Prepared for retirement? Think again

By Daxim Lucas
Philippine Daily Inquirer

It doesn't matter how old you are, but if you thought last year that you’re all covered when your retirement time comes, you might want to think again.

Given the financial upheaval caused by the global economic crisis, UK-based banking giant HSBC believes that a “perfect storm,” of demographic, individual and financial elements, is poised to derail people’s retirement plans “unless they prepare properly now.”

This recommendation is among the insights revealed in the latest survey of the bank’s HSBC Insurance unit, which was published recently.


Perfect storm

“A perfect storm is confronting pensions planning, created by an aging population, falling pension funds values, a drop in state and employer contributions and an economic downturn which is forcing people to make tough financial choices,” HSBC group chair Stephen Green said about the findings.

According to the findings of the fifth annual Future of Retirement study, people’s short-term survival strategies during a recession often create “serious long-term pension ‘downturn deficits.’”

It also noted that there is “a continuing lack of pensions planning, even though people are aware that they are likely to live longer” which is being exacerbated by “poor levels of financial understanding, education and access to advice.”

Also during difficult financial times, people are more concerned with protecting their possessions in the short-term than ensuring they can look forward to a financially secure retirement, the survey revealed.

“The consequence of these combined factors is that many people will struggle to make ends meet when they come to retire, unless they urgently review their priorities and planning,” the HSBC study concluded.

The survey culled its findings from 15,000 respondents in Brazil, Canada, China, France, Hong Kong, India, Japan, Mexico, Saudi Arabia, Singapore, South Korea, Turkey, the United Arab Emirates, the United Kingdom and the United States.

The results are used by HSBC to structure financial solutions for an estimated 128 million clients worldwide.

The latest edition—dubbed “It’s Time to Prepare”—identified a ‘preparedness gap’ in people’s pensions planning worldwide, with nearly nine out of 10 people feeling ill-prepared for their retirement.

It found that only 13 percent of the respondents feel fully prepared for their retirement, and 86 percent are unsure of what income they will receive in retirement.

Only 27 percent feel they fully understand their long-term finances, while 43 percent have undertaken some planning for later life—but still remain unclear about what their retirement income will look like.

More alarmingly, 14 percent have done “no retirement planning at all.”

“The preparedness gap reveals that families need greater support and guidance to effectively handle their finances, not simply in schools and colleges but through trusted advisers providing professional financial guidance,” Green said.


Golden opportunity

“If people prepare adequately for the long-term, an extended later life can present a golden opportunity for many—but now is the time for people to seriously consider boosting their pensions contributions to improve their prospects of a comfortable retirement,” he added. “The cost of procrastination is likely to be high.”

Nonetheless, the study found sufficient basis for hope in strengthening the financial prospects of people of all ages, as their move toward retirement.

The so-called “advice gap” showed that there is a need for solid financial advice to help this market, which financial service firms like HSBC can provide.

The survey revealed this advice gap linking the lack of preparedness to insufficient financial education and guidance.

A full 43 percent of respondents have never had any form of financial education, and 29 percent felt “fairly unprepared” for their retirement, according to the findings.

Almost half—or 47 percent of respondents—have never had any form of professional financial advice, it added.

“This year’s report reveals a need for people to have access to more and better financial advice and guidance to help them survive the downturn while making the right financial decisions for the long-term,” said HSBC Insurance group managing director Clive Bannister in a statement.

But perhaps the most alarming results of the survey showed that, in trying to protect their finances during the ongoing crisis, many people are actually putting themselves in greater financial danger, inadvertently.

People are paying little attention to long-term considerations such as their likely retirement needs, focusing instead on purely practical short-term concerns, which they better understand, HSBC said.

“General insurance solutions—motor, travel, home and even pet insurance—are seen as a greater priority than addressing longer-term needs around insuring health or income, even when job security is in question,” the survey said.


Delay in retirement

And despite global economic uncertainty, only 6 percent said they intend to take out income protection insurance in the next 12 months compared to 16 percent insuring their home.

Also, as a result of the economic downturn, 92 percent of people have changed some element of their finances, with only 19 percent still on track to retire according to their original plans.

Because of the crisis, about 17 percent are reducing retirement savings or stopping saving for retirement altogether, while 18 percent have used savings to pay off debt.

Along with the global trend, 9 percent of respondents now expect to delay their retirement.

“[The survey] reveals the lack of understanding people have around their long-term retirement needs, said Cicero Consulting financial services consultancy director Mark Twigg, whose group conducted the survey. “They are less well-educated or aware when trying to understand these needs and to act on them, than with their short-term requirements.”

“As the economic ‘perfect storm’ threatens, it is important that people are encouraged to understand long-term risks and to manage them effectively. While people are taking more responsibility for themselves, there is also a definite role for financial institutions to continue, and to build on, their work to educate and inform,” he said.

Visa Recommends Serious Credit Card Reform

By Ana Maria Jimeno

The credit card industry has been hit hard by the economic crisis and many credit card issuers are starting to take stock on the impact on the industry. Visa Inc is one such company and in the light of changes in the industry in the form of the credit card reform act, the Visa chief Joseph Saunders has finally made public his opinion on the future of the industry. He was speaking against a backdrop of claims that the act will shake up the industry denying many people who are not creditworthy access to credit.

Saunders believes that for real change to come to the industry, the first thing to do is for the industry stakeholders to take a long look at the industry and how it conducts itself. This is because the card issuers have been very unpopular in the court of public opinion due to the fact that they have encouraged people to spend exhaustively while charging exorbitant interest rates.

This has led to their being disliked and disrespected due to the feeling that they steal from the people. However now that the credit card companies are getting hurt due to the crisis, the companies are faced by the task of winning the confidence of their customers who they have taken for granted in the past.

More Americans are now facing unemployment as they lose their homes and jobs and the number of credit card defaulters is going up by the day. These hard financial times have also caused the credit card holders to be very cautious with their spending and thus using less of their credit cards while a larger percentage avoiding them completely. What remains to be seen is how the credit card issuers will act when the economy does recover. According to Saunders, the credit card legislation will mean that less people will get credit cards and the small number of the beneficiaries will have to have very good credit rating.

This statement is a sign of intent from the card issuer that it looks forward to making quite some serious reforms when the tide lowers. This should mean that Americans need to change their spending habits once the economic recovery begins so that the country does not find itself in the mess it is in at the moment. However this may just be one of the many statements made in the face of adversity and when recovery happens, Americans will get back to spending like any society under a capitalist system where it seems we can's stop ourself from spending more and more each year.

What Is A Skilled Nursing Facility?

By Robert Smith

Skilled nursing facilities are one of the best-known, traditional types of elder care facilities. It is estimated that as many as 1.5 million people in the United States alone currently reside in skilled nursing, or nursing home facilities, which are designed to provide care for individuals who can no longer live independently.

There are many different types of services provided by skilled nursing facilities, including but not limited to: dental care, including laboratory and routine dental services, occupational, physical, and speech therapy, personal care, dietary consultation, supervision and custodial care and social activities.

Medicaid is one way to help offset the cost of SNF care. Many nursing home residents are Medicaid beneficiaries, but the requirements are strict and the application and approval process can take time, so it is best to investigate your options ahead of time. Individuals with long-term care insurance can save significant amounts of money on SNF care, so be sure to look into your options if you havent done so already.

Medicare pays for SNF care when it is considered to be medically necessary, but does not pay for residential or daily living care past 20 days. Deciding on SNF care for a loved on can be a difficult, but in many cases, necessary decision. Making these decisions on your own does not have to be your only option. There are services available to help you make the best choice.

Assisted Living facilities are generally for person's 60 years of age and older. Typical candidates need assistance with "Activities of Daily Living" (ADLs), but wish to live as independently as possible. Assisted Living Residences typically offer a rental arrangement, with residents or their families paying the entire cost privately. Depending upon the terms of the policy, long term care insurance may pay for Assisted Living.

Real Estate Investing Advice: Rich Dad Poor Dad by Robert Kiyosaki

By Elwood Misch

Have you heard about the book "Rich Dad Poor Dad"? If you're into real estate investing, you sure did. If you're into a course of getting out of the rat race, you definitely did hear about it too. And of course, you probably know it's author, who's been showing people the ways to getting rich for perhaps 20 years now. No other than, Robert Kiyosaki, a very well-known financing and real estate investing guru.

At a glance, Robert Kiyosaki's teaching is all about thinking outside the box. This is not a new idea, so what can Rich Dad Poor Dad show us on how to be successful? Well, unlike other financing guru, Robert Kiyosaki won't make you think about making money the old way. He values the importance of education and holding a college degree. However, according to him, if you happen to not have them... it doesn't mean that you can't live a successful life.

Real estate investing, this is how you can have your brain power and create wealth according to Rich Dad. Thinking about it, it's so timely to talk about that matter nowadays that a lot of homes are now in foreclosure. For the most part, Robert Kiyosaki teaches about smart financing and the old tried, tested and true principles of real estate investing is what Rich Dad Poor Dad talks about.

Finding the right properties, getting creative financing and seriously focusing on financial literacy as well as academic literacy are just some part of Robert Kiyosaki's teachings. The ways how can one truly understand what properties are good to buy, when to sell and when to hold. These are the things why Robert Kiyosaki is well known.

Robert Kiyosaki has been followed by many because of his practical ways on how to be successful. He's not the only one teaching it, in fact, he wasn't the first one to teach and talk about ways to be successful. Rich Dad Poor Dad is just one of the many books that discuss about it. However, around his successes, Robert Kiyosaki has also had some controversies.

A lot of people have been questioning and investigating whether the example stories in Rich Dad Poor Dad are true. Many are wondering whether the people in the book do or did exist. Some even have reviewed that the people were made up in order to make the Rich Dad more believable.

I did not know this until recently, but the co-author of his first book, Rich Dad Poor Dad, sued him in 2007. I, like the author, do not know the reason for the suit, but anybody who gets sued, is sued for something dastardly, I'm sure. Frivolous lawsuits can backfire on you.

Regardless of the allegations about fictional characters, Rich Dad Poor Dad author Robert Kiyosaki does give some sound advice about financing and real estate investing. But, there is also another important point. The information he gives is not new. Robert Kiyosaki is also not the only person who gives out this type of advice. If that's true, would you want to invest your time or money with someone who has that much controversy surrounding him or who's been sued in the past?

FAPTurbo, a System That Lives up to Its Reputation

By Alex Miller

It would be nice if we could simply run a computer program and allow it to make us money on a day-to-day basis. The reality of this is a little bit difficult to believe but the fact of the matter is that there are some Forex programs which are able to help you do this. Not all of them are going to give you positive results but there are a few that are worth looking into. Using them on a regular basis may actually help you to make money consistently.

There are literally dozens of these systems that are available from various places on the Internet, some of which are good and others that we would avoid altogether. This is especially the case whenever we are talking about putting the money online and actually trading with one of these programs. There is one that is trustworthy, however, and an increasing number of traders are using it on a regular basis. It is FAP Turbo, a new program that is worth looking at.

Whenever doing our independent testing of these automated Forex programs, there are several different criteria that we always make sure that they achieve. Testing these programs is something that I truly enjoy, especially in the case of any program that is automated and produces results. Not all of them are going to produce results to the good but in the case of FAP Turbo, all of that was positive. That is the reason why a rank so highly on our independent testing website.

The first thing that we look at whenever we are testing an automated program is the website where the program resides. The sales page can often give you a little bit of insight into what the program has to offer for you. As far as FAP Turbo is concerned, they make the claim that you can simply set up a program on your computer and allow it to run and make you money while you do other tasks. They claim to be able to do this consistently on a day-to-day basis.

We also scrutinize the testimonials that are on a webpage rather severely. Although we would not expect somebody to put a negative comment about their own product on their website, and often tells a story whenever you look at the overall experience is that these individuals were having. There were some beginners that sent in testimonials that claim to be able to make money consistently using this program.

As they say, however, the proof is in the pudding and we were very interested in finding out what it was that this program was able to do. In our own independent testing and in the testing of a number of other individuals that we follow on the Internet, the results were consistently good. As a matter of fact, we could not find one review that was negative from somebody that tested this program on a Forex platform.

We also look at a number of different locations to see what the actual users are saying about our products. In the case of this product, the reviews were rather positive and many of these individuals were saying that it was able to make them money consistently. The best part about it is that they did not have a vested interest in the company so you can truly trust what they had to say. We would not necessarily suggest that you totally turn all of your money over to FAP Turbo, but we would suggest that you have it as a tool.

Top Ten Life Insurance Myths

By Mike Gregory

Life insurance can be a complicated product, Akron Ohio. As simple as term life policies are many elements must be considered carefully in order to arrive at the right type and amount. It is the technical aspects of life insurance that are less difficult for most people to understand. It is the calculating on how much life insurance coverage they need and why that causes them to wonder.

What you will read will briefly take a look the some of the most common myths pertaining to life insurance and the truths that they sometimes distort.

First Myth: The amount of life insurance coverage, I need, is equal to twice the amount of my annual salary. That depends. You need an amount of life insurance equal to the amount that is actually required. In addition to obvious bills and expenses, you may need to pay off larger debts such as the mortgage and provide an income for a number of years. A cash flow analysis is usually helpful in order to determine the actual amount of insurance that must be bought - the days of simply computing life coverage based only on one's income earning ability is long gone.

Second Myth: I'm single with no kids, with that being said, why should I spend money on life insurance? As a single person, there are still your final expenses, that is reason enough to have life insurance. If you are uninsured in Akron Ohio, you may leave a burden of these expenses for your family or executor to deal with. Moreover, this can be a good way for low-income singles to do something good for their favorite charity.

Third Myth: My life insurance coverage, through my employer, is sufficient. This could be. For a single person and few bills, employer-provided term coverage is probably enough. But if you have a family, with kids, your needs may be greater. Plus, in most cases, that employer plan does not go with you when you leave that job.

Myth No.4: At least the cost of my premiums will be deductible. Not in most cases. The cost of personal life insurance is never deductible unless the policyholder is self-employed in Akron Oh and the coverage is used to insure the business. Then the premiums are deductible on the Schedule C of the Form 1040.

Myth No.5: I absolutely MUST have life insurance at any cost. In many cases, this is probably true. However, persons with no debt or dependents and sizable assets may be better off self-insuring. If you have no debt and medical and funeral costs are covered, and then life insurance coverage may be optional.

Sixth Myth: I should have some life insurance no matter what the cost. In some cases, this is probably true. With that being said, if you have no debt or children and enough assets you may be better off self-insuring. If you have no debt and medical and funeral costs are covered, and then there is no need for life insurance.

There is also the chance of being uninsurable, which could be disastrous for those who may have estate tax issues will use life insurance to pay them. But this risk can be eliminated with permanent coverage, which can become paid up after a certain amount of premiums have been paid and then remains in force the rest of your life.

Myth No.7: Variable universal life policies are always superior to straight universal life policies. Many universal policies pay competitive interest rates, and variable universal life (VUL) policies contain several layers of fees relating to both the insurance and securities elements present in the policy. Therefore, if the variable sub accounts within the policy do not perform well; the variable policyholder may well see a lower cash value compared to a non variable universal life policy.

Poor market performance can even generate substantial cash calls inside variable policies that requires additional premiums to be paid in order to keep the policy in force.

Eighth Myth: Only the one making the money needs life insurance coverage. This is pure nonsense. The cost to replace the responsibilities that were provided by a deceased homemaker can be higher than you think; the costs for cleaning and daycare are higher than you think.

Myth No.9: I should always purchase the return-of-premium (ROP) rider on any term policy. There are usually different levels of ROP riders available for policies that offer this feature. Many financial planners will tell you that this rider is not cost-effective and it should be avoided. Whether you include this rider or not, will depend on your risk tolerance and your other possible investment objectives.

A cash flow analysis will reveal whether you could come out ahead by investing the additional premium amount, of the rider elsewhere, instead of putting it into the policy. Riders are available to provide additional benefits that help you customize your policy.

Tenth Myth: I will be better off investing my money in Akron Ohio than buying life insurance of any kind. Complete nonsense. Until you reach the breakeven point of asset accumulation, you need life coverage of some amount. Once you amass $1 million of liquid assets, you can consider whether to discontinue, or reduce, your million-dollar policy. But you take a big chance when you depend solely on your investments in the early years of your life, especially if you have children. If you die without coverage for them, there may be no other means to provide for them after they have used up all of your saved assets.

In conclusion, these are just some of the more prevalent misunderstandings concerning life insurance that the public faces today. The key concept to understand is that you shouldn't leave life insurance out of your budget unless you have enough assets to cover expenses after your death.

Credit Repair Mythology, Fallacies And Truthfulness

By Edwin Mason

You have the right to argue items showing up on your credit report. In 1970 the FCRA or the Fair Credit Reporting Act was enacted that gave consumers the right to argue any item showing on their credit report that is imprecise, partial, untimely, misleading, unverifiable, biased, ambiguous or unclear. This includes such things as bankruptcies and foreclosures.

The fact is that incorrect credit such as phony identities; inexact balances, untimely listing, overly ambiguous listings and more are very widespread on credit reports. It is estimated that as many as 75% of all credit reports contain mistakes. You can dispute anything that shows up on your credit report for any reason if you feel that it is not quite truthful. The creditor and credit bureau will then have a certain amount of time to verify the accurateness of the listing. If it cannot be verified within the time frame then it must be removed from the account.

The FCRA gives you the right to credit repair however, it does not give you the right to "debt repair". You do not have the right to remove valid and true debt that is showing on your report. If you owe a valid debt you are responsible for it until it is paid off. You cannot legally use credit repair to evade a genuine debt.

Many times there are critics who tend to mistake the two issues. Debt repair is not officially authorized nor is it lawful, however, credit repair is a legitimate and useful service that many people can gain from. The problem arises when critics and others fail to differentiate the two.

If you have an honest, reliable and accurate listing showing on your credit report you do not have the right to get it removed. However, if the listing is absolutely wrong, ambiguous, misleading, unverifiable, biased or outdated you have the right to issue a dispute. You just don't have the right to eliminate a legally binding debt from your credit report.

If you have problematic debt, there are a few options that you can take advantage of. You can pay the debt down or pay it off. You can combine all of your debts into one, fixed rate loan or you can talk with your creditors and see if they are willing to resolve the debt in any way. This can relieve you of your debt but it can hurt your credit.

But credit repair cannot be used to get out of paying a lawful debt. Credit repair is for wrong credit but it cannot lawfully be used for debt repair. However, do not let this discourage you from taking advantage of your rights to credit repair. If you have harmful or incorrect credit you have the right to try to get it removed.

You can endeavor to do credit repair on your own or you can also take on the services of a lawful credit repair organization. A few superior companies operate within full compliance of the law and they offer an tremendously helpful service that can help you in your credit repair.