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Financial Fitness Blog

Auto payments make budgeting easy

(Money Management) Permanent link

Michelle Blog PhotoIf you don’t have a written budget, now might be the time. A budget allows you to take control of your financial future. It can help you find ways to cut expenses, carving out some extra money for debt payments, retirement savings, and beefing up your emergency fund. A budget even gives you permission to spend. Setting up a budget is easy with the help of mint.com or our interactive budget sheet. Sticking with your budget is made easier if you can set up automatic payments through payroll deduction or electronic transfer through your credit union or bank. Check with your school district to find out if they participate in Trust Advantage, which allows you to payroll deduct for 403(b) and IRA contributions, as well as auto and home insurance premiums. This built-in budgeting feature is a great time-saver and money management tool.

Michelle Slawny, CFP®

 

Myth: Health insurance, or Medicare, will cover long-term care costs

(Insurance) Permanent link

Kelly Blog PhotoEven the best health insurance (and Medicare) was not designed to cover unskilled (custodial) care that’s often needed during recovery from strokes, serious accidents, or chronic health conditions like diabetes, MS, and Alzheimer’s. After the first 30–90 days, neither health insurance nor Medicare will pay for custodial care, which means the costs must come from personal savings and assets. This information is usually found in the “Exclusions” section of health insurance policies. Without LTC insurance, you will have to pay for your LTC services out of pocket and chances are you’ll need to tap your retirement accounts to cover these costs.  The costs associated with long-term care can be financially devastating—upwards of $70,000 annually for a private nursing facility in Wisconsin.  (Source:  Annual Cost of Care Survey, Genworth Financial, April 29, 2008). This is why long-term care has been called the greatest financial risk.

Some employers offer LTC insurance coverage as part of their benefit package. Consider taking advantage of the benefit if available, even if you have to pay part or all of the premium. Group rates are often much more affordable and spouses may also be eligible.

Kelly Behnke, CIC, CISR, ACSR

Reduce insurance premiums without reducing coverage

(Insurance) Permanent link

Mark Blog PhotoAuto insurance rates can vary dramatically from company to company and even vehicle to vehicle. Some of the biggest factors insurance companies consider include your driving record, what kind of vehicle you drive, where you live and how far you commute to work, your age, and sometimes your credit score. Rates are also based on the amount of coverage you purchase. But skimping on coverage could put you in financial trouble if you are involved in a serious accident. A better, safer way to reduce your premiums is by selecting a higher deductible.

Mark Dannehl

Can my teenage son open an IRA?

(Retirement) Permanent link

Michelle Blog PhotoYes, as long as he has earned income from a job. Gifts of money or interest on a savings account do not count, nor does an allowance. Contribution limits for 2012 are $5,000 per year for those under age 50, but your son may only contribute up to the amount of his actual earnings. A Roth IRA is a particularly attractive savings option for young people who can count on years of tax-free earnings. Involve your son in the process of opening his IRA account and make sure to share with him what to look for when choosing a provider. For example, it's important that he understand what fees might be charged and how they impact his current and future account balance. The IRA program available through Member Benefits may be a good option with its low fees and easy online enrollment and account access. Family members of Wisconsin public school employees are eligible to participate in our IRA program.

Michelle Slawny, CFP®