Having enough cash to make it through an illness, injury, job loss, or other financial emergency can help you avoid taking on debt or tapping your retirement assets. However, given the relatively low interest rates offered on cash instruments, having more cash in your portfolio than would be necessary to cover three to six months of expenses could actually say something about your long-term outlook.

If you have been increasing your cash position, it’s a good idea to be honest with yourself about your motives. Ask yourself some critical questions.

What am I saving for? Building up a cash reserve to help defend against the unexpected is a smart move. But are you working to accumulate a particular sum, or is there no end in sight? You run the risk of not reaching long-term financial goals when your portfolio is too heavily allocated to cash.

Am I increasing my cash position because of fear? It’s usually not a good idea to keep the bulk of your wealth and/or retirement assets on the sidelines, in low-yielding cash instruments, just because you fear market volatility. Of course, as retirement approaches, it’s a good idea to begin shifting assets into more conservative positions. But this process should be based on a forward-looking strategy that takes into account your time horizon and risk tolerance, rather than on an emotional reaction to market fluctuations. As you can see in the chart above, trying to pick the right moment to flee and the right moment to reinvest is a costly practice that can cause you to miss out on market gains.

What’s my real rate of return? Despite the fact that inflation has been fairly low over the past few years, it is still growing at a faster rate than most cash instruments. For example, in 2009 the rate of inflation was 2.72% and the annual yield on six-month certificates of deposit was 0.81%.² What this means is that the combined principal and interest that was returned to the CD owner on the maturity date had less spending power than the principal that was invested six months earlier. When you also consider the effects of income taxes on the interest earned, it’s easy to see how expensive “safety” can be.

The FDIC insures bank savings accounts and CDs, which generally provide a fixed rate of return, up to $250,000 (per depositor, per institution). The return and principal value of an investment in stocks and bonds fluctuate with changes in market conditions. When sold, these securities may be worth more or less than the original investment amount.

There’s a big difference between being prepared for unexpected expenses and stockpiling cash because of fear. We can help you evaluate the role that cash plays in your portfolio.

1) Journal of Financial Planning, March 2010
2) Thomson Reuters, 2010, for the period 12/31/2008 to 12/31/2009. Inflation is represented by the U.S. Consumer Price Index. CDs are represented by the 180-Day Certificate of Deposit Index. The performance of an unmanaged index is not indicative of the performance of any particular investment. Individuals cannot invest directly in an index. Past performance is no guarantee of future results. Actual results will vary.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

Of course, you still have to fill out the right forms, but the process is nowhere near as complicated as writing a will. In fact, your retirement assets, life insurance, and some other account types should convey to whomever you named as a beneficiary, regardless of what it says in your will or whether you even have a will.

However, be advised that failing to designate your beneficiaries correctly can create problems for your heirs that will make probate seem like a Caribbean cruise.

Don’t Default to Default Beneficiaries

Generally, when you set up a retirement account or purchase a life insurance policy, you are given an opportunity to name primary and secondary beneficiaries. Although it would be unlikely for someone to buy life insurance without designating a beneficiary, it’s not uncommon for people to leave their retirement account beneficiary forms blank.

Most people assume that their IRAs and employer-sponsored retirement plans will go to their spouses. It’s true that these types of accounts have provisions for default beneficiaries, but who exactly qualifies as a default beneficiary can vary based on the account type and custodian — and there’s no guarantee that it will be your spouse.

It can be dangerous to assume that the default beneficiary is the person whom you want to inherit your assets. If it isn’t, the person who was expecting to inherit your retirement assets may have to mount a legal challenge to attempt to change the outcome. If the default beneficiary turns out to be your estate, your intended heirs could lose valuable tax benefits.

Although it’s still important to have a current will in place, a will won’t settle all estate conservation matters. It’s a good idea to review your beneficiary designations on a regular basis to help ensure there is no debate over who will inherit your retirement assets and receive your life insurance benefits.

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

In 2010, the present value of lifetime benefits from Medicare was about $376,000 for a 65-year-old married couple. Because Medicare covers about half of a beneficiary’s medical costs in retirement, on average, does this mean you’ll need $376,000 to pay for your share?¹

As large as this estimate might seem, there’s evidence to suggest that many people will need even more savings to cover medical expenses in retirement, especially people who don’t expect to retire for at least another decade.

How Certain Do You Want to Be?

The Employee Benefit Research Institute estimates that a man will need between $144,000 and $290,000 and a woman will need between $210,000 and $406,000 in savings to have a 50% chance of affording health care in retirement, assuming retirement at age 65 in 2019.²

These estimates are for the projected median savings needed to pay premiums for Medigap, Medicare Part B and Part D, and out-of-pocket prescription drug expenses. Since half of the population would be above the median, half could need more than these amounts. Some people may need to save even more if they live longer than the average life expectancy, have above-average prescription drug costs, or want greater certainty that they will be able to pay for health care.

The estimates tend to be higher for women because they have longer life expectancies. In fact, a woman who wants to be 90% certain that she will be able to afford her health-care expenses in retirement would need an estimated $370,000 in savings (again, assuming retirement in 2019 at age 65). If her prescription drug costs are above the median, she could need even more.³

You might be wondering whether the health reform legislation that became law in March 2010 will reduce the amount that tomorrow’s retirees will need to pay for health care. Because the law relies on $415 billion in cuts to Medicare, it’s entirely possible that the percentage of medical expenses covered by Medicare benefits could fall in the future.⁴

Of course, your situation is likely to be different. What do these estimates mean if you know that you are almost certain to retire at a different age and/or in a different year? In that case, these numbers might make a good starting point for calculating how much money you may need to accumulate.

1–3) Employee Benefit Research Institute, 2010
4) Tax Foundation, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2010 Emerald.

Please feel free to call my office with any questions you might have.

Below are some of the key provisions that will take effect immediately, under the legislative package the House passed this weekend (the Senate health bill as amended by the reconciliation bill). The reconciliation bill is based largely on the improvements put forward by the President’s proposal – moving towards the House bill in certain critical areas.

1.
SMALL BUSINESS TAX CREDITS—Offers tax credits to small businesses to make employee coverage more affordable. Tax credits of up to 35 percent of premiums will be immediately available to firms that choose to offer coverage. Effective beginning for calendar year 2010. (Beginning in 2014, the small business tax credits will cover 50 percent of premiums.)

2.
BEGINS TO CLOSE THE MEDICARE PART D DONUT HOLE—Provides a $250 rebate to Medicare beneficiaries who hit the donut hole in 2010. Effective for calendar year 2010. (Beginning in 2011, institutes a 50% discount on brand?name drugs in the donut hole; also completely closes the donut hole by 2020.)

3.
FREE PREVENTIVE CARE UNDER MEDICARE—Eliminates co?payments for preventive services and exempts preventive services from deductibles under the Medicare program. Effective beginning January 1, 2011.

4.
HELP FOR EARLY RETIREES—Creates a temporary re?insurance program (until the Exchanges are available) to help offset the costs of expensive health claims for employers that provide health benefits for retirees age 55?64. Effective 90 days after enactment

5.
ENDS RESCISSIONS—Bans health plans from dropping people from coverage when they get sick. Effective 6 months after enactment.

6.
NO DISCRIMINATON AGAINST CHILDREN WITH PRE?EXISTING CONDITIONS—Prohibits health plans from denying coverage to children with pre?existing conditions. Effective 6 months after enactment. (Beginning in 2014, this prohibition would apply to all persons.)

7.
BANS LIFETIME LIMITS ON COVERAGE—Prohibits health plans from placing lifetime caps on coverage. Effective 6 months after enactment.

8.
BANS RESTRICTIVE ANNUAL LIMITS ON COVERAGE—Tightly restricts new plans’ use of annual limits to ensure access to needed care. These tight restrictions will be defined by HHS. Effective 6 months after enactment. (Beginning in 2014, the use of any annual limits would be prohibited for all plans.)

9.
FREE PREVENTIVE CARE UNDER NEW PRIVATE PLANS—Requires new private plans to cover preventive services with no co?payments and with preventive services being exempt from deductibles. Effective 6 months after enactment.

10.
NEW, INDEPENDENT APPEALS PROCESS—Ensures consumers in new plans have access to an effective internal and external appeals process to appeal decisions by their health insurance plan. Effective 6 months after enactment.

11.
ENSURING VALUE FOR PREMIUM PAYMENTS—Requires plans in the individual and small group market to spend 80 percent of premium dollars on medical services, and plans in the large group market to spend 85 percent. Insurers that do not meet these thresholds must provide rebates to policyholders. Effective on January 1, 2011.

12.
IMMEDIATE HELP FOR THE UNINSURED UNTIL EXCHANGE IS AVAILABLE (INTERIM HIGH?RISK POOL)—Provides immediate access to insurance for Americans who are uninsured because of a pre?existing condition ? through a temporary high?risk pool. Effective 90 days after enactment.

13.
EXTENDS COVERAGE FOR YOUNG PEOPLE UP TO 26TH BIRTHDAY THROUGH PARENTS’ INSURANCE – Requires health plans to allow young people up to their 26th birthday to remain on their parents’ insurance policy, at the parents’ choice. Effective 6 months after enactment.

14.
COMMUNITY HEALTH CENTERS—Increases funding for Community Health Centers to allow for nearly a doubling of the number of patients seen by the centers over the next 5 years. Effective beginning in fiscal year 2010.

15.
INCREASING NUMBER OF PRIMARY CARE DOCTORS—Provides new investment in training programs to increase the number of primary care doctors, nurses, and public health professionals. Effective beginning in fiscal year 2010.

16.
PROHIBITING DISCRIMINATION BASED ON SALARY—Prohibits new group health plans from establishing any eligibility rules for health care coverage that have the effect of discriminating in favor of higher wage employees. Effective 6 months after enactment.

17.
HEALTH INSURANCE CONSUMER INFORMATION—Provides aid to states in establishing offices of health insurance consumer assistance in order to help individuals with the filing of complaints and appeals. Effective beginning in FY 2010.

18.
CREATES NEW, VOLUNTARY, PUBLIC LONG?TERM CARE INSURANCE PROGRAM—Creates a long?term care insurance program to be financed by voluntary payroll deductions to provide benefits to adults who become functionally disabled. Effective on January 1, 2011.

OFFICE OF SPEAKER NANCY PELOSI
MARCH 22, 2010

The appropriate way to appraise a person’s entire life after he or she is gone is a topic that has been debated by philosophers throughout the ages. Certainly, there are as many factors as there are ways to approach them. One measure of a life is the effect that the person’s death has on those close to him or her. For those with dependents, this effect can be substantial.

One way to help mitigate the financial blow of the loss of a head of household is through life insurance. Yet in a recent survey, even though most people agreed that everyone should have some form of life insurance, only 20% felt that it should go beyond just covering bills and funeral costs and should replace the income of the deceased in order to support dependent family members.¹

However, if you have dependents, the loss of your income could put your family in the difficult position of trying to maintain its standard of living on a much smaller budget. Life insurance can be a tool to help replace the lost income. But how much insurance is enough?

No Rule of Thumb

Some people recommend that life insurance be high enough to replace an equivalent of seven or eight times the annual salary of the insured. Yet this old rule of thumb may not be the best guidepost for someone with no children.

To determine how much life insurance coverage may be appropriate for your family, consider your dependents and their ages. How long would they be expected to need support? Would there be enough funds for college? Would you want the mortgage to be paid off?

Don’t forget about other benefits that might be lost along with your salary. For example, if your health insurance is provided by your employer, your family may need replacement coverage.

Remember that the cost and availability of life insurance depend on factors such as age, health, and the type and amount of insurance purchased. Before implementing a strategy involving life insurance, it would be prudent to make sure that you are insurable and to consult a tax professional.

As with most financial decisions, there are expenses associated with the purchase of life insurance. Policies commonly have mortality and expense charges. In addition, if a policy is surrendered prematurely, there may be surrender charges and income tax implications.

1) U.S. News & World Report, March 31, 2009

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2009 Emerald.

I wanted to have a professional video made but he insisted that it is better to just roll with this unrehearsed version! Reluctantly I agreed and trusted him to not make a fool out of me!

Please watch the 5 minute short video and also download the entire Proposed Health Care Reform plan via the link I have provided for you below.  Please let me know what you think and share your thoughts with everyone else on this subject in the comment area below.

To see the complete proposed plan, please click here and download the 1,100 page document.

Hearsay and bad information often fuel people’s misunderstandings of health insurance. When was the last time someone snuggled up with a cup of coffee and her insurance policy?

According to the Life and Health Insurance Foundation for Education and the Henry J. Kaiser Family Foundation, the following myths are alive and well in the minds of most folks.

1. It’s cheapest to buy health insurance through an employer’s group plan.

If your employer offers a group health plan, you’re likely experiencing annual increases in premiums, reductions in what’s paid for by your employer, increases in your out-of-pocket expenses and the possibility that you’re paying for lots of benefits you don’t want or need.

An individual health plan (the kind you buy on your own), especially for someone who’s healthy and young, can offer significant savings. Unlike individual plans, group health plans must abide by state health insurance mandates, which can require coverage for everything from autism to hearing aids and from contraceptives to in vitro fertilization.

Although an individual health plan can deny your application based on your health status, Matt Tassey, a spokesman for LIFE, notes that if you’re eligible the plan can be customized to meet your specific health care needs.

“If you’re a man, you have no need to see an obstetrician. But if they have an employer-sponsored health plan, they are still paying for (the obstetrics coverage),” he says.

2. Health insurance is expensive because health insurance companies are driven by profit.

Brenda Weigel, a spokeswoman for the National Association of Health Underwriters, says this is a common misconception. “The fact that health insurance is expensive is because health care is expensive. Or there’s the common misconception that Medicare administrative costs are lower than private plans, when in fact there is quite a bit of cost-shifting,” says Weigel.

When patients use a government insurance program (such as Medicare), providers of health care shift more costs to people who have insurance. The result is higher premiums for people who purchase their insurance on the individual market and workers who receive insurance through their employers.

Tassey notes that rising prescription drug costs also fuel increases.

3. If you’re young and healthy you don’t need to pay for health insurance.

Then what happens when you break your leg in a snowboarding accident or blow out your knee while playing soccer? If you find that your tonsils need to be removed, the cost of a tonsillectomy can start at $5,000, with an additional $1,500 per day for an overnight hospital stay.

“There is this idea that if they need to be hospitalized they can just go to the emergency room because they have to take you,” says Tassey. “We like to call them ‘young immortals.’ A problem arises when they have to be stabilized or, worse, have to stay in the hospital for an extended period of time. What happens if they have to be transferred somewhere else for care or have to see a specialist? The cost could reach $100,000 once you add everything up, and starting out their lives in serious medical debt can have a long-term repercussions on their financial future.”

Tassey says young people rarely think about health insurance until it’s time to have a baby.

4. The highest numbers of uninsured people are under age 25.

The fastest-growing group of uninsured Americans is age 50 to 64. The difference between the younger and older people is accessibility to health insurance. While younger people who are not covered by an employer’s health plan may find it easy to acquire affordable individual coverage on their own because of age and health status, older people do not have the same advantage.

According to recent estimates from the Kaiser Commission on Medicaid and the Uninsured, middle-aged and older adults under age 65 (and not yet eligible for Medicare) are fast becoming the largest group of Americans without health insurance.

In fact, 19 million Americans from age 50 to 64 were uninsured or underinsured in 2008. Members of this group are more likely to arrive at a doctor’s office with a number of chronic medical conditions, making it difficult or impossible for them to buy individual health insurance. As baby boomers reach age 65, the sheer number of people in need of coverage has the potential of overwhelming the Medicare system.

“This is a serious problem as the baby boomers age and the cost of health care skyrockets. If you drive an old car, you have to do repairs to keep that car moving. Just imagine having 75 million old cars coming into the Medicare system — that is exactly what we are looking at in the next several years,” says Tassey.

5. COBRA is very expensive, and a short-term health plan would be cheaper.

The federal COBRA law allows you to continue buying your former employer’s group health plan if you are laid off. The catch is that the employer no longer has to contribute to the premiums. One alternative is buying a short-term health plan on your own.

If you are relatively healthy, a short-term plan could bridge the gap between other insurance plans, but if you have a pre-existing condition, or need maternity care or prescription drug coverage, you may not be able to find a short-term plan.

Also, short-term plans generally require you pay high deductibles before coverage begins. This deductible can vary from $250 (for very healthy policyholders) to well into the thousands. When you consider the cost of meeting the deductible before the plan pays for medical care, COBRA may be the better choice, especially if you have a pre-existing condition. In addition, a typical short-term policy lasts a maximum of six months, and the insurer is not obligated to renew your policy.

Under the American Recovery and Reinvestment Act that went into effect in February, you can receive a 65% subsidy of your COBRA premiums for up to nine months. In return, the federal government reimburses the employer with a payroll tax credit.

6. Large employers always offer health insurance to workers.

The Kaiser Family Foundation points out that one in five workers in firms with 500 or more employees is uninsured because many companies do not offer health insurance.

When workers are offered health insurance, they take it. According to the Employee Benefits Research Institute, less than 5% of those workers who are eligible for health benefits is uninsured.

7. Canada has a better health care system than the U.S.

The debate rages on. Canada’s universal care system is fine, but there’s a limit on what you can get. For example, if you happen to be a Canadian age 70 or older and need bypass surgery, the government won’t pay for it.

“Universal health care isn’t better; it’s just different,” Tassey says. “One of the largest hospitals in the U.S. is the Henry Ford Hospital in Detroit. Many Canadians come over to Detroit for care — not because it’s better; it’s because they can get it (in the U.S.). There is no rationing (in America) of any sort, so they can just write a check.”

Americans may complain about the high cost of health care in the U.S., but Tassey points out that people are rarely denied care for any reason.

“People in the U.S. demand care and demand it immediately. They also think we can cure anything,” notes Tassey. “Unfortunately, it costs a lot of money to treat the number of fatal diseases that need a cure. We already have a semi-Canadian system for those who are 65 and older — it’s called Medicare, and it’s going bankrupt.”

This article was reported by Michelle Matlock for Insure.com

Unfortunately, many insured patients find out there’s a gap in the system and that they’re still on the hook for thousands of dollars.

You can watch Phil Shuman’s report in the video below.

The Hospital Association of Southern California advises that you shouldn’t wait for an emergency.

• Check your health plan’s web site or handout book for the names of every doctor in the network… and what percentage of costs will be covered. 
•  Before an emergency happens, designate someone close to you as your advocate in an ER situation. 
• Also, Cosumer Watchdog’s Judy Dugan advises that you should keep meticulous records.
• Lastly, don’t be afraid to argue the doctor’s bill. If you put up a fight, many doctors will reduce charge.
   

If you have concerns regarding “Balance Billing” and/or charges for an “out of network” doctor, check out consumerwatchdog.org .

Source:  http://www.myfoxla.com/dpp/health/Medical_Billing_Controversy

Even as the economy stumbles, the price of a college education keeps on climbing. Average tuition and fees at public four-year colleges and universities rose 6.4% in the 2008–09 academic year, while costs at private four-year institutions rose 5.9%.¹

Higher college costs and trying economic conditions have interrupted the education plans of many aspiring students. In a recent survey, 57% of high-school seniors lamented that they were considering less prestigious and less expensive college options, and 16% were putting their searches on hold because they didn’t think their families could afford to foot the bill.²

It’s likely that admission to the nation’s top colleges and universities will remain competitive, but adequate college savings can help ensure that a student’s opportunity to attend his or her school of choice is not compromised by the lack of resources. Fortunately, Section 529 plans are designed to help families save for future higher-education costs.

Study This Strategy

With a 529 savings plan, investment earnings accumulate on a tax-deferred basis. Contributions and earnings can be withdrawn tax-free if they are spent on qualified higher-education expenses such as tuition, fees, room and board, books, and other school supplies.

Family members can contribute up to $13,000 ($26,000 for married couples) to a 529 plan each year per student without triggering gift taxes, and there are no donor income limits. Contributions up to $65,000 ($130,000 for married couples) are also allowed in a single year as long as no other gifts are given to the student by the same contributor(s) for five years.

As with other investments, there are generally fees and expenses associated with participation in a 529 savings plan. There is also a risk that the plan investments may lose money or not perform well enough to cover college costs as anticipated.

The tax implications of a 529 plan should be discussed with your legal and tax advisors because the plans can vary significantly from state to state. Also note that most states offer their own 529 plans, which may provide advantages and benefits exclusively for their residents and taxpayers.

Before investing in a 529 savings plan, please consider the investment objectives, risks, charges, and expenses carefully. The official disclosure statements and applicable prospectuses, which contain this and other information about the investment options and underlying investments, can be obtained by contacting your financial professional. You should read this material carefully before investing.

The average debt for college graduates who borrowed money for college has reached $22,700, with many owing much more.³ For parents who worry about the financial future of their children, it can be worth the investment to support worthy students in their pursuit of a higher education.

1, 3) The College Board, 2008
2) The Wall Street Journal, October 30, 2008

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by StoneRiver–Emerald. © 2009 StoneRiver, Inc.