Friday, November 16, 2012

Understand your 401k statement gibberish?

Did you understand your 401k statement?
Some statements “disclosed” a wide range of fees, as in “your expenses range from 0.25% to 2%,” leaving us wondering where exactly our fees stood. What’s more, the fees came without any guideposts on industry averages. So even if a company was told it paid, say, 1.25%, we would have no idea how those fees stacked up against other plans. This is no accident, critics charge. “They didn’t try to make it plain English and fail,” Employee Fiduciary’s Carpenter says. “They complied with the letter of the law and made it as gibberishy as possible.” Over time, fees can take up to 40% of our nest egg. Some employers are asking for low-fee products. Fewer investment options are offered but they are not better. 25% of assets are invested in actively managed U.S. stock funds and just 9% are in indexed U.S. stock funds. Managers get rich whether we employees make money or not. Small plans usually have to pay more too. It may be better to use an IRA with low-cost funds of 0.02% to maximize retirement funds. Our Guide helps you decide:

Is it time to shop for homeowners?
State Farm Gets 4.7% Homeowners Rate Hike In Illinois. They claim higher claims from weather and home repairs. Buy only what you need and save the increase:

Alert: Agents pushing products to win trips
If your agent talks about a fixed indexed universal life insurance product, FG Life-Gold, ask them about other alternatives. This product is sold to qualify for a 2 night 3 day trip to Las VegasNevada in June 2013. Universal life has a savings account attached to term life coverage. You pay a large commission. Skip it and unbundle coverage. If you need insurance, buy only what you need and save:

FL GOP does not want voters to vote. IS this America?
GOP wants to win no matter what it costs. In one town, the mayor shut down the voting with people in line. After reopening voters could only do absentee ballots. Despite long lines—some waiting over 5 hours—Obama still won in FL.
Lines for hours look like scene from Third World countries.
What is with Florida voters?
Why do they elect people who want to stop the vote?
Are all these people trying to commit fraud?

GOP voter suppression actually helps Obama win election
GOP tried changing the rules, changing ID requirements, end early voting periods, changing time and place of vote, sending GOP goons to intimidate voters, registering only Republicans. This activity just makes people mad enough to stand in line for hours. Despite efforts in 33 GOP controlled states to restrict the vote, exit polls reveal that the minority share of the 2012 electorate increased from 26 percent in 2008 to 28 percent in 2012. 
In NJ, Gov Christy told voters to go to their closed polling places (Sandy) and vote in mobile machines there—the trucks never showed up. Obama still won.

FL AL will not provide health care exchanges to citizens
Rick Scott says he still won't implement parts of President Barack Obama's health care overhaul despite the re-election of the president. The U.S. Supreme Court earlier this year upheld the law, but said that states could decide whether to follow the law. A health report estimates the state could expand its Medicaid coverage to more than 1 million residents without spending additional money by offsetting costs in state-funded hospital programs and other safety nets. Will Scott relent?

VA is not ready to offer health exchanges to citizens
Bob McDonnell has done an about-turn on the establishment of a state health benefits exchange inVirginia. On Wednesday, in a post-election press briefing, McDonnell conceded that Virginia would not meet the Nov. 16 deadline for a blueprint for the state-run exchanges.

KS SC LA will not offer health exchanges to its citizens
Gov. Brownback said his administration won't partner with the federal government to set up a health insurance exchange called for by the federal health insurance overhaul. "Kansans feel Obamacare is an overreach by Washington and have rejected the state's participation..."

AR, NC  will partner with ObamaCare to give uninsured health care
GOP state government decided to rely on Feds to organize exchanges for sales of policies for uninsured, providing subsidy for poor.

NJ WI AZ Gov not decided about helping uninsured
New Jersey has 1.3 million uninsured," said Jeff Brown, health care advocate with New Jersey Citizen Action. "The governor's decision is going to affect hundreds of thousands of people."

MS will offer the uninsured help
Mississippi Insurance Commissioner Mike Chaney has submitted the state's plan for an insurance exchange to the federal government. The deadline is Nov 16 extended.

Most insurers welcome new customers via health exchanges
Spurred by the individual health insurance mandate and the prospect of adding thousands to their rolls, a majority of health insurance leaders say their organizations are already preparing or implementing plans to participate in health insurance exchanges, according to the results of a poll conducted by KPMG.

Women more likely to understand LTC needs but less to have plan
A new study reveals that 30 percent of U.S. female adults said they're not sure how they plan to address their potential long term care needs. And 57 percent of women reported they're likely to need help meeting financial expenses. Having a plan to deal with financial issues increases the likelihood of dealing with emergencies well. Furthermore, only 37 percent of women said they're saving for their future needs, and are significantly less likely to own long-term care insurance than their male counterparts (9 percent vs. 15 percent). Make a plan and be more confident:

Police sue for free speech too
A law enforcement union filed a lawsuit challenging the constitutionality of a Wisconsin law effectively ending collective bargaining for most public workers. The lawsuit comes less than two months after aDane County judge ruled the law unconstitutional as it applies to school district and local government workers. That ruling came in a case brought by Madison teachers and Milwaukee city workers. It did not apply to state workers. Gov Walker is appealing that ruling. Walker exempted from the law, the state police who supported his election. The lawsuit charges violation of equal protection.

Did your advisor tell you they had to raise fees?
For the second-straight year, LPL plans to raise the fees on its brokers. LPL is one of the largest independent brokerage firms. If you advisor did not increase your costs last year, look for it this year. It seems that the larger the brokerage firm revenue, the higher the fees go. You may want to move your portfolio to Vanguard or Schwab, which just lowered fees.

SCAMS           “Only the little people pay taxes.” Leona Helmsley

Regulators going after annuity sellers!!!
In one case, the seller convinced the customer to mortgage her primary residence to invest $300,000 in a variable annuity. The sale was reversed given that the customer intended to retire in seven years, had limited income, expected an equally limited retirement income and would have an insufficient monthly income to make the mortgage payments. The seller was fined $5,000 and suspended for 10 days. Not a big deal. Variable annuity sales can produce 6-10% commission. So $18,000 - $5,000 fine =$13,000.

In another case, the seller forged documents for a variable annuity replacement contract in a state in which he was not licensed to sell insurance products and included false information in the firm’s electronic books and records. Suspended for 3 months.

MassMutual was fined $1.65 million by regulators for not telling variable annuity buyers that they would lose interest when a cap on their  guaranteed minimum income benefit (GMIB) value was reached.

Who owns your account now?
Homeowners Choice has assumed 59,688 homeowners' policies from Citizens Property Insurance Corporation, Florida's state-operated insurance company.

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