Conservative Savings… Or Lifetime Retirement Income?

In uncertain times like these, sound financial decisions matter more than ever. When it comes to securing guaranteed retirement income, it’s important to base your decisions on a clear understanding of available products. Since many people turn to both deferred fixed annuities and certificates of deposit (CDs) for stable returns, it’s helpful to know the differences between the two.

First and foremost, a deferred fixed annuity is a conservative retirement vehicle, while a CD is designed to be a savings vehicle. Deferred fixed annuities can help you accumulate and protect assets until you are ready to receive them as guaranteed income during retirement – and many offer the option of guaranteeing retirement income for your lifetime; of course, guarantees and payment of lifetime income are based on the claims-paying ability of the issuing company.

CDs, by contrast, offer a conservative way to save and preserve assets when your investment horizon (the amount of time you expect assets to be invested) is relatively short. CDs do not offer a guaranteed lifetime income option. While both vehicles are considered conservative, they reduce risk in different ways. CDs are generally backed by banks and currently are insured for up to $250,000 for each depositor by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).

Fixed annuities are guaranteed – with no maximum – by the issuing insurance company. They are not FDIC insured. Be sure to ask your financial professional about an insurance company’s ratings and financial strength if you plan to purchase an annuity, because payment of lifetime income is contingent upon the claims-paying ability of the issuing company or companies.

There are other important differences as well, involving income tax treatment, early withdrawal options, and other important factors. The best way to make a good decision when planning for retirement is to work with a trained, trusted financial professional to choose products that best meet your retirement income objectives and investment needs.

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Try Letting the Children Run the House!

To become a parent is to become a nag:

  • “Turn off the lights when you leave the room!”
  • “It’s your turn to take out the trash!”
  • “Money doesn’t grow on trees!”


Instead of fighting with your children all the time, why not make them part of your team? If they’re careless around the house, perhaps it’s because they aren’t really invested in keeping it running smoothly and economically. You might be surprised at how much your kids understand, and how cooperative they can become, when you start treating them like adults.


It’s your job as an adult to keep track of all the money that comes into the household and to pay the bills. Hopefully there’s a budget and enough money to cover all expenses, with some left over to save and invest. But if you’re like most Americans, you struggle to make ends meet. Although everything you do is for your family’s sake, it often seems like you’re the “bad cop,” spoiling all their fun. To combat these negative attitudes, challenge your kids to help keep expenses in line. To do this, you’ll have to take the time to educate them about how a household is actually run.


The next time you sit down to pay bills, show them what you’re doing. Gather together the bills for household expenses like electricity, gas, oil, water and sewer, telephone, cable, and landscaping. Children old enough to read can be shown the bills themselves.


Explain to kids that utilities like water, gas, electricity and cable come into a building through pipes and wires. A meter placed near where the pipes or wires enter the house measures what is being used. Electricity, for example, is measured in kilowatt hours (kWh). One kWh of electricity supplies enough energy to light ten 100-watt lamps for one hour. If you know where your meters are located—on the outside wall of your home or in the basement perhaps—you can show them to your children. If a utility is in use at the time, the needles and dials on the meter will be moving.


Make a list together of all the things you can think of that use electricity in your home: refrigerator, microwave, washing machine, dishwasher, computers, air conditioners, lights, clocks, hair dryers, cell phone chargers, and so on. Make another list of ways you use water: sinks, tubs, toilets, refrigerators with icemakers, washing machines, garden hoses. Do the same for any other utilities and services you have.


Now look at the bills themselves. For each one, are you being charged a flat rate, a usage fee, or a combination of both? Ask your children to think of ways you could cut down on each bill.


Here are some government web sites designed for kids with ways to save water and energy:; Search the web for many more ideas.


Make it a family challenge to cut down the amount you spend each month on utilities and household services. Plan to reward your kids in some way for their efforts. You might pay them the difference saved, or place the amount in their savings accounts. Maybe you’d prefer to schedule a family outing or a special meal if a certain goal is reached. Remember that the cost of utilities varies with the seasons, so you might want to be comparing a monthly bill with the one from the same month one year previously.


If your children are old enough, they might be able to take over some of the services you have been paying an outsider to do. Do you pay for yard cleanup like mowing, weeding, and leaf raking? Housecleaning or car washing?


Once cutting down on household bills becomes a game to your children—with prizes awarded— you may see them becoming very frugal. You may even be able to retire from your job as chief nag in the family. Instead, your children may be nagging you!


Replicating the Utilities Savings in Your Family’s Finances

Thinking about the ways your family can become more utility cost-conscious may also help you to consider similar ways to streamline your family’s budget and curtail spending as it related to your  household’s finances.

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Should You Give Your Child an Allowance?

Childhood is full of milestones. First step, first word, first day of school, first job, first date. These milestones are important not only in themselves but in what they say about the family’s focus and values. Are we paying attention to each of these milestones, proudly recording each one of our child’s “firsts”? Are we sitting down with our children and discussing our expectations for each new stage of their lives? Are we making the commencement of each stage a teachable moment?


Some consider the age of seven to be the “age of reason”—the time when a child is capable of acting responsibly. At some point thereafter, a parent has to decide if you want your child to be responsible for handling money. Should you give your child an allowance?


An allowance can help your child learn money management skills. It’s an opportunity to learn budgeting and delayed gratification. Perhaps best of all for parents, an allowance can reduce nagging and whining: children don’t have to beg for toys and treats because they’re in control of their own spending. But all these wonderful results can only be achieved if time is taken at the outset to lay down some ground rules.

If you decide to give your child an allowance, sit down with him or her and go over a few simple points. Even better, write down the rules in the form of a contract and have your child sign it. If disagreements arise, just refer to the contract!

Here are some points to consider:

  • When should you start? Your child should be able to understand what money is for and have had a little experience with purchasing things. The beginning of the school year is a good time to start, or perhaps on the child’s birthday.
  • How much should be given? The amount depends on the child’s age, the family’s budget, what the allowance is supposed to cover, and what’s usual in the community. A potential rule of thumb is a dollar for each year of the child’s age.
  • What does the allowance cover? For young children who don’t have a lot of experience with money, an allowance should be mainly for discretionary spending: items like toys and treats. An eight-year-old can’t be expected to budget for a year’s worth of school clothes, for example. Be sure to discuss with your child whether he or she is expected to pay for lunches and snacks at school, movies, gifts, and so on.
  • Should kids be expected to save? Give to charity? Encourage your child to save at least 10 percent of the allowance in order to be able to afford larger purchases down the road. As an incentive, consider matching dollar for dollar whatever your child decides to save. Also discuss giving to charity. Explain which causes are important to you, and why. They may choose to follow your lead, or support a personal interest.
  • Should you pay for chores? Some families tie allowances to chores in order to show youngsters that money needs to be earned. Others feel that certain chores are a child’s responsibility as part of the family, and that kids should not expect to be compensated for them, any more than parents are compensated. You might consider giving your children an allowance with no strings attached, but occasionally giving them the opportunity to earn extra money by doing your chores for you, or helping with big jobs like spring cleaning or leaf raking. If you don’t like the idea of paying cash for these bigger jobs, consider some kind of reward at the end, such as a family outing.

Whatever rules you decide on for your child’s allowance, it’s important to be firm and consistent in enforcing them. Don’t cave in to every plea….allow your child to make small mistakes and suffer the consequences. Periodically review the allowance contract you’ve drawn up—once a year, perhaps—and make adjustments befitting your child’s age and increased responsibility. As your child approaches the teen years, consider a separate clothing allowance. Whatever you do, remember the thrill of having your own money when you were younger. Take the time to teach your child good spending habits, and you’ll instill that same pride and enjoyment.

Short and Long-Term Finances for Children – and Adults

As your children learn to make choices with the money available to them, consider thinking about the choices – both short and long-term – you are making in regards to your household’s finances.

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Summer Learning Loss: The Problem and Some Solutions

By June, most children in the US have closed the books for the school year. For some children, summer means camp, or family vacations. For teens, it could mean a job or internship. Perhaps it’s just lazy days playing with friends. But just because children are not stuck behind desks doesn’t mean they have to stop learning.

The fact is, learning doesn’t occur only in the classroom. Parents can provide their children with books and activities in and outside of the home. These books and activities reinforce lessons learned at school: music lessons, summer camp, clubs and sports aren’t merely fun for children. They provide opportunities to use the skills they have been taught in play or real-life situations.

After a summer of “hanging around,” these intellectually under stimulated children have lost reading skills, while others have stayed the same or even made gains. Kids who are behind tend to dislike school and perform poorly. Teachers are frustrated because each fall, they have to spend precious classroom hours in reviewing last year’s material before going ahead.

If children spend the summer merely “hanging around,” studies show that summer learning loss equals at least one month of instruction. Summer loss is more pronounced for math facts and spelling than for other tested skill areas. That might be because it’s harder to work math enrichment into summer schedules than reading enrichment.

It’s important, therefore, to consciously plan activities that seem like fun to kids while reinforcing number skills. What better way than some money games? Kids love to play games, and are fascinated by money: how to acquire it, how to hang onto it, and what to do with it once they’ve gotten it. Here are some ideas:

  • Coin Games. Children learn very early on that money has value. Once they are old enough to handle small objects, teach them how much each coin is worth and do activities using the coins. Let kids feed parking meters and pay for small purchases in the store themselves.Have everyone in the family empty their change into a large jar so they can see the money accumulating. After a time, have everyone guess how much is in the jar, and then count it. Award prizes, of course!
  • Play “Bank.” Put a pile of coins in the middle of the table. By turns, roll a die and take that number of pennies from the pile. As you accumulate enough pennies, you can trade them in for nickels, dimes, or quarters. The first player to get one quarter wins the round.
  • Make Coin Caterpillars. Gather a number of coins of all denominations. Lay a few out in a wavy row on a piece of paper. Draw legs and feelers on the paper to turn the row of coins into a cute caterpillar. Add up the value of the coins to see how much your caterpillar is worth. Or, assign each child an amount—say, 75 cents—and have them select coins adding up to that amount to form their caterpillar.
  • Board games. In Monopoly, players buy, trade and develop property, and collect rent from their opponents. (The recent “Electronic Banking” edition uses debit cards instead of bills.) In The Game of Life, players work their way from college through retirement, paying out expenses along the way. In The Allowance® Game, players do chores, collect an allowance, then get to spend it. There are many other such games. The advantage of traditional board games is that they’re multi-player, giving you an opportunity to play along with your children.
  • Video Games, Online Games, and Apps. If kids are going to play games on their computers, phones, or other electronic devices—and most do—they might as well be learning something in the process. Many of the traditional board games, like those mentioned above, have online versions. MassMutual has developed Save! The Game, an app for the iPad and iPhone that teaches kids the difference between wants and needs. Disney has developed The Great Piggybank Adventure, which explores such financial concepts as goal setting, wise spending, diversification and the the effects of inflation. For middle- and high-schoolers, Visa has developed Financial Football, which teaches teens about personal finance using the rules and structure of the National Football League. Most of these games are free.

Make the Most of Your Summer “Down Time”

While your children take time to continue their learning, consider focusing part of your summer “down time” on your household’s finances.

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Advantages Of The Term Life Insurance Plan In Your Life

Advantages Of The Term Life Insurance Plan In Your Life.

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If you don’t ever have life insurance, then you can be putting the future financial security of your family at risk. Life insurance is an instrument that shall close your financial obligations within the function of your death. Due to the fact that of this, you can still give for your family even whether you can be gone. It is really not difficult to obtain a policy. The bigger challenge is finding the right life insurance prices that shall fit in your budget.

So if this is first time that you can purchase life insurance here are some points that can help you obtain a favorable life insurance rate. First of all, you should decide what kind of life insurance is most favorable for you. For example, a term life insurance is regarded as the cheapest and highly affordable choice for most consumers. This kind of policy has a critical…

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Some advisers recommend it to clients, but others want the idea banned.

Parents worried about how they will afford the soaring cost of college for their children are being steered by some financial advisers in a surprising direction: life insurance. Life insurance that carries a cash balance that can be pulled out and used to pay for higher education offers tax advantages over the popular Section 529 college savings plans, according to some advisers. It is also a better way to pay for college because the assets aren’t counted in the calculations used to determine financial aid eligibility, they contend.

Jeremy Turner, an adviser and president of Safe College Funding LLC, said that he steers about 10% to 15% of his middle-income clients in the direction of life insurance to plan for college costs. “It’s not a one-size-fits-all ap-proach,” he said. “It takes some crafting to make sure it’s the…

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