of course, you’ll pay substantially more out-of-pocket charges for any medical care your family receives from a non-network provider–encouraging you to stay within the network, but notrequiring it. When using health-care services within the plan’s network, you generally pay no deductible and only a minimal co-payment. If you go outside the network, you’ll likely be subject to a deductible and may have to pay a substantial portion of the non-network physician’s charges.
You’ll pay nominal co-payments for network care

Co-payments are usually minimal for POS network care, often running about $10 per treatment or office visit. You always retain the right to seek care outside the network at a lower level of coverage. But substantial co-payments for care outside your POS network give you a strong financial incentive to stay inside the network for most or all of your medical needs. For example, your co-payment may be only $10 for care obtained from network physicians, but you could be responsible for up to 30 or 40 percent of the cost of treatment provided by a non-network provider.
There’s generally no deductible for network care

When you choose to use network providers, there is generally no deductible. So, coverage begins from the first dollar you spend as long as you stay within the POS network of physicians. But an annual deductible must be met for out-of-network care. In most cases, you must pay a specified amount out of your own pocket before coverage begins. On average, individual deductibles are around $300 per year for an individual and $600 for a family. This deductible amount is in addition to your co-payments.
You should expect an annual cap on your out-of-pocket costs

Your annual out-of-pocket costs are generally limited to a maximum dollar amount stated in the policy. The annual limit on your health expenses for a POS plan, including deductibles and co-payments, is typically around $2,500 for an individual and $4,000 for a family. If you don’t know what the cap on your annual payments is, talk to your insurance company or plan administrator.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

Life Insurance and Charitable Giving

February 19, 2019

John Jastremski Presents:

 

Life Insurance and Charitable Giving

 

Life insurance can be an excellent tool for charitable giving. Not only does life insurance allow you to make a substantial gift to charity at relatively little cost to you, but you may also benefit from tax rules that apply to gifts of life insurance.
Why use life insurance for charitable giving?

Life insurance allows you to make a much larger gift to charity than you might otherwise be able to afford. Although the cost to you (your premiums) is relatively small, the amount the charity will receive (the death benefit) can be quite substantial. As long as you continue to pay the premiums on the life insurance policy, the charity is guaranteed to receive the proceeds of the policy when you die. (Guarantees are subject to the claims-paying ability of the issuing insurance company.) Since life insurance proceeds paid to a charity are not subject to income and estate taxes, probate costs, and other expenses, the charity can count on receiving 100 percent of your gift.

Giving life insurance to charity also has certain income tax benefits. Depending on how you structure your gift, you may be able to take an income tax deduction equal to your basis in the policy or its fair market value (FMV), and you may be able to deduct the premiums you pay for the policy on your annual income tax return. When an insurance contract is transferred to a charity, the donor’s income tax charitable deduction is based on the lesser of FMV or adjusted cost basis.
What are the disadvantages of using life insurance for charitable giving?

Donating a life insurance policy to charity (or naming the charity as beneficiary on the policy) means that you have less wealth to distribute among your heirs when you die. This may discourage you from making gifts to charity. However, this problem is relatively simple to solve. Buy another life insurance policy that will benefit your heirs instead of a charity.
Ways to give life insurance to charity

The simplest way to use life insurance to give to a charity is to name a charity to receive the benefits of your life insurance policy. You, as owner of the policy, simply designate the charity as beneficiary. Designating the charity as beneficiary may allow you to make a larger gift than you could otherwise afford. If the policy is a form of cash value life insurance, you still have access to the cash value of the policy during your lifetime. However, this type of charitable gift does not provide many of the income tax benefits of charitable giving, because you retain control of the policy during your life. When you die, the proceeds are included in your gross estate, although the full amount of the proceeds payable to the charity can be deducted from your gross estate.

Another alternative is to donate an existing life insurance policy to charity. To do this, you must assign all rights in the policy to the charity. You must also deliver the policy itself to the charity. By doing this, you give up all control of the life insurance policy forever. This strategy provides the full tax advantages of charitable giving because the transfer of ownership is irrevocable. You may be able to take an income tax deduction equal to the lesser of your adjusted cost basis or FMV. The policy is not included in your gross estate when you die, unless you die within three years of the transfer. In this case, your estate would get an offsetting charitable deduction.

A creative way to use life insurance to donate to a charity is simply for the charity to insure you. To use this strategy, you would allow the charity to purchase an insurance policy on your life. You would make annual tax-deductible gifts to the charity in an amount equal to the premium, and the charity would pay the premium to the insurance company.

One final method is to use a life insurance policy in conjunction with a charitable remainder trust. This strategy is relatively complex (it will require an attorney to set up), but it provides greater advantages than other, simpler methods. You set up a charitable remainder trust and transfer ownership of other, income-producing assets to the trust. The income beneficiary of the trust (you or whomever you designate) will get the income from the assets in the trust. At the end of the trust term (which might be a certain number of years or upon the occurrence of a certain event, such as your death), the property in the trust would pass to the charity. You’ll receive a current tax deduction when you establish the trust for the FMV of the gifted assets, reduced according to a formula determined by the IRS. Life insurance can then be purchased (usually inside an irrevocable life insurance trust to keep the proceeds out of your estate) to replace the assets that went to the charity instead of to your heirs.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

Are You Covered If . . . ?

February 19, 2019

John Jastremski Presents:

 

Are You Covered If . . . ?

 

If something just happened and you need to know if you’re covered, you should immediately call your insurer or agent or take a look at your policy. But if you’re simply wondering what’s covered (and what’s not) for future reference, you might start by familiarizing yourself with some real-life scenarios.
A word of caution

It’s important to understand a few things upfront. First, there are several types of standard homeowners policies, and each provides different coverage. What’s more, even policies of the same type often don’t provide exactly the same coverage. Another key point: To say that you’re covered for something doesn’t always mean that you’re fully covered. Out-of-pocket deductibles typically apply to the dwelling and personal-property portions of your policy, and every part of your policy is subject to coverage limits. Losses that exceed these limits must be paid out of your own funds.
Your house: are you covered if . . . ?

  • Lightning strikes a power line leading to your house and starts a fire? Yes. Fire damage is standard coverage.
  • A delivery truck careens off the road and smashes into your house? Yes. Damage from vehicles is standard coverage.
  • A pipe bursts in your cellar and covers your downstairs room with water? Yes. Water damage from burst pipes is standard coverage.
  • A huge gust of wind blows a tree onto your house? Yes. Windstorm damage is standard coverage in most parts of the country.
  • A repairperson damages your walls and ceilings? Yes. It doesn’t matter who caused the damage.
  • The river behind your house floods, and you have water damage? No. Flood protectionrequires separate insurance. So does earthquake coverage.
  • Your house slides down a cliff? No. You need separate insurance to protect against this.
  • Mice infest your home and chew up your insulation? No. The same exclusion applies to infestation by insects and other pests.
  • The market value of your home plummets? No. Market value has nothing to do with insurance that is based on replacement cost.
  • A house that you haven’t lived in for months is vandalized? No. To be covered, the house can’t have been vacant for more than 30 days.
  • You need to upgrade your home to meet local building codes? It depends. You may need an optional endorsement for this.
  • Your home is damaged by water coming in from backed-up sewers? It depends. This coverage may also require an endorsement.

Your personal property: are you covered if . . . ?

  • A wild animal gets into your house and rips apart your upholstery? Yes, unless the animal is a rodent or a pet of yours. If the rodent or pet causes a fire, you’re covered for the fire damage.
  • A thief breaks into your home and steals your stereo, jewelry, and the family silver? Yes, but keep in mind that separate coverage maximum limits apply to some types of personal property.
  • Your golf clubs are stolen from the trunk of your car? Yes (even though the theft occurred off your premises), but you may not receive the full replacement value.
  • Your wardrobe is ruined by the smoke from a fire? Yes. Clothing falls under personal property coverage.
  • The power goes out on your block, causing the food in your refrigerator to spoil? Yes, under most policies ($500 is a standard limit).
  • The laptop computer that you use for your home business is stolen? No. The laptop would be covered only if it were for personal use at home.
  • Your boat is damaged in a storm? No, unless it meets the requirements for a “small-motor” boat. Boats generally require separate insurance.
  • Your central air-conditioning breaks down in the middle of summer? No. Homeowners insurance doesn’t cover heating, cooling, and plumbing systems or home appliances for simple breakdown. If they are damaged by a covered peril, such as fire, they are covered.
  • A repairperson scratches up your furniture? No, in most cases. Damage to your personal property is usually covered only when it’s caused by a named peril (e.g., fire or vandalism).
  • A company dumps toxins into the creek that runs through your yard? No. The company that did this would be responsible for the cleanup bill and other damages.
  • Your fine art collection is stolen? It depends. In many cases, you need a special endorsement to cover valuable art and antiques.
  • The movers you hired damage your belongings? It depends. Some policies will cover insured property during a move. Otherwise, you need separate transit insurance.

Your liability: are you covered if . . . ?

  • You accidentally leave your boots on the front step, and your invited neighbor trips over them, breaking her hip? Yes. This is a straightforward liability question.
  • You accidentally run your shopping cart over a man’s foot at the grocery store, breaking his foot? Yes. Your liability coverage protects you off your premises as well as on.
  • Your son hits a baseball through your neighbor’s window? Yes, as long as your son didn’t break the window on purpose.
  • Your dog bites a passerby on the street? Yes. However, many insurers will cover you only for a certain number of dog bites (in some cases, only one).
  • After an accident at your home, the injured party brings a lawsuit against you, and you’re saddled with legal fees? Yes. Most homeowners policies cover the costs of defending you against lawsuits.
  • A client is injured by falling boxes in your home office? No. Separate liability coverage is needed when you run a business out of your home.
  • You’re renting out part of your house, and your tenant’s stuff is stolen from the premises? No, and you’re not liable, either. Your tenant needs renters insurance to protect his or her belongings.
  • You beat up someone who insulted your wife? No. Homeowners insurance does not cover liability arising from injuries you have intentionally caused.
  • You throw a rock at a squirrel and it hits and injures a neighbor? Yes, because even though throwing the rock was an intentional act, you didn’t mean to hurt your neighbor.
  • You swing the sail on your boat and accidentally hit your passenger with it? No. Homeowners insurance does not cover liability arising from the use of boats and watercraft.
  • You accidentally run someone over while driving down the street? No, because your auto insurance would cover your liability in a case like this.
  • A tree falls from your yard into your neighbor’s yard, breaking his fence? It depends. Your neighbor’s insurance would generally cover damage to his own property. However, if you were negligent (e.g., your neighbor told you the tree was dying, and you did nothing), you’d have to turn to your own liability coverage.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.

Driving Defensively at Any Age

February 19, 2019

John Jastremski Presents:

 

Driving Defensively at Any Age

 

Ah, the lure of the road! There’s nothing like the ability to hop in the car and go. Driving gives us a sense of freedom, mobility, and convenience. If you want to stay safe (and keep your insurance premiums low), you’ll need to drive defensively.
Do unto others, and watch what they do unto you

In some respects, driving defensively is about guessing. You want to communicate clearly with others on the road, so they won’t have to guess what you’re going to do. At the same time, you want to guess what others might do that could put you in harm’s way, and take steps to avoid the harm.

Here’s some tips every driver should keep in mind:

  • Maintain your car, particularly the tires, brakes, lights (including turn signal and hazard lights), and windshield wipers.
  • Clean all your windows (inside and outside) and mirrors, and keep them free of obstructions.
  • No matter what time of day it is, turn on your lights on gloomy days or while driving in poor weather conditions. Always use your lights during the twilight times–the half-hours after sunrise and before sunset.
  • Reduce your speed in bad weather and at night. In the dark or in fog, don’t drive beyond what your headlights will illuminate.
  • Use your turn signals, even if only changing lanes.
  • Watch for turning vehicles, and be cautious about trusting another driver’s turn signal that’s been on for a while; watch for the execution of the turn, rather than the intention.
  • Keep your distance from other vehicles (especially large trucks), particularly those in front of you, and stay out of their blind spots (close up behind them on either side). If you can’t see a truck’s side mirrors, the trucker can’t see you.
  • When pulling away from a stop sign or a traffic light, check the intersection for oncoming cross traffic.
  • Always wear your seat belt; it’ll keep you in place if you suddenly have to change direction.

The young and the restless

It’s an unfortunate fact, but drivers 16 to 24 years old have the most trouble focusing on the job at hand. Since they haven’t yet driven much, they’re inexperienced at scanning traffic. As a result, they fail to recognize danger while it’s still at a safe distance, and they’re sometimes slow to make a tough decision. What they’ve learned about good driving is too often offset by their overconfidence and willingness to take risks. Compared with other age groups, teenage drivers are more likely to drive too fast, follow too closely, and leave too little margin for error. As a result, they have the highest rate of accidents and fatalities per mile driven–and the highest auto insurance rates to show for it.

In addition to the tips listed above, if you’re a teen, here are some things you can do to improve your safety record on the road. They include:

  • Pulling away gradually: Jackrabbit starts out of intersections are for jackrabbits.
  • Looking twice before pulling out, especially to your right: You’d be surprised how often an oncoming car has been hiding behind your passenger-side windshield post.
  • Looking to your rear before backing out of a parking space in a lot: Maybe the people directly behind you are leaving, too; you don’t want to rear-end their car.
  • Looking both left and right when making a right turn: Granted, the traffic’s coming toward you from the left, but that lady on the curb to your right entered the crosswalk while you weren’t looking. . . .
  • Turning your head to physically check for a clear passage before you change lanes.
  • Keeping 2 seconds of distance between you and the car in front of you; 4 seconds if you’re going over 35 miles per hour: Mark when the car ahead of you passes a certain point, and do the “one thousand one, one thousand two” routine until you reach the same point; if you didn’t even reach two, back off!
  • Watching the road 12 seconds down the road: Give yourself plenty of time to see trouble developing.
  • Slowing down!

The not-so-safe senior?

Aging may not cause accidents, but older individuals do have some special concerns when it comes to maintaining safe driving habits. Medical problems (or the medications prescribed for them) can affect one’s ability to drive. Signs of unsafe driving practices among seniors can include:

  • Stopping when there’s a green light, or running a red light without realizing it
  • Drifting from one lane to another
  • Confusing the gas and brake pedals
  • Unwittingly hitting or coming close to people, cars, or other objects
  • Getting lost in familiar places
  • Going too slowly

When measuring the number of crashes per mile driven, the accident rate for seniors begins to rise at age 70 and goes up rapidly at age 80. These factors cause insurance premiums to rise for drivers entering their 60s, and to increase thereafter. Taking a driver improvement course may reduce these increases; many states require insurance discounts for drivers (usually those over 55) who complete a state-certified course.

Some steps you can take to maintain good habits and to drive defensively as you grow older include:

  • Seeing a doctor: Have a physical exam, including vision and memory testing. Review what medications you take, and their side effects.
  • Checking the visibility: Can you still see clearly all around you? Make sure your seat cushions provide firm support. To minimize potential whiplash, center your head restraint even with your ears, not on the base of your neck.
  • Planning your trips: You can then concentrate on your driving, not on figuring out how to get there. Let passengers help with the navigating.
  • Trying to avoid driving in bad weather, in heavy traffic, or on unfamiliar roads: If you can’t avoid driving at night, use the day/night positions on the rearview mirror to reduce headlight glare.
  • Learning where your dashboard controls are: When driving, find them by feel, and keep your eyes on the road.
  • Watching for the flashing lights from emergency vehicles: You may not always hear the sirens.

This material was prepared by Broadridge Investor Communication Solutions, Inc., and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com,  access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at www.theretirementgroup.com.