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Interest Rates

Lately there has been a lot of buzz in the media regarding interest rates. It is likely that you have already heard that we’ve been in a historically low interest rate environment for some time now. When will rates rise? By how much will they increase? Although we may not know the exact answers to these questions just yet, one thing is certain, we are closer to an interest rate hike than ever before. Many analysts and experts affirm the fact that the Federal Reserve is gearing up for an interest hike and it is important to understand what this may mean.

As the Fed is poised to start rising rates, we must acknowledge that such an increase can, and likely will, have an impact on millions of Americans. Despite all the various predictions as to when rates will rise, it is crucial to be proactive rather than reactive. For investors, it is imperative that they position their investable assets in such a manner that they may alleviate some of the negative impacts associated with a rate hike.

The average American should remain vigilant in an effort to understand the effects of a rate hike. Such a rise in rates can have some unavoidable consequences on their daily lives. This may include changes to the interest rates they pay on their credit cards, mortgages and auto loans. As borrowing money becomes more expensive, this may deter future homebuyers and consumers from spending as they normally would.

Preparation is always a key element of success and this is no different. As an investor, it would behoove you to formulate a game plan now. Since nobody is certain as to when rates will begin to rise, the time to consult with a financial adviser is now. It is in your best interest to develop a strategic game plan that can combat the potential adverse effects of rising interest rates; specifically, the effects that may impact certain asset classes. In the coming weeks, look to learn more about rising interest and the effects associated with fixed income securities in the newest blog article.

We all know that the Fed will be making the decision to increase rates at a point in time they deem to be most appropriate, and this is why you should position your investments before they even make that initial move. Feel free to contact us with any questions or for more information on putting a strategy in place at (631) 952-4466 x12. Be sure to check to check out the most recent Mitlin Minute on interest rates. Don’t wait until after the fact and let Mitlin Financial help you facilitate a game plan to best prepare you for the impending rise in interest rates.

 

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Tax Time Tips

It is that time of year again, tax season. As personal tax returns are due April 15th, it is very common for inpiduals to file their returns at the last minute. This procrastination tends to only exacerbate the stress associated with this time of year. Fortunately, there are many good habits and practices one can follow. It is important to note that although this article contains no tax or legal advice, there are quite a few tips which you may find helpful. There are many strategies one can implement to help alleviate this stress of tax season.

First and foremost, your tax return should be prepared and filed by a qualified tax professional. Although it’s very ambitious to file your own return, the experience and knowledge a tax professional can offer can prove to be invaluable.

Do it yourself tax preparation software is not the answer. It is in your best interest to hire someone who will prepare and file your return with the utmost professionalism, skill and care. Filing a return can get very complicated. The professional you choose should make sure you are maximizing your tax deductions. It is their job to be cognizant of any and all deductions that may be applicable to you. This is why it is crucial to have someone with experience oversee your tax planning.

A CPA can help to give you the inpidual attention needed to assess and monitor your situation. Hiring the right tax advisor should provide peace of mind. This is the foundation for a successful tax season.

In addition to retaining an experienced professional, it is just as important to be organized year-round. This does not mean scrambling to get all of your financial documentation in order the week of April 15th. This means maintaining organized records and copies of all your financial statements, papers and documents as you receive them throughout the year. By being proactive throughout the year, the meeting with your CPA will be that much more efficient when it comes time to file your return.

Your financial professional can assist greatly during this organizational process. They can help provide you with all necessary investment documentation and statements which you will need to provide to your accountant. If possible, it is a great idea to have your accountant coordinate with your financial professional in order to achieve efficiency and maximize productivity.

Being proactive is a very important strategy. As it is intertwined with being organized year-round, preparing your tax return before the deadline is crucial. This will leave you with the sufficient time needed to address and correct any errors or issues that may need to be addressed. If you procrastinate and file the week of, you forego this time to review and ensure that everything is correct. Not to mention, you may also come to realize opportunities for tax deductions that may have been overlooked.

We would even recommend having a tax planning meeting with your tax advisor towards the end of October. This will give you time to get a proper understanding of your tax situation for the year. In addition, this information may be helpful in making financial decisions for the remainder of the year.

If you are looking for a CPA to help prepare your taxes, we may be able to recommend someone that is a good fit for you. Also, be sure to watch the latest Mitlin Minute on tax time tips. For more information contact us at (631) 952-4466 x12 and learn how Mitlin Financial can help you find the right tax professional for you and your family.

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Long Term Care Insurance

What will you do if you are unable to perform even the simplest daily living activities? Will you inconvenience your family and friends with the burden of caring for you? Will you be able to afford the high costs associated with elder care or assisted living? What about an alternative option that could mitigate the inconveniences to your family and friends as well as limit the financial impact that would result from high health care and living costs.

A long term care policy can protect against the risk of large out of pocket costs associated with long term health care needs and living expenses. Inpiduals when unable to perform the basic activities such as such as dressing, bathing, eating and toileting may benefit from long term care coverage. Many times referred to as LTC, this type of coverage provides nursing-home care, home-health care and personal or adult day care for inpiduals.

Like traditional insurance, the insured makes premium payments. Policyholders should be aware that premiums can increase over time but only when they are increased for an entire class of policyholders; this increase is not on an inpidual basis. Additionally, the insured elects a benefit period. This is the period of time that they will receive the benefits. Throughout the elected benefit period, they will receive either daily or monthly benefit payments to help fund their long term care costs.

An elimination period exists with LTC coverage. This is the number of days that the insured must pay for their own care. Once this period has elapsed, the benefit payments begin. The elimination period for LTC tends to range from 30 to 180 days.

Each LTC policy is unique to the insured’s specific circumstances and financial needs. Most LTC policies are reimbursement plans. This means that the insured pays their own bills and all eligible expenses are reimbursed by the insurance company. Although more expensive, indemnity plans exist where the full daily or monthly benefit amount is paid directly by the insurance company to the LTC provider.

There are many financial benefits associated with long term care insurance. A LTC policy can maintain one's financial independence from their family and friends. This type of coverage can also help protect one’s assets. Funding long term care costs through insurance coverage can alleviate the financial stress associated with high long term care costs. It can also reduce the need to dip into your assets.

With the rising costs in health care, long term care coverage can help to alleviate financial stress later on in life when you may need it most. This type of coverage can be essential to your overall financial planning strategy as it can mitigate the risk of this critical financial event. If you or a loved one are considering or believe long term care insurance is suitable for you, call us at (631) 952-4466 x12 and properly educate yourself on LTC. Also, be sure to check out the latest Mitlin Minute which talks more about LTC and its benefits.


Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Disability Insurance

What if the unexpected were to happen and suddenly, you were no longer able to work? What if unanticipated illness or injury were to impede your ability to provide for you and your family? Not only would you have the stress of affording everyday living expenses, but you may also have to place long sought-after financial goals on hold. However, what if there was a proactive strategy that could protect you and your family against the unpredictable risk of losing your main source of income? The proper amount of disability coverage can help mitigate the potential shortfall in income should an unexpected accident or ailment render you incapable of working.

Disability insurance, often called DI, is a form of insurance that protects the insured’s income against the risk of disability. DI policies have what’s known as an elimination period or waiting period. This is the period of time between the time of injury (when one becomes disabled) and the commencement of benefits. The waiting period is often 90 days, however, policy owners can usually elect to adjust the length of the waiting period. As waiting periods are altered, the premium charges are as well. There is an inverse relationship between the waiting period length and the premium size. The two main types of long-term disability insurance include inpidual disability insurance and group disability insurance.

Inpidual disability insurance is a policy type that could work best for self-employed, or employees working for an employer that does not provide long-term disability benefits. Inpidual policies work well for people who may not have enough coverage through their employer and want more protection. Disability policies will vary considerably amongst insurance carriers, employers, occupations and industries. It is important to find an insurer that is a good match for your needs.

Policies with a longer coverage period and higher benefit payments tend to have higher premiums compared to that of a policy containing shorter coverage periods and lower benefits. An advantage associated with inpidual disability benefits include its tax free nature. Disability benefits will be considered tax free income if the premiums are paid with personal, after tax monies. Additionally an inpidual policy is portable. Should you change employers at some point, you have the ability to keep your inpidual policy. Your coverage can increase as your income increases as long as you purchase the appropriate rider(s).

Far different from inpidual disability policies are group disability policies. Group disability policies are typically offered through your employer. There is no health underwriting associated with group coverage, as an employee’s health is not assessed on an inpidual basis. The health rating is actually determined on the group level, as a single unit. This policy type has benefits that will kick in after the stated elimination period, which tends to vary amongst employers. Long-term coverage can have benefit periods of 2, 5 and 10 years. There are also the options of “until age 65” coverage and of course, lifetime coverage. Group coverage can be a tax deductible expense to the business. It can also help the employer entice and retain quality employees.

Disability coverage can serve as an integral component of your financial plan. Although disability may not be as devastating as death, the additional protection provided by DI can help mitigate the irreparable financial damage that one’s inability to work can cause. With the ability to protect both you and your family against an unexpected shortfall in income, DI can equip hard-working inpiduals with a sense of peace of mind. Disability insurance is a strategy that many in the work force tend to overlook. Your greatest asset is not your residence nor your pension, but rather your human capital. Your ability to participate in the workforce and produce annual income over the course of your lifetime is your most valuable asset; and disability insurance helps provide the ultimate protection for that asset.

Do right by all the hard work you have done and the effort you continue to put forth by giving us a call today at (631) 952-4466 x12. We can further educate you on disability insurance and help you find a policy that fits your circumstances. Be sure to visit our website at Mitlinfinancial.com and watch the most recent Mitlin Minute on disability insurance.

Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

Life Insurance

How would your family survive if you were to unexpectedly pass? Would their standard of living and quality of life diminish? Who would generate the shortfall in income if you were no longer around to earning a living? Will your loved ones be able to afford all the costs associated with your passing, such as estate taxes, funeral expenses and burial services? Although it is a tough concept to wrap one’s head around, these are just some of the questions that would need to be answered if an unexpected critical financial event, such as death, were to transpire. In addition to the insulation from financial devastation provided by these income replacing vehicles, other applications such as estate planning is another inherent use of life insurance. While various types of policies offer different benefits, each performs the same vital function; to provide a measure of security and a financial safety-net for your family and loved ones, should a critical financial event ensue.

What exactly is Life Insurance? It is the protection against the shortfall of income that would result from the passing of the insured. The named beneficiary would receive the proceeds, tax free, in the form of the death benefit. This tax free death benefit functions as a safeguard from the devastating financial impact resulting from the death of the insured. While all Life Insurance policies provide this death benefit, there are four main types. Each one operates in a different capacity in order to accommodate one’s specific circumstances. The main types of Life Insurance policies are Term Life, Whole Life, Universal Life and Variable Universal Life Insurance.

The most basic type of life insurance is Term. The policy is written for a specific term. If the insured dies within that stated term, the insurance company must then pay the death benefit to the named beneficiary, tax free. The insurance coverage will end when the term ends. The premiums for term insurance tend to be the lowest compared to the other different types of life insurance. Unless it is a level term contract, the premium amounts will increase as the age of the insured increases. Term insurance would serve the greatest benefit to someone who only needed the death benefit for a certain period of time. What about a policy that won’t leave you guessing how long of a timeframe you may need it for?

Whole-Life will last for the entire life of the insured; thus the death benefit is guaranteed. Although the premiums tend to be significantly higher with a Whole-Life policy, there is one added benefit that is not seen with a Term policy. The policy has the ability to build cash value. The differential between the premium amount and the cost of the insurance itself is placed into what is known as a cash-value account. The account feature enables the insured to borrow from the accrued cash-value.

Although Universal Life also grants the insured lifetime coverage, there is some added flexibility seen with this type of insurance. A Universal Life policy is similar to a Whole Life policy, however, the policy owner has the ability to change both the premium and death benefit. Like Whole Life, the Universal policy has a general account that also has the ability to accumulate cash-value. Another variation of Universal Life is Variable Universal Life.

The major difference between Universal and Variable Universal Life is seen with the way which the general account is invested. With the Variable Universal Life, more risk is taken on by the policy holder, as the general account tends to be invested in stock, bond and other various sub-accounts, as directed by the policy owner. Someone who wants life coverage and can tolerate a higher risk level may be most interested in a Variable Universal Life policy.

Another very common application of life insurance is seen within estate planning. Life insurance is present in many estate plans and can serve as a source of support, education-expense coverage and a means to fund business buy-sell agreements. Additionally, upon the death of the insured, the deceased’s loved ones would soon become responsible for paying the estate taxes (Death Tax). The death benefit from the life insurance contract is a great source of added liquidity. The monies from the tax free death benefit can be used to pay the death tax. This use of life insurance can help to alleviate a great deal of unnecessary financial pressure and stress during a family’s time of grieving.

Life insurance has been known to serve as an elemental means of protection with regard to dealing with devastating critical financial events. With any of the many policies listed above, the insured and their family may feel peace of mind. Life insurance may be a great tool in allowing their family and loved ones to maintain their standard of living and potentially not fall victim to many of the detrimental expenses associated with critical financial events.

Be sure to check out the latest Mitlin Minute on life insurance! Contact MitlinFinancial, Inc. today at (631) 952-4466 x12 and learn about the applications of life insurance and the ways you can best insulate your loved ones from critical financial events.


Disclaimer: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.

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