Estate Planning Class from Woody Alpern on Vimeo.

Whether death or disability happens quickly or slowly, it is difficult to focus on the official or financial requirement. Instead, all effort is required to deal with the emotional and physical needs. For that reason, addressing the “business” side of death and disability is best accomplished ahead of time. However, for many of us, even if the topic were not about death or disability, the thought of making decisions or organizing paperwork before it is absolutely necessary is difficult.

Aside from sharing information today, our goal is to stress that postponing the “business” side is problematic. To leave all the responsibility to the survivors, many of whom were not the financial person in the family, often creates unintended results.

This presentation is not about wealth and avoiding estate tax. Instead, it is about understanding what you have, addressing the challenges, identifying your goals, and facilitating a smooth transition.

Supplemental Materials:

Part 1 presentation: part-1-nwr-presentation-05-16-09

Part 2 presentation: part-2-dfg-presentation-05-16-09

Quote massaging is a system used in the UK whereby anyone who is seeking to reduce car insurance rates can change one’s job description in order to reduce the cost of insurance.

While this system is not available in the US, it is widely used among the top five UK insurance comparison sites online. Among the sites where you can apply for insurance using quote massaging are: confused.com, uswitch.com, Admiral Insurance, Association of British Insurers, and moneysupermarket.com.

How does quote massaging work? One example cited is this: Let’s assume you are a lawyer. By changing the job description to a solicitor, you may enjoy substantial savings on your car insurance. And if you are a writer, changing the description to journalist may yield savings as well.

What do job descriptions have to do with receiving cheaper rates on car insurance? On the aforementioned comparison websites, entering a job description is a requirement (along with other pertinent information). Once the information has been entered, you are then given insurance quotes.

Thus, experimenting with different types of job descriptions can reduce the cost of car insurance. However, it should be noted that the job descriptions used should be accurate and one should not engage in false claims.

An example given was the case of a man who attempted to obtain cheaper insurance by changing his job description sixty times. While this is an extreme case, it nonetheless reflects how the system of quote massaging can be misused and abused.

Given the popularity of quote massaging in the UK, one would be curious to know how this same system could be used in the US. For example, years ago, men who worked for the Sanitation Department were known as “garbage men.” Today, however, their job description could accurately be called “sanitation engineers.”

If you are looking to reduce the premiums on your car insurance, it may be worth your while to check out these comparison sites and try out different but related job descriptions to determine just how much you can save.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

A licensed insurance agent can be a valuable resource. You would visit a travel agent to discuss destinations, rates, and obtain the latest updates only a travel agent could provide; a licensed insurance agent works in a similar way.

Let’s assume you need a specific type of insurance. An insurance agent can search for those policies that meet your needs. He can answer many questions you may have, can apprise you of discounts offered through his company, can help you with filing claims in an expeditious manner, and can review your existing policies to ensure you are fully covered.

On the other hand, before speaking to an insurance agent, it is recommended that you engage in some research on your own. While it may take a little more time, you can certainly find the most affordable insurance rates on your own either by checking companies online or by calling them directly.

However, if you do not have the time or the inclination to do so, finding a really good licensed insurance agent can make all the difference. The only caveat is that some agents may try to talk you into purchasing insurance you neither need nor can afford.

Just like travel agents, most insurance agents work on commission. And just like travel agents, if the trip and/or the arrangements made are unsatisfactory, an agent will lose a valuable customer.

Ultimately, using the services of a licensed insurance agent can benefit you in a variety of ways, including:

* Finding the best deal
* Offering information not readily available to you
* Help you to make the right choices
* Explain the different types of insurance and if they are beneficial to you

Therefore, it’s a good idea to find an agent whom you feel comfortable with, who listens to your concerns, and doesn’t seem overly zealous when it comes to your insurance needs.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

We are all looking to find ways to increase savings during this economic recession. Reducing the cost of your home insurance policy can help in this regard. Here are six ways you can lower the costs.

1. Stay with the same insurer. You can take advantage of discounts offered by your insurer if you purchase all insurance policies with one carrier. For example, having a homeowners and automobile insurance with the same company can yield up to 15% discount on your premium.

Moreover, the longer you remain with the same insurer, the better chance you have of obtaining additional discounts. For example, homeowners who have been with a company for five years or more may qualify for a special discount.

2. Increase the deductible. While you may currently have a $500 deductible, by raising it to $1000 you can save up to 25% on your premium.

3. Add security features. By installing smoke alarms, burglar alarms, and special locks, you can save as much as 20% on your premium. To find out if your insurance company offers these types of discounts, give them a call and determine how much you may be able to save in this regard.

4. Age-related discounts. Some insurance companies offer discounts to individuals who are 55 or older and retired. Check with your company and ask if they offer such discounts.

5. Annual review of your policy. This is another way you can cut costs on your policy. If you have expensive items in your home that are covered under a floater attached to your homeowner’s plan, these items will depreciate each year and may no longer have to be covered.

6. Good credit. One of the components used in determining how much you will pay for insurance is based on your credit rating. Therefore, to keep costs down it’s a good idea to ensure that you check your credit report and FICO score annually and correct any errors you detect on the credit report. Do not skip any monthly payments on credit card bills or loans, and maintain a good credit history.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

Maybe you’ve carefully crafted a budget that accounts for every penny that comes in each month. Or maybe a budget seems like a waste of time to you. Either way, impulse buying can have a negative effect on your financial picture.

There’s nothing wrong with buying something we want every now and then if we have the money. If you work hard for your money, you should be able to spend some of it on things that make you happy. But when we don’t carefully consider our discretionary spending, we may end up doing too much of it. This can leave us saddled with debt, scrambling to pay bills or skimping on the savings.

There’s a simple rule that can help us avoid impulse spending. Instead of buying something you want as soon as the thought crosses your mind, wait a month before you make your purchase. A month might seem like an eternity when you want or feel that you need something, but unless it’s food, shelter, clothing or water and you don’t have any, it can probably wait that long.

Waiting a month before buying has several advantages:

* Once a month has passed, you can more clearly evaluate whether or not the purchase is wise. When we first see something that appeals to us, it is exciting. We may get the feeling that we need it right then, when in reality it’s something that we may never even use. Waiting a while will give that euphoria time to wear off, and we’ll be able to look at the purchase more realistically.

* You’ll have time to do some research. A month is more than enough time to check prices from a variety of sources. You can also look for alternatives that might better suit your needs. When it’s decision time, you’ll be much better informed.

* The price on the item you’ve got your eye on could go down. Electronics often experience a drop in price a few months after they hit the market. So if you’re interested in a newish gadget, waiting could save you money. This is also true for clothing, so if you see something that you love mid-season, waiting a month could give it time to hit the clearance rack.

In today’s fast-paced society, it’s easy to get in the mindset that we need things right now. This way of thinking leads to impulse spending. By slowing down and giving ourselves time to really think things through, we can avoid spending money on things that we could do without. And if we do find that we really needed the item, we can buy with confidence that we won’t regret the purchase in a week or two.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

There are several factors that will determine whether or not you need life insurance. Here are some tips on how to choose a policy that is right for you.

* Who should buy life insurance? Life insurance is recommended to those who have dependents, those who are self-employed or own a business, and those who want to ensure that their surviving spouse will have enough funds to cover funeral and burial expenses as well as any outstanding debts or taxes incurred.

* How much insurance do you need? This is also dependent on several factors. In addition to the expenses already mentioned, you may want to cover education costs for the children. You may also require a supplemental safety net in case a situation arises such as illness or if you need to borrow money.

While some experts agree that most people who buy life insurance do not buy enough, others will say that most people buy too much. How much is enough is determined by how much debt has been incurred including mortgage, credit card debt, tuition and expenses, and the needs of the surviving spouse as well as the children. Once that calculation is made, one can then ascertain the amount of coverage needed.

* What type of insurance should you obtain? There are two types: term life and whole life. Term life is insurance that is only good for a specific period of time, whereas whole life insurance has no expiration and allows you to borrow from the policy or cash it in.

Term life insurance varies in cost. Depending upon your age, whether or not you smoke, your current health, and income may inflate the cost of this type of policy. But, in general terms, term life insurance is usually affordable.

* Understanding the types of life insurance available is critical. It is recommended, therefore, that you research each type as well as the insurance companies who provide the policies. Then set up an appointment with at least five agents to obtain proposals that you can compare and contrast.

Once you have decided on the type of insurance and the insurance company, think about it before signing on the dotted line. Ensure that this policy meets all your needs.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

In order to determine whether you should invest in stocks, annuities, or both, it is important to understand each component and how they compliment each other in an investment portfolio.

With today’s stock market at an all-time low, some experts would recommend that this is a good opportunity to invest in stocks. The “buy low, sell high” adage may yield positive results if you are willing to invest in the long term.

Conversely, some would also argue that annuities are a safer bet in today’s economy. An annuity is an investment that yields a guaranteed payout. There are two types of annuities: fixed and variable.

In a fixed annuity, a specific amount is invested and payouts are received monthly, quarterly, or annually. The fixed annuity offers a guaranteed payment wherein the principal amount is never lost, even though there may be a decrease in interest.

A variable annuity comprises stocks, bonds, mutual funds, and treasuries. Unlike the fixed annuity, there is a risk there may be some loss of principal due to the fact that the investment covers a wide range of securities.

An investment portfolio, such as a 401K, for example, allows for contributions to be made into the fixed or variable funds, or a combination of both. The fixed annuity may yield a rate of 8.25% whereas a variable annuity may yield five times the rate of a fixed – but again, it is subject to market volatility.

The bottom line is that an investment portfolio that comprises both stocks and annuities do compliment each other. There are many providers who offer what is called “fixed index annuities” that are tied to the stock market index such as Dow Jones and S&P.

There is no question that variable annuities offer long-term growth. However, it is important to research the many providers to ascertain who offers the best combination of these funds.

Whether you decide to invest in stocks or annuities or both, it is recommended that you keep contributing to the investment portfolio. Even though the economy is in a recession, the market will eventually correct itself and the investments you currently own will produce a higher rate of return.

Finally, here is a tip you may find useful. If you have a 401K, change the contribution to the fixed rate fund. When the market begins to rally, you can then opt to change to Variable A or a combination of both.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

No matter what the circumstances, leaving a job can be stressful. If you are laid off or fired, the prospect of seeking new employment without having a paying job can be frightening. When you retire, not knowing what your financial future holds may cause anxiety. And even if you’re leaving to take another job, there is usually a period of a few months before you can take advantage of that job’s benefits.

A severance package can help see you through such uncertain times. But not every employee is entitled to one. Here’s what you need to know about severance packages and how to make the most of them.

Am I Guaranteed a Severance Package?

There is no law mandating that companies have to provide severance packages to their employees. The only thing that is provided for by law is the opportunity to temporarily continue your health insurance at your own cost. But many companies do offer severance packages under certain circumstances.

The details of your company’s severance policy may be found in your employee manual, or in your employment contract. It is important to review these things before taking a job. If your severance package is detailed in your contract, you can negotiate for what you want before signing. The company doesn’t have to change anything, but if they are really interested in hiring you, they may be willing to make some concessions.

In most cases, companies only provide severance packages for employees who are laid off or retire. But firms may choose to offer severance benefits to employees who resign with notice, or in some cases even those who are fired. These situations are often considered on a case-by-case basis, and the employee may hire a lawyer to help negotiate benefits.

What’s Included in a Severance Package?

Severance packages vary significantly. But in most situations, the benefits provided are based on the benefits one received as an employee. These may include the following:

* A payment based on the length of service. This payment is often equal to 1 to 2 weeks of pay for each year of service for hourly and salaried employees, up to a maximum of 26 weeks. For executives, it may be 6 to 12 months’ pay.

* Payment for accrued vacation time. Some firms also offer payment for unused sick leave.

* Insurance benefits. These may include medical, dental and life insurance.

* Retirement benefits and stock options. These may be continued just as they were while the individual was still an employee.

* Help finding a new job. This is typically provided for employees who have been laid off.

Severance packages are a way of saying “thanks” for an employee’s service. But they can benefit the company as well. As a condition of accepting a severance package, employees must usually agree not to pursue legal action against the former employer or attempt to collect unemployment benefits. They may also have to agree not to go to work for a competing company.

A good severance package can help ease the transition from your old job. If you feel that you’re not getting a fair shake, and employment attorney may be able to help you get the pay and benefits you deserve.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

Do you have things sitting around that you’re not using? Most of us do. There are a few ways we can get rid of these items. We could have a garage sale, but pricing and organizing things takes up a lot of time. We could take it to the landfill, but that’s wasteful if someone else could use it. Or we could freecycle it.

Freecycling is a movement that encourages people to give the items they don’t need to those who can use them. It’s a great way to get rid of clutter, and for the recipient, it’s a great way to save money. But how can those with things to give away connect with people who need them? Through a local Freecycle group!

Freecycle is a non-profit organization that utilizes email groups to facilitate giving. Founded in 2003, Freecycle originally consisted of a few dozen team members who drove around the Tucson, Arizona area trying to find homes for unwanted items. Organizers realized that email would be a much more efficient means, so they set up the first mailing list. The concept spread like wildfire, and today there are Freecycle groups all over the United States and in over 85 other countries.

There are Freecycle groups in most cities, as well as many rural areas. If there is no group in your area, you can apply to start one. All group organizers work as volunteers, with the support of the organization.

How Freecycle Works

In order to use Freecycle, you must join your local group. Links to groups in your area may be found on the official Freecycle website (Freecycle.org). Most groups are run through Yahoo Groups, which makes it easy for any member to post messages to all other members. Some groups allow anyone to join, while others require moderator approval. Just follow the instructions provided to sign up.

Once you’ve joined, you can post offers. This is generally done by sending a message with the word “Offer” in the subject line, followed by the item name and location. Provide any pertinent details, and let members know if you wish to be contacted in any way other than email. Those who are interested can email you through the group. Once the item is given away, the giver is asked to post a message stating that the item has been taken.

Anyone in the group may respond to an offer, but it is up to the giver to decide who gets it. There is no rule stating that items must be given on a first-come, first-serve basis. The only requirement in most groups is that all items be completely free, and that nothing illegal or adult-themed is given away.

Members may also ask for items they need. If another member has the item, he can contact the requester and arrange for pickup or delivery. While there is no requirement to give items away, members are encouraged to both give and receive gifts.
Joining Freecycle provides opportunities to both get rid of our “junk” and receive things we need for free. Membership is also free, so there’s no risk in joining. Go ahead, give it a try!

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com

It feels great to get a raise. It makes us feel like we’re being rewarded for all our hard work. It provides an incentive to keep doing a good job. And most of all, it puts more money in our pockets.

It can be tempting to start spending more money when we get a raise. Just a few extra dollars on each paycheck can make it possible to go out to eat once a week or start building up your wardrobe. But saving that extra money offers more long-lasting benefits, and it is relatively painless.

Think about it. You’ve probably been living on the pay you received prior to your raise for a year or so, and you survived that year. It’s not much of a stretch to be able to survive another year without that extra money. Of course you wouldn’t want to turn it down, but why not put it away to build an emergency fund, a college fund for the kids or a nest egg for your retirement?

And just imagine how much money you could save if you saved your raise every year. If you received the same percentage raise each year, you could put away over twice as much out of each check next year as you did this year. The following year, you could add a little bit more to it than you did the year before. As long as you can live on the same amount of money, you can increase the amount you save each year.

While you’re saving your raises, consider adding your bonuses to your savings as well. It’s tempting to go out and spend like crazy when we get a windfall of money, but it’s smarter to save it. Bonuses are money that we usually do not include in the budget, so we probably won’t miss them.

How to Save Your Raises

There are many ways we can put money into savings. But which is the best vehicle for saving raises and bonuses? That depends on your goals.

When it comes to practicality, you can’t beat investing in a 401K retirement account. 401K deductions from your paycheck are tax-free, and you will never have to pay taxes on that money unless you withdraw it before you reach retirement age. Many employers also match your contributions up to a certain percentage or dollar amount, so you’re essentially getting free money.

When you get a raise, you may be able to increase your contribution by the dollar amount of that raise. Or you might have to raise your contribution by a certain percentage. Your human resources department should be able to help you adjust your contribution to meet your goals.

Investing your raise in a college savings account might be a good idea if you have kids. Or you may choose to invest in stocks, bonds, or other investment vehicles. If you have more than one goal in mind, you might choose to divide your raise up among several savings options. If possible, consider having your contributions deducted from your checking account shortly after you get paid so that you’re not tempted to spend them.

If you’re looking for a way to save some money but can’t seem to make room in the budget, saving your raises could be the answer. Instead of adding the extra money into your budget, you can simply send it directly to savings and forget about it. In time, you can save up a substantial financial cushion.

Brought To You By:
Woody Alpern
CPA/PFS
www.yourwealth.com
woody@yourwealth.com