Expect the unexpected—organize for a sudden death or disaster

expected the unexpectedSome people thrive in chaos. The more paper and bank statements strewn on tables, chairs and inbox trays the better. While that may be OK for you now, it is no way to leave your financial matters or estate papers to those who have to make sense out of it well enough to care for your needs should you become unexpectedly incapacitated. It is especially hard for loved ones who can’t see through the grief and pain of your loss to see how to endure and survive the sudden change.

Expect the unexpected. Try to avoid adding trouble and frustration to the grief such an event causes. Bring some proper order to the important paperwork. Here are some specific suggestions that will help:

  • Put some money in a rainy day fund. How would important expenses be paid in a timely manner if you die or become suddenly incapacitated? An account with sufficient liquidity should be in place.
  • Get all the important documents in one place, and leave a note (where it will found) about where they are.
  • Think about consolidating accounts. Is it still necessary to have multiple checking and/or credit card accounts? If not, a simple financial account structure may be helpful to the family members who have to figure things out and settle your affairs.
  • Make sure your insurance coverage is sufficient.
  • Make it easy for heirs to access your valuables. The beneficiaries and co-owners of safe-deposit boxes should be up-to-date, and they should know who they are.

Lawyers will tell you that there is no horror story greater than when there is no plan for death or disaster. Make an enduring legacy for yourself by making the transition a success story. Expect the unexpected and have a good (and easy-to-execute) plan.

A lot could be written to expound on this post, but we’ll leave that to the experts. The idea for this post came from a web page on the FDIC’s website, “Expect the Unexpected: Plan for Death or Disaster”. We encourage you to read that page and hope that it is as helpful to you as it was to us.

Social Security Claiming Strategies for Married Couples

Social Security Claiming Strategies for Married CouplesDeciding when to begin receiving Social Security benefits is a major financial issue for anyone approaching retirement because the age at which you apply for benefits will affect the amount you’ll receive. If you’re married, this decision can be especially complicated because you and your spouse will need to plan together, taking into account the Social Security benefits you may each be entitled to. For example, married couples may qualify for retirement benefits based on their own earnings records, and/or for spousal benefits based on their spouse’s earnings record. In addition, a surviving spouse may qualify for widow or widower’s benefits based on what his or her spouse was receiving.

Fortunately, there are a couple of planning opportunities available that you may be able to use to boost both your Social Security retirement income and income for your surviving spouse. Both can be used in a variety of scenarios, but here’s how they generally work.

Every situation is unique, so these strategies may not be appropriate for all couples. When deciding when to apply for Social Security benefits, make sure to consider a number of scenarios that take into account factors such as both spouses’ ages, estimated benefit entitlements, and life expectancies.

 

File and suspend

Generally, a husband or wife is entitled to receive the higher of his or her own Social Security retirement benefit (a worker’s benefit) or as much as 50% of what his or her spouse is entitled to receive at full retirement age (a spousal benefit). But here’s the catch: under Social Security rules, a husband or wife who is eligible to file for spousal benefits based on his or her spouse’s record cannot do so until his or her spouse begins collecting retirement benefits. However, there is an exception–someone who has reached full retirement age but who doesn’t want to begin collecting retirement benefits right away may choose to file an application for retirement benefits, then immediately request to have those benefits suspended, so that his or her eligible spouse can file for spousal benefits.

The file-and-suspend strategy is most commonly used when one spouse has much lower lifetime earnings, and thus will receive a higher retirement benefit based on his or her spouse’s earnings record than on his or her own earnings record. Using this strategy can potentially boost retirement income in three ways.

  1. The spouse with higher earnings who has suspended benefits can accrue delayed retirement credits at a rate of 8% per year (the rate for anyone born in 1943 or later) up until age 70, thereby increasing his or her retirement benefit by as much as 32%.
  2. The spouse with lower earnings can immediately claim a higher (spousal) benefit.
  3. Any survivor’s benefit available to the lower-earning spouse will also increase because a surviving spouse generally receives a benefit equal to 100% of the monthly retirement benefit the other spouse was receiving (or was entitled to receive) at the time of his or her death.

Here’s a hypothetical example. Leslie is about to reach her full retirement age of 66, but she wants to postpone filing for Social Security benefits so that she can increase her monthly retirement benefit from $2,000 at full retirement age to $2,640 at age 70 (32% more). However, her husband Lou (who has had substantially lower lifetime earnings) wants to retire in a few months at his full retirement age (also 66). He will be eligible for a higher monthly spousal benefit based on Leslie’s work record than on his own–$1,000 vs. $700. So that Lou can receive the higher spousal benefit as soon as he retires, Leslie files an application for benefits, but then immediately suspends it. Leslie can then earn delayed retirement credits, resulting in a higher retirement benefit for her at age 70 and a higher widower’s benefit for Lou in the event of her death.

File for one benefit, then the other

Another strategy that can be used to increase household income for retirees is to have one spouse file for spousal benefits first, then switch to his or her own higher retirement benefit later.

mature coupleOnce a spouse reaches full retirement age and is eligible for a spousal benefit based on his or her spouse’s earnings record and a retirement benefit based on his or her own earnings record, he or she can choose to file a restricted application for spousal benefits, then delay applying for retirement benefits on his or her own earnings record (up until age 70) in order to earn delayed retirement credits. This may help to maximize survivor’s income as well as retirement income, because the surviving spouse will be eligible for the greater of his or her own benefit or 100% of the spouse’s benefit.

This strategy can be used in a variety of scenarios, but here’s one hypothetical example that illustrates how it might be used when both spouses have substantial earnings but don’t want to postpone applying for benefits altogether. Liz files for her Social Security retirement benefit of $2,400 per month at age 66 (based on her own earnings record), but her husband Tim wants to wait until age 70 to file. At age 66 (his full retirement age) Tim applies for spousal benefits based on Liz’s earnings record (Liz has already filed for benefits) and receives 50% of Liz’s benefit amount ($1,200 per month). He then delays applying for benefits based on his own earnings record ($2,100 per month at full retirement age) so that he can earn delayed retirement credits. At age 70, Tim switches from collecting a spousal benefit to his own larger worker’s retirement benefit of $2,772 per month (32% higher than at age 66). This not only increases Liz and Tim’s household income but also enables Liz to receive a larger survivor’s benefit in the event of Tim’s death.

Things to keep in mind

  • Deciding when to begin receiving Social Security benefits is a complicated decision. You’ll need to consider a number of scenarios, and take into account factors such as both spouses’ ages, estimated benefit entitlements, and life expectancies. A Social Security representative can’t give you advice, but can help explain your options.
  • Using the file-and-suspend strategy may not be advantageous when one spouse is in poor health or when Social Security income is needed as soon as possible.
  • Delaying Social Security income may have tax consequences–consult a tax professional.
  • Spousal or survivor’s benefits are generally reduced by a certain percentage if received before full retirement age.

For more information about your options and the benefit application process, contact the Social Security Administration at (800) 772-1213 or visit www.socialsecurity.gov.

 

Contact our Peoples Investment Services, Inc. representative at 828-464-5620 or  www.raymondjames.com/PeoplesInvSvcs. 

This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC, an independent broker/dealer, and are not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, are not guaranteed by the financial institution, and are subject to risks, including the possible loss of principal.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015

Guide to Internet Security

Guide to Internet SecurituJust about everybody is on the ‘net by now, which means that just about everybody needs to monitor their internet security on a regular basis. Here are some really good online references to help you.

Everything that connects the internet to you and your loved ones must be secure enough to protect you while doing its job efficiently. Adequate protection generally comes from having the right attitude about online security and performing simple steps. (Securing your smart phone with a passkey is one example of where having the proper attitude will reduce the factor of inconvenience.)

The problem is that it’s hard to keep up-to-date with the latest threats and mitigation techniques. And, as important, it is hard to know whom to trust, what to believe. Here are three websites to bookmark and check regularly:

  1. We often cite the Federal Trade Commission on this blog. Their Computer Security section contains an extensive link-list for topics ranging from What to do with old computers to “Free” Computer Scams.
  2. Consumer Reports also provides helpful links grouped by a topic on their “Guide to Internet Security” page. There is a regular “new topic” featured at the top of the page. Other topics currently include Protect Your Personal Data, Malware, Privacy, Social Networks, Identity Theft and Personal finance (which addresses current news topics such as the Home Depot data breach). We can’t guarantee that the information on these pages has been properly fact-checked for accuracy, but we think they provide links to basic guidance.
  3. Online security content that you can bank is on Peoples Bank’s own website. The bank provides verified, trusted news and solutions for Identity Theft and Online Security Tools, as well as a very robust security system for customers. Browsing this blog’s “Online Security” category posts will get you posts for both a strategic and tactical approach to your internet security (personal and business). Most of these blog posts contain links to other websites for more detailed information.

Source links:

Four Simple Steps To Stop A Cyber Thief

4 simple steps to stop a cyber thief

Cyber crime is a growing threat to everyone’s financial health. Peoples Bank deploys a combination of safeguards to protect our customers’ information, and we encourage our customers to partner with us in that effort. Taking all the available protective steps, we will all be safer and more secure. If you have questions or concerns, please call us at 877-802-1212.

Create c0mplic@t3d passwords. Avoid birthdays, pet names and simple passwords like 12345. It is also important to change passwords at least three times a year. Because friendly theft – theft by someone the victim knows – is the most common type of identity theft or fraud, don’t share your passwords with family members and be mindful of who has access to your personal information.

Keep tabs on your accounts. Check account activity and online statements often, instead of waiting for the monthly statement. You are the first line of defense because you know right away if a transaction is fraudulent. If you notice unusual or unauthorized activity, notify your bank right away. When a customer reports an unauthorized transaction in a timely manner, the bank will cover the loss and take measures to protect the account.

Stay alert online. Be sure computers and mobile devices are equipped with up-to-date anti-virus and malware protection. Never give out your personal financial information in response to an unsolicited email, no matter how official it may seem. Your bank will never contact you by email asking for your password, PIN, or account information. Only open links and attachments from trusted sources. When submitting financial information on a website, look for the padlock or key icon at the top or bottom of your browser, and make sure the Internet address begins with “https.” This signals that your information is secure during transmission.

Mobilize your defenses. Use the passcode lock on your smartphone and other devices. This will make it more difficult for thieves to access your information if your device is lost or stolen. Before you donate, sell or trade your mobile device, be sure to wipe it using specialized software or using the manufacturer’s recommended technique. Some software allows you to wipe your device remotely if it is lost or stolen. Use caution when downloading apps, as they may contain malware and avoid opening links and attachments – especially from senders you don’t know.

Tips for Victims of Cyber Crime:

If you are a victim of fraud and suspect your personal information has been compromised, you should take the following steps:

  • Call your bank and credit card issuers immediately so they can take necessary steps to protect your account.See all Peoples Bank contact numbers.
  • File a police report and call the fraud unit of the three credit-reporting companies
  • Consider placing a victim statement in your credit report and a fraud alert on your account.
  • Keep a log of all the contacts you make with authorities regarding the matter. Write down names, titles, and phone numbers in case you need to re-contact them or refer to them in future correspondence.
  • Contact the FTC’s ID Theft Consumer Response Center at 1-877-ID THEFT (1-877-438-4338) or www.ftc.gov/idtheft.