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How Abnormal EKGs Impact Life Insurance Underwriting - Part II

12/31/2018

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In our last blogpost, we discussed what is EKG and what are abnormal EKGs.  Now we will discuss how abnormal EKGs will affect your life insurance application.

The primary questions you should expect to be asked are:
  • When was the most recent EKG testing done?
  • Was it considered to be normal, borderline or abnormal?
  • Has the Dr determined the cause of the abnormal findings?
  • Has there been any further cardiac work up or evaluation—like an echo?...results?
  • Is there any other cardiac history, such as chest pains, heart attack, stents or bypass?
  • Any history of high blood pressure or cholesterol?
  • Is there any family history of heart disease?

The EKG is a simple and inexpensive test which is used in combination with other cardiovascular risk factors in the underwriting evaluation for significant coronary disease. Underwriting for an abnormal EKG can run anywhere from a Standard offer, to mild table ratings, and occasionally you’ll see underwriting request further evaluation if they see this is a new and undiagnosed concern with the insured’s doctor. A request for cardiac work up to include echocardiogram testing is not uncommon.

Please contact us if you need help.
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How Abnormal EKGs Impact Life Insurance Underwriting - Part I

12/30/2018

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Q. I have abnormal EKGs, how my life insurance application will be impacted?

A.
First, let's talk EKGs:

What Is EKG?

The electrocardiogram (ECG or EKG) is a medical test that basically evaluates the electrical conduction system of the heart. It can help medical professionals discover a problem with the heart’s electrical impulses. It's typically the initial test that will indicate there’s an issue with coronary artery disease.  An EKG can also help disclose the presence of arrhythmias, heart blockage, prior myocardial infractions (heart attacks), cardiomyopathy, left ventricular hypertrophy (LVH), and other issues.

The major components of the heart’s electrical cycle are the P-wave, QRS complex, and the T-wave. The P-wave represents the contraction of the atria (the top chambers of the heart) which pump blood to the ventricles (the bottom chambers of the heart). The QRS complex represents the contraction of the ventricles (the bottom chambers of the heart) which pump blood throughout the body. The T-wave shows repolarization, or the resetting of the ventricles to prepare them for the next heart beat.

What Are Common Abnormal EKGs?

T-wave changes are one of the most common abnormalities noted on an EKG. Changes in the T-wave may be a normal variant in some healthy individuals. It can also be related to age, body size/position, medications, or health issues like anemia, pericarditis and many others. T-wave abnormalities may also be caused by virtually any type of cardiovascular disorder such as coronary artery disease, valve impairments and hypertensive cardiovascular disease.
​

T-wave abnormalities are classified by their degree of abnormality. They are either considered to be minor or major changes, and ratings will depend on this classification, as well as the presence (or absence) of other risk factors. An EKG abnormality can be a red flag for a potential problem and the need for further investigation. When a case is rated or postponed for T-wave changes, favorable cardiac evaluation can often result in reconsideration.

In next blogpost, we will discuss how abnormal EKGs will impact your life insurance application.



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Top Sector Investment Ideas For 2019

12/29/2018

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If you are looking for investment ideas in 2019, Fidelity has put together their sector outlook in one place, among the top ideas from Fidelity's sector portfolio managers:
  • gene therapy biotech
  • water management technology
  • industrial REITs
  • artificial intelligence
  • utilities
  • content distributors
  • video game makers
  • and beverage companies

Check them out here.
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This Chart Will Change Your Perspective On Stock Investment

12/28/2018

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Are you scared about the stock market's recent downfall?

Look at the chart below, we have showed it twice - first in 2016 and next around beginning of 2018, it's very fitting to pull it up at the end of 2018 again.

If you have the opportunity to select your timing about investing in stock market, where on this chart do you want to start from?
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Can Yield Curve Shape Predict Economy and Stock Prices Trends?

12/27/2018

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Q. Could yield curve predict economy and stock market's performances?

A.
Earlier this month the markets experienced a significant uptick in volatility, coinciding with an “inversion” of the yield curve, where longer-term yields on government bonds dipped below the shorter term yield.

Why Inverted Yield Curve Matters?
An inverted yield curve is significant because most of the time, interest rates are a combination of expected inflation rates and expected real interest rates, on top of which there is a 
maturity premium (i.e., higher yield) on longer-term bonds to compensate for their longer duration and higher risk. As a result, the yield curve typically only inverts if investors are anticipating significantly lower rates in the future and thus are trying to lock in higher current rates (at a cost of giving up their maturity premium).

Why would interest rates go lower in the future?
Either because the Fed keeps increasing rates (causing short-term rates to go higher), or expected long-term rates go lower because of an anticipation that the inflation rate will decrease, and/or the real interest rate will decrease… both of which tend to occur in a recession (and in response to which the Fed begins to cut interest rates, fulfilling the expected-lower-future-rates prophecy). In fact, an inverted yield curve has preceded (and thus effectively “predicted”) all 8 recessions that have occurred in the past 60 years, sending only one false signal (an inverted yield curve that didn’t actually turn out to be a recession) in the mid-1960s.

How to evaluate the slope of yield curve?
However, as Damodaran notes, there are many different ways to evaluate the slope of the yield curve (e.g., 3-month vs 1-year Treasuries, or 2-year vs 5-year Treasuries, or 2-year vs 10-year Treasuries), and not all of the yield curve comparisons are currently negative… and in cases where the yield curve is even “just” flat or remains very slightly positive, often economic growth resumes and a recession never actually occurs. Nor is there necessarily always a connection between inverted yield curves and future stock returns, either (as markets sometimes already have anticipated the recession before the yield curve inverts anyway, and by the time the inversion comes the bottom is already near). Nonetheless, the fact that at least some parts of the yield curve have started to invert does raise some potential warning signs about the economic outlook heading into 2019.

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Retirees: Do You Know How to Pay 0% On Capital Gains?

12/26/2018

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Most people believe that the tax rate on capital gains is 15%. However, qualified dividends and long-term capital gains actually follow a bracket structure with three separate rates that are dependent on your total taxable income. This can create some really interesting opportunities for people in the know.
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​The tiered structure of the capital gains brackets creates unique opportunities to take advantage of the zero percent rate.

​For instance, for a married couple in 2018, the standard deduction is $24,000 plus an additional $2,600 if both are over 65 years old or blind. That means a married couple filing jointly, both over 65, could actually have $103,800 of capital gains and pay no federal income tax at all!
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Notable Changes in 2018 If You Itemize Deductions

12/25/2018

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​Most taxpayers in 2018 will likely take advantage of the higher standard deduction, which is now $12,000 for single filers, $18,000 for head of household filers and $24,000 for joint filers.

If you continue to itemize deductions, there have been some notable changes:


  • Pease limitation has been repealed, which means higher income people will not have the value of their itemized deductions reduced or phased out.
  • Mortgage interest will be deductible up to $750,000 of debt. However, the interest on existing mortgages originating on or before December 15, 2017, will be deductible on debt up to $1 million. The effect of lowering the mortgage limit will likely be regional. Most mortgages are far less than $750,000. In addition, the deduction for interest paid on home equity loans, both new loans and existing, has been eliminated.
  • Charitable contributions will continue to be deductible. Donations of cash to public charities is deductible up to 60% of adjusted gross income, up from a limit of 50% last year – an important shift to note for wealthy clients who are charitably-minded.
  • Medical expenses will be deductible to the extent they exceed 7.5% of adjusted gross income, down from 10% previously. This change to a lower threshold is in effect for 2017 and 2018 only, therefore it may make sense to pay as much of these expenses as possible now, in order to take advantage of the change before the threshold reverts to 10% beginning with the 2019 tax year.
  • State and local income taxes (SALT), as well as sales and property taxes, are still deductible, but now capped at a total of $10,000 combined. This means a widely used year-end planning strategy of prepaying income and property before December 31 will benefit fewer people.
 
​
With the standard deduction now so much higher, many taxpayers will not receive a tax benefit from charitable contributions, property taxes, mortgage payments and medical expenses. However, some people may benefit from “bunching” these deductions, essentially doubling up on certain costs one year while taking the standard deduction another year.  Also, donor-advised funds will likely become more popular, where the taxpayer gets a deduction by itemizing in the year a contribution is made to the fund and then directs distributions from the fund to charities in subsequent years.
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Why Your Portfolio Should Include Exposure to International Stocks

12/24/2018

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Q. Why I should include international stocks as part of my portfolio and which ones should I include?

A.
The following picture is better than 1000 words!

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Clearly, the above picture shows there is a cycle in terms of outperformance between U.S. and International stocks.

Which international assets you should include in your portfolio?  The following performance chart will give you a hint.

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What Is a Margin Call and How to Satisfy It?

12/23/2018

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Q. What is a margin call and what should I do if I receive one?

A.
A margin call is a demand from your brokerage firm to increase the amount of equity in your account, after the equity you bought on margin decreases in value.

Watch this short video from Fidelity to understand the mechanics of margin call.

From the video above, the investor faces $2,000 margin call.  She has 3 ways to meet her margin call:
  1. Deposit cash: simply deposit $2,000 into her account.
  2. Deposit marginable securities: deposit fully paid-for shares of stock as additional collateral for her margin loan. To determine how many shares would be necessary to meet a $2,000 margin call, she could divide $2,000 by the loan value of the stock she plans to deposit. The loan value is equal to 100% minus the maintenance requirement for that stock. Assuming the maintenance requirement is 30%, divide $2,000 by 0.70 to arrive at the figure of $2,857. That's the amount of marginable stock she must deposit to cover a $2,000 margin call.
  3. Sell shares of stock: Similar to the calculation for depositing securities, multiply the value of the stock sold by the maintenance requirement for the shares that remain in the account. Assuming a 30% maintenance requirement, the investor sells $6,670 worth of ABC Pharmaceuticals Company stock to satisfy her $2,000 margin call.
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Tax-Loss Harvesting Using ETFs

12/22/2018

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Q. Is it possible to use ETFs to do tax-loss harvesting?

A.
Yes, it is not only desirable, but also recommended, for the following 3 reasons:

1) Tax-loss harvesting means you sell a stock that has lost value, that could generate losses to offset your gains.

2) By replacing the losing stock with an ETF, you reduce overall risk exposure of your portfolio.

3) You avoid the Wash Sale Rule, which states that your tax loss will be disallowed if you buy the same security, a contract or option to buy the security, or a substantially identical security, within 30 days the date you sold the loss-generating investment.

Sell one ETF and Replace with another ETF
​

You can also implement a tax-loss harvesting strategy by selling one ETF that has a loss and replacing it with a similar but not not substantially identical ETF or Mutual Fund.

For example, if you have a loss in an S&P 500 ETF, you could harvest the loss and replace that position with an ETF that tracks a different index - such as Russell 1000.  If you have a loss in a segment ETF, you can harvest the loss and purchase another segment focused ETF.
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AIG's Road to Retirement Video

12/21/2018

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A Case Study About Using Annuity To Increase Income Success Rate

12/20/2018

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income_success_rate_with_annuity.pdf
File Size: 345 kb
File Type: pdf
Download File

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Is There Term Life Insurance With Coverage Length As 40 Years?

12/19/2018

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Q. Is there term life insurance with coverage to 40 years?

A.
Yes, 
Legal & General America is revolutionizing the term insurance marketplace as the only carrier to offer level premium coverage for up to 40 years!


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Life Insurance Needs For Different Life Stages

12/18/2018

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Depending on your stage in life and individual circumstances, your life insurance needs and considerations vary greatly.  By taking a look at your current stage— and future stages—you can see how your needs may change over time.
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Please contact us if you have life insurance needs, or if your needs have changed.
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End of Year Tax Favored Accounts Related Moves

12/17/2018

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Q. Any year-end smart tax moves related to tax-favored accounts?

A.
Below is a list of actions one could take before end-of-year for tax-favored accounts:
  • Maximize retirement plan contribution limits
  • Distribute RMDs correctly
  • Roll to an IRA to make a qualified charitable distribution next year
  • Make any year-end Roth conversions
  • Spend funds from Flexible Spending Accounts
  • Split any inherited retirement accounts
  •  Roll to an IRA to purchase a qualifying longevity annuity next year
  • Make any 529 ABLE account contributions

For a more detailed discussion for each of the above actions, visit here.

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Which Stage Of Business Cycle We Are In Right Now?

12/16/2018

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According to the business cycle theory of investing, different sectors tend to perform better depending on the stage of the economic cycle.

​Fidelity believes we are currently in the mid to late stage of the business cycle—which has tended to be positive for the energy, industrials, materials, and communications (formerly telecom) sectors. Of course, each cycle is unique, and individual investment performance can vary.
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How to Calculate RMD Amount?

12/15/2018

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Q. How do I calculate my required minimum distribution amount?

A.
To calculate your RMD amount, you can use the attached IRS Uniform Lifetime Table below:
uniformlifetimetable.pdf
File Size: 59 kb
File Type: pdf
Download File

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4 Additional Ways to Use HSA Money

12/14/2018

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Q. What are the ways to use my HSA savings?

A.
You can always use your HSA to pay for qualified medical expenses like vision and dental care, hearing aids, and nursing services at any time.  Once you retire, there are additional ways you can use the money:

1. Help bridge to Medicare 
If you retired prior to age 65, you may still need health care coverage to help you bridge the gap to Medicare eligibility at 65. Generally, HSAs cannot be used to pay private health insurance premiums, but there are 2 exceptions: paying for health care coverage purchased through an employer-sponsored plan under COBRA, and paying premiums while receiving unemployment compensation. This is true at any age, but may be helpful if you lose your job or decide to stop working before turning 65.

2. Cover Medicare premiums 
You can use your HSA to pay certain Medicare expenses, including premiums for Part B and Part D prescription-drug coverage, but not supplemental (Medigap) policy premiums. For retirees over age 65 who have employer-sponsored health coverage, an HSA can be used to pay your share of those costs as well.

3. Long-term care expenses 
Your HSA can be used to cover part of the cost for a "tax-qualified" long-term care insurance policy. You can do this at any age, but the amount you can use increases as you get older.

​4. Pay for other expenses 
Once you hit 65, you can use your HSA to pay for any non-qualified medical expenses (including buying a boat, for example), but you don't get to take full advantage of the tax savings as you will be required to pay state and federal taxes on those distributions.


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How to Avoid Probate When You Die

12/13/2018

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Q. What is probate and how can I avoid it?

A.
Probate is the court-supervised process of passing your assets through a will (or through state law if there is no will) after you die.

What assets do not go through probate when you die?
Money in a trust generally does not have to go through probate.  Life insurance death benefits and money in IRAs, 401(k) and other retirement plans with beneficiary designations pass directly to the beneficiary without having to go through probate (and the beneficiary designations supersede your will).

Bank accounts and brokerage accounts held as joint tenants with rights of survivorship pass directly to the joint owner after you die.

Many states permit people to own bank accounts and other financial accounts with a transfer-on-death designation.  The accounts can pass on assets outside of probate when you die, and you don't have to give up control over your accounts while you are alive.

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Freebies to Fight Fraud - Part II

12/12/2018

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To continue freebies to fight fraud from last time -

Password Managers
  • A password manager stores all your hard-to-remember codes in one place, simplifying your life.
  • Freebies include LastPass, Dashlane, KeePass, and RoboForm.  They will generate and remember, in an encrypted vault, all your complex and site-specific passwords.
  • All you need is one master password to log in to the manager, and it fills your log-in credentials at each website with less-hankable passwords.

Call Blocking Apps
  • There are apps that will identify and block calls from robocallers, telemarketers, and suspected scammers.
  • Freebies include Truecaller, Hiya, and Call Control.
  • AT&T and T-mobile customers can get free "basic" protection.

Tax Transcripts
  • To prevent possible tax-refund fraud, you can request IRS transcripts each year after you getting a refund or the IRS cashes your check for underpaid taxes.
  • To view and print your transcripts online, go to IRS.gov and use the Get Transcript tool. 
  • You can get past 3 returns.  Or ask for them by calling 800-908-9946.
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Freebies to Fight Fraud - Part I

12/11/2018

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Credit and Identity Monitoring
  • Use AnnualCreditReport.com to review your Equifax, Experian, and TransUnion files each year free.  Best to check a different credit bureau every 4 months.
  • Use CreditSesame.com and CreditKarma.com to track credit bureau data.
  • Use a bank or credit card provider's free alert of suspicious activity.

Credit Freezes
  • A credit freeze restricts access to your credit report unless you expressly allow it to be shared.  Without it, identify thieves can't open new accounts in your name.
  • Contact each of the 3 major credit bureaus (Equifax 800-349-9960, Experian 888-397-3742, and TransUnion 888-909-8872) to enact, lift or temporarily "thaw" freezes when applying for credit, seeking a new job, or switching utility providers.

More freebies to fight fraud here.
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Social Security Benefits Frequently Asked Questions - Part C

12/10/2018

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Q5. Can I collect a survivor benefit from my deceased husband at age 62 and switch to my own retirement benefits later?

A.
Yes, you can.  When you are eligible for both your own retirement benefits and a survivor benefit, you have the option of collecting one benefit early and waiting until you are older to switch to the other.  Collecting early will not affect the amount you will collect from the other.

You can collect a survivor benefit on your deceased spouse's record as early as age 60, and wait as late as age 70 to switch to your own record.

Q6. What if I stop working in my 50s?  Will it affect the amount I collect when I apply at age 62, or 66, or 70?

A.
Your social security benefits are calculated based on your 35 highest years of earnings. It doesn't matter what age you were when your earnings peaked.  

The estimates on your Social Security statement include anticipated future earnings if you have worked in the two years prior to the statement date.  So that estimate may be off if you plan to stop working sooner than that.  You can fine-tune that estimate with Social Security's Retirement Estimator, which can be found on its website at ssa.gov.  You can also get a revised estimate by calling the Social Security Administration at 800-772-1213.

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Social Security Benefits Frequently Asked Questions - Part B

12/9/2018

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Q3. Can I change my mind after taking social security benefits?

A.
Yes, but only once.  Social Security will allow you to withdraw your application for retirement and repay the benefits within your first 12 months of eligibility.  

If you are over full retirement age, you can ask the program to suspend your payment.  If you temporarily stop your retirement benefit between full retirement age and age 70, you will get a higher amount when you start collecting again.

Q4. If I start taking benefits at age 62, can I switch to spousal benefits when my husband claims his social security benefits?

A.
Yes, you can claim your own benefit at age 62, then pick up a spouse's benefit on your husband's record later if it is higher.

When your husband files for his retirement funds, you will be eligible for an additional benefit on his record if your full retirement age amount is less than half of his.

Keep reading more social security FAQs. 
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Social Security Benefits Frequently Asked Questions - Part A

12/8/2018

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Q1. Is there a maximum social security benefits I could receive?

A.
Yes, it depends on your year of birth, your annual taxable income, and the age you start collecting social security benefits.

The highest amount someone who turns age 66 in 2019 could get is $2,861 per month.  But you can increase it by waiting till age 70, which would be $3,776 a month, that's because your benefit increases by 8% a year between full retirement age and age 70.

Q2. Does contributing to 401(k) impact my social security earning limit?

A.
No, contributing to a 401(k) plan does not reduce the amount of earnings that social security program uses for tax purposes or its retirement earnings test.  Social security looks at your gross earnings before any tax-deferred deductions and allotments.

Keep reading for more social security FAQs.
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Rule of Thumb 4 - Annual Withdrawal Rate

12/7/2018

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How can I make my retirement savings last? 

A. One of the most challenging questions many retirees face is how much to withdraw from their savings in retirement. Withdraw too much and you risk running out of money. Withdraw too little and you may not live the life you want to in retirement.

The rule of thumb is to limit withdrawals to 4% to 5% of your initial retirement savings
 , then keep increasing this withdrawal based on inflation.  For a more detailed discussion, please read the Fidelity article here.
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