The Finn Blog

Happy Birthday, George

February 16, 2015 – If you’re off work today here in the United States, it may surprise you to know that it’s not because Presidents Day is a federal holiday since no such holiday exists.

5 USC § 6103(a) does, however, make Washington’s Birthday, celebrated the third Monday of each year, a federal holiday.

As presidents go, George Washington usually ranks among the top five all time in terms of overall net worth. Not all presidents were so lucky with their fortunes.

In fact, about 20% of our nation’s chief executives experienced insolvency at one time or another in their lifetimes.

Who knew the position was fraught with such a high chance of financial insecurity?

FranklinOne famous founding father whose age was likely the only thing preventing him from becoming president was Benjamin Franklin. Ranking No. 181 on the all-time richest people ever list, Franklin did pretty well for himself and his heirs moneywise.

Franklin was 83 at the time of Washington’s inauguration, 26 years older than our first president.

In addition to passing a significant amount of property and valuable personal possessions to his heirs, Franklin’s last will and testament laid out some pretty detailed annuity requirements.

The one for his sister, Jane Mecom, was a rather straightforward “fifty (later increased to sixty) pounds sterling . . . to be paid to her annually” annuity in addition to the house he bequeathed her.

The annuities left to the cities of Boston and Philadelphia for schooling, hospitals and apprenticeships were a little more creative and specific. And they were set up to run for 200 years. Now THAT’s forward thinking!

Unlike Washington, who married into his fortune, Franklin’s wealth was a result of his own initiative.

And you can bet a man who preached that “a penny saved is a penny earned” understood the value of the time value of money. No doubt this belief influenced his annuity decisions.

Perhaps helps explain why most people would rather have a Benjamin than a George.

Image courtesy of Gualberto107 at FreeDigitalPhotos.net

Why Retirees Don’t Buy Annuities

February 15, 2015

Are you among the 76 million people born between 1946 and 1964?

Worked most of your adult life?

Have some money sitting in a 401(k) or similar retirement account?

Want to make sure it lasts the rest of your life?

Retirement

If you answered yes to any of these questions and are retired or within a decade or so of retiring, there’s a good chance you could benefit greatly by converting some of your nest egg into some type of annuity.

But there’s an even better chance you will never do so.

Even though annuities have been shown to be “the most cost-effective and least risky asset class for generating guaranteed retirement income for life,” people still resist buying them.

Why does this annuity puzzle persist despite an excellent track record and strong evidence that people who choose annuities are happier and might even live longer?

They’re safe. They’re secure. They’re practical.

And They WORK!

To gain insight into this paradox, Forbes has a brief slide show that does a pretty good job identifying the “8 Reasons Retirees Don’t Buy Annuities.”

No reason for you to be one of “those” people. When you’re ready to put the “I” in your retirement, give us a call to let us help you decide whether or not a retirement annuity makes sense for you.

BONUS INFO:  By the way, contrary to rhetoric espoused by many in the financial planning community, annuities and traditional investing can co-exist very nicely.

In fact, when you address your non-discretionary retirement cash flow needs with annuities, you take a lot of pressure off your portfolio (and yourself) to constantly perform at an unsustainably high level.

Owning annuities allows you to better absorb the market ups and downs, reducing the chance you’ll make panicky moves which could leave you in a weakened long term financial position.

Image courtesy of hyena reality at FreeDigitalPhotos.net

Financial Health Assessment

February 13, 2015 – In less than the time it takes you to read this blog, you can give yourself a quick financial health check-up to learn where you stand financially.

CalculatorWhile I can’t attest to the accuracy of the Financial Health Calculator I stumbled across on CNNMoney’s website today, I found it personally very helpful and wanted to pass it along in hopes it might help you.

After entering your age and income, the calculator walks you through a series of seven categories of spending, savings, investments and insurance to arrive at a grade with recommendations on how to improve your score.

It’s quick. It’s easy. It’s fun.

No simple calculator should ever substitute for actual financial advice but as a starting point for further dialog, this one feels worthwhile.

So click the link and start typing.  Here’s hoping you earn a passing grade.

Image courtesy of foto76 at FreeDigitalPhotos.net

Oops! . . . It Did It Again

CAUTION: Blog post contains musical references which some readers may find bubble gummingly offensive

February 2, 2015 - If the stock market were a song and January were Britney Spears, right about now it would be singing a paraphrased version of the former teeny bopping icon’s hit, “Oops! . . . I Did It Again.”

What “it” did – decline more than 3% for the month – isn’t particularly remarkable in and of itself.  Over the past sixty-five years, January has been a down month for the market about 40% of the time.

But the reason it’s Britney Spears song-reference worthy is because of what this drop could signal for the rest of the year.

Key Stat: Since 1929, market indexes for the year followed January’s lead 72% of the time.

Any discussion about markets must begin and end with the reality that nobody can accurately predict what the market is going to do or when.

Bear_Head_clip_art_mediumBut regardless of whether or not you’re in the chance taking business, this might be a good time to pause and ask yourself whether the promise of higher gains really outweighs the historical probability of loss.

Are the bears back in town?

With the stock market bulls having had such a phenomenal run these past few years, doesn’t the very ebb and flow nature of the market increase the probability that a bear run – maybe even a recession – is nigh?

Young people usually have time to recover from these market swings. But those heading into the bell lap of life cannot afford to loose money.

So if you’re in the latter category, let a Retirement Income Certified Professional® help you make an informed decision about your future. Our firm is committed to offering retirement cash flow solutions that are safe and secure and will help you get the most out of your hard-earned retirement dollars.

By the way, even though “da Bears” weren’t playing in yesterday’s Super Bowl, another bearish statistic that’s making the rounds today has to do with New England’s win.  It goes like this:

When an original NFL team wins the Super Bowl, the market will go up.

If an expansion team wins, the market will go down.

Funky Stat This “Super Bowl Theory” has been accurate 80% of the time.

Sooner or later, the bear will arrive if he’s not already lurking about. Locking in some gains and securing your future now might help you prevent the next “Oops!” which is sure to come knocking some day.

Retirement: How Ready Are You?

January 9, 2015 - “Apples, peaches, pumpkin pie….”

Remember that?

If you once lived in a house without satellite, cable or, heck, even color television, you likely recognize this familiar jingle as part of something you shouted, before opening your eyes, when you were “it” during a neighborhood game of hide-and-go-seek you played as a kid.

You might even recall the Jay & the Techniques song of the same title still occasionally played on oldies stations.

For my part, it’s the second stanza of the popular kid game phrase which came to mind as I finished taking The American College Retirement Income Literacy Quiz earlier today.

“…Who’s not ready holler I.”

As recently reported on CNBC and in several newspapers – USA Today, Washington Post, and Chicago Tribune among them – many of us from the Leave It to Beaver generation are simply NOT ready for retirement.

[CLICK HERE] to Quiz Yourself on Your Own Retirement Literacy

The New York Life Center for Retirement Income at The American College commissioned an online survey to “assess retirement literacy among individuals who are nearing or already in retirement.”

One of the most comprehensive surveys on retirement income literacy ever conducted, the RICP® Retirement Income Literacy Survey covered a host of retirement basics topics such as:

Social Security claiming options,

Medicare and health insurance planning,

Company retirement, IRAs and Investments,

Life insurance, Long-term care, Etc.

The “I’s” have it

Only 20% of those surveyed received a passing score of 60% or better.

ID-10094861With an average score of only 42%, the majority of survey respondents – and by extrapolation, Americans – are not knowledgeable enough about some very basic choices they’ll need to make leading up to and during retirement.

Fortunately, having spent the better part of 2014 earning my Retirement Income Certified Professional® designation through The American College, I had enough retirement knowledge fresh in my brain to be able to pass the quiz with flying colors.

I got a 91%.

But honestly, even though I’ve been in the insurance industry for nearly all of my adult life, until about a year ago I seriously doubt I would have scored nearly as well. I may not have even passed myself.

I strongly encourage you to take a few minutes to take the quiz for yourself to see how you fare.

Then, when you have questions about anything relating to your own retirement situation, don’t hesitate to call us to let us know how we can help you get ready for this important transition.

Because remember the song’s refrain:

“Ready or not, you shall be caught!”

(Image courtesy of stockimages at FreeDigitalPhotos.net)

2014 Reflections, 2015 Intentions

December 24, 2014 – A year ago, we prognosticated that 2014 would be “the year of the annuity” based on financial articles we were reading at the time.

Boy, was it ever!

Thanks to the faith and confidence our loyal clientele continue to place in us, 2014 was Finn Financial Group’s BEST YEAR EVER in terms of number of people we were able to help and number of structured settlement and other specialty annuities we placed on their behalf. This past year:

We helped claims associates close files while cost-effectively satisfying their obligations under the Medicare Secondary Payer Act;

We created dozens of structured settlements for minors which will help parents put their children through college;

We designed income tax-free settlement cash flows, many coordinated to work hand-in-hand with Special Needs Trusts to maximize their value, that will help catastrophically injured plaintiffs live their lives free of financial worry;

We designed and conducted training seminars and webinars for casualty companies, the CPCU Society, attorney groups and private law firms;

We helped plaintiff attorneys save money on taxes and secure their own futures by helping them structure their attorney fees;

We analyzed and evaluated options for baby boomers seeking to lock in their own future guaranteed cash flows with retirement funds and savings they didn’t want to risk losing and wrote a lot about the choices they face in The Finn Blog’s retirement section;

I personally re-dedicated myself to educational excellence with the goal of better serving my clients by earning my Retirement Income Certified Professional® designation through The American College and enrolling in the inaugural Master Structured Settlement Consultant course through the National Structured Settlements Trade Association.

All this in addition to the numerous mediations attended, consultations conducted, and questions answered combined to make this one very successful year.

We are extremely honored and grateful for the opportunities you give us to be of service.

Next Year?

So if 2014 was the year of the annuity, what does 2015 hold in store annuity-wise?

I’m so glad you asked!  Look for:

Longevity Annuities – We wrote about this our July 1, 2014 Finn Blog right after the U.S. Treasury announced longevity annuities were going to be an official part of the retirement landscape.  Fortune also has an article this month entitled “Why 2015 is the year for longevity annuities.”

Fixed Indexed Annuities  – The Insured Retirement Institute (IRI) believes this market-linked hybrid is poised to be a “bright spot” in annuity selection during the coming year.

Widely available for those doing regular retirement planning, earlier this year we told you about an indexed-linked structured settlement and structured attorney fee option, offered by Pacific Life, available to our clients who are settling personal, physical injury claims.

Oh, there will be more.  And we pledge to stay on top of it.  Whatever the year, whatever your need, rest assured we’re committed to being here to help you.

“Helping people with their guaranteed cash flow needs.  That’s what we’re all about.”

So as the 2014 Structured Settlement and Annuity season draws to a close, we leave you with all best wishes for a most joyous holiday season and a healthy, happy and very successful year ahead.

Skaters

Happy Holidays from Finn Financial Group!

Kim’s Story

Reprinted from our October 22, 2014 Newsletter

Structured Settlements Changing Lives

Several months ago, I shared Robin’s Story with you.

Today, I’m pleased to pass along the second in a series of first person testimonials on the benefits of structured settlements, produced by Prudential Structured Settlements.

This is Kim’s Story:

Kim's Story

Click [HERE] for link to video

When Prudential formed the Structured Solutions Leadership Council several years back, it did so with a commitment to developing tools that would help practitioners and their clients better visualize and appreciate the important role structured settlements can play in the lives of those who benefit from them.

They continue delivering on that pledge with this video.

As a charter member of the council, I am honored to have been selected to join together with a number of industry leaders to aid Prudential with the development of these initiatives that will help so many of our clients.

Many thanks to Prudential Structured Settlements for its vision and support of the ENTIRE structured settlements, claims and legal communities. Along with the many other excellent life markets we are proud to represent, Prudential’s exceptional leadership on this particular initiative deserves special recognition.

Thank you for the opportunity to be of service and best wishes for continued success.

Enjoy the video!

Master Class Highlights

October 21, 2014 – Last week, I had the great honor of participating in the inaugural class of the structured settlement industry’s newest designation and will soon be able to call myself a . . .

Master Structured Settlement Consultant (MSSC)

NDOffered through the National Structured Settlements Trade Association (NSSTA) working in tandem with the faculty at The University of Notre Dame’s Mendoza College of Business, this advanced Master Class curriculum was conceived as an enhancement to the existing Certified Structured Settlement Consultant (CSSC) designation created more than two decades ago.

While some required post-classroom work still needs to be completed before the designation can be formally conferred, I thought I’d take a moment to share with you some of the topics covered:

A Family Affair & Settlement Needs – We heard a first person account from a plaintiff who made an amazing recovery from an accident which rendered him clinically dead and the ensuing efforts by his financial team to design and implement a complex trust which helped facilitate his recovery and protect his settlement;

The Economic Environment – A Notre Dame associate economics professor shared perspectives about the current economic conditions;

Tax Policy and Tax Policy Challenges & Tax Reform Issues in the U.S. Congress – We got a double dose of insights on tax policy from a Deloitte Director of Tax Policy which tied in nicely with the comments from Chief Tax Counsel for the Senate Finance Committee;

Taxation – Structured Settlements – We learned firsthand how the Internal Revenue Service applies Sections 104(a)(2) and 5891 tax law to situations where taxpayers seek guidance on settlements which may fall into grey areas of the law from the IRS branch chief whose office handles such requests;

Business Ethics – A thoughtful session on business ethics was led by Notre Dame Associate Professor of Management Fr. William Oliver;

Negotiation – Listening and negotiations skill techniques were shared from a Notre Dame faculty professor with advanced degrees on the topic;

The Psychology of Grief – One of the better sessions, this interactive lecture was led by a psychologist who consults with those involved in national tragedies like 9/11, Hurricane Sandy and Sandy Hook Elementary;

Life Care Planning - A Certified Life Care Planner shared insights on how life care plans are developed, modified and implemented;

Affordable Care ActImpact of the ACA on settlements was discussed;

Sudden Wealth SyndromeInsights from a financial planning author about some of the pitfalls that await those receiving large sums of money and how guaranteed cash flow can help avoid them.

The sessions were intense but our thirteen hour days were well spent and the curriculum content provided me with added personal insight about issues that impact the lives of the clients I serve.

Congratulations and a big “THANK YOU!” to the collective brain trust responsible for developing and implementing this very professional industry-specific educational program.

PS  Go Irish!

IRS on S&P 500 Linked Structured Settlement: It Works!

September 13, 2014 – Every Friday morning, when the Internal Revenue Service releases its written determinations to the public as required by law, not much fanfare is usually made of the event.

(Insert chirping crickets soundtrack here)

But with the release of Private Letter Ruling 201435006 on August 29, 2014, everyone involved in the resolution of personal, physical injury claims will want to be aware of this particular PLR and understand its implications.

Stock Index Up IconThat’s the date the IRS publicly declared it would accord an S&P 500 linked structured settlement annuity the same tax treatment as traditional, non-indexed structured settlements.

As always PLRs cannot be cited as precedent even though they are commonly viewed as very strong indicators of how Treasury will interpret existing law.

Subscribers to the Finn Financial Group e-newsletter may recall our April 16, 2014 issue which introduced our clients to a then-brand new structured settlement option being marketed by Pacific Life called the . . .

Structured Settlement Indexed Linked Annuity Payment Adjustment Rider

Fulfilling our promise made to readers at the time, the anticipated PLR is now available on the irs.gov website.  (Just click the link in paragraph two)

Since we laid out the particulars of Pacific Life’s indexed option sufficiently last April, no need to go into the details again here. Just click the orange words above to read our newsletter.

Suffice it to say, though, that an S&P 500 linked structured settlement annuity, while not appropriate for everyone, can certainly fill a void in certain situations.

Case in point:  Several of our clients in their fifties have already benefited from indexed annuities we placed for them using their own personal retirement funds. 

Based on that success, we believe this option has unique advantages to plaintiff attorneys who structure their fees.

So don’t forget to ask for an indexed option next time you reach out for structured settlement illustrations.

Even though we’re certain traditional fixed structured settlements will still dominate the settlement planning landscape, cash flow that might increase in the future may prove too attractive to pass up for many.

A True Independence Day

September 12, 2014 - A couple of months ago, while many of us were celebrating Independence Day grilling hot dogs and watching fireworks, retired U.S. Army sergeant Theresa Hannigan was celebrating a very different kind of independence.

She was “walking” for the first time in three years.

Confined to a wheelchair since 2011, Sgt. Hannigan became the first patient in the United States to take home a robotic exoskeleton, recently approved for personal use by the FDA, which allows her to regain much of her mobility lost to an autoimmune disease that paralyzed her from the waist down.

Sgt. Hannigan with Rep. Langevin

Rep. Jim Langevin, Congress’ only quadriplegic member and himself a recipient of a structured settlement, watches Sgt. Hannigan demonstrating ReWalk.

In my twenty-three years of helping accident victims take control of their financial lives following the settlement of their personal, physical injury claims, I have never seen anything as amazing and liberating as this.

Talk about a game changer.

As a Certified Structured Settlement Consultant, I am regularly called upon to help paraplegics, quadriplegics and other accident victims by creating structured settlement plans designed to help secure their futures and simplify their lives. Income tax-free cash flows are typically arranged to coincide with specific anticipated future medical and income needs outlined in a life care plan.

But even then, in every case, we always allow sufficient cash at settlement and/or plan for future contingency lump sums in case helpful future technological breakthroughs occur which can improve their lives.

One of those breakthroughs is finally here.

ReWalk TestingThe story of how ReWalk Robotics Ltd., the manufacturer of the amazing device which enables paraplegics and others with spinal cord injuries to stand, walk and even climb stairs, came into existence is in and of itself nothing short of spectacular.

A prototype of the ReWalk robotic exoskeleton was developed by Dr. Amit Goffer, an Israeli engineer, who imagined a better life for himself and others following an automobile accident which rendered him a quadriplegic in 1997.

Although this technology is just seeing the public light of day, Dr. Goffer began work on this system shortly after his own rehabilitation was completed. A patent for his gait-locomotor apparatus was filed in May of 2001 and fans of the television show Glee even got a glimpse of the device during the show’s Christmas episode nearly four years ago.

But the table is just now being set for it to become a mainstream reality and the future seems very bright for this technology.

High Tech Car Phone circa 1991For some perspective, think about your cell phone for a minute.  You know the one that takes pictures, shows movies, hails cabs, orders food, keeps you in touch with friends and – oh-by-the-way – can also be used to actually talk with people?

Then think about ReWalk.

If ReWalk can make the same kind of progress in the next twenty years as cell phones have in the past twenty, maybe The Six Million Dollar Man isn’t so far-fetched after all.