A Warm “Thank You” For a Stellar Year

We’ve had a great year here at Sterling Financial, and things are only set to get better. In 2012, we watched our company grow despite uncertain economic times, and we’ve accomplished more than any of us could have predicted. And believe us when we say we know exactly who to thank for our success—you.

We appreciate the trust you’ve given us, and value the partnerships we’ve made with each and every one of you. You’ve granted us the privilege of guiding your financial future, and nothing makes us happier than watching you succeed right along with us. 

We’d like to wish all of you a delightful holiday season, as well as invite you to drop by our new office next year, starting January 16. The address is:

Happy holidays to all, and here’s to another sterling year!

Long-Term Care Could Be in the Cards: Have You Planned for It?

Think Medicare or health insurance will have your back if you need long-term medical services? Think again. If you require assisted living or hospice care in old age or sickness, you won’t have help paying for it unless you plan accordingly. Same goes if you’re still able to live at home, but need an aide or nurse to help with daily life.

Long-term care is far from cheap, and can deplete the savings that you’d hoped to leave to your loved ones. Many don’t think to plan for such services, which may be needed for months or longer. Unfortunately, some people are left liquidating assets in their final years to pay for long-term care.

People are living longer these days, which ups the odds of chronic illness or frailty. The good news is that you can invest in long-term care insurance to help protect your bank account in these situations. For example, a defined-period policy covers your care for a specific time period: anywhere from 30 days to a year, or even until death. There are also pool-of-money policies that cover you up to a certain dollar amount and even return your money if you don't end up using the services.

Given the steep price tag of long-term care, it makes financial sense to meet with a financial planner. They can help you determine what solution works best for your specific situation and help you make an informed decision that will protect your assets in old age.

In Retirement Planning, the Early Bird Gets the Juiciest Worm

You probably know by now that ignoring something doesn’t make it go away. This is especially true with retirement planning—and this is one area where procrastination doesn’t pay, literally. The sooner you start investing for retirement, the more your money will multiply.

You see, your invested money goes through something called compound interest. So putting away a small amount now can add up to serious cash by age 65, whereas investing a large amount later on may be far less lucrative. 

Imagine your best friend, the same age as you, invested $3,000 a year for 10 years, stopping at age 34 but does not withdraw the accumulation until age 65. The next year, you started investing the same amount, and continued for 30 years until retirement age to withdraw at 65 as well. You both made an 8-percent annual return. However, he earned $102,300 more than you—even though you invested more than triple what he did. Fair or not, he allowed his investment to compound for more periods, so his small investment yielded big bucks in the long haul.

The lesson here is that you’re never too young to invest for retirement—and starting now could be one of the smartest financial decisions of your life. 

How to Find the Best Insurance Company

Fortunately, there are rating agencies out there to dig up the financial details of insurers. 

A.M. Best is the most established of these, providing detailed reports along with financial-strength rankings. 

Moody’s Investors Service also offers credit ratings and risk analyses, while Standard & Poor’s Corporation ranks claims-paying ability as well as qualified solvency. 

Fitch Investors Service is another reputable source for credit opinions.

Do your research now to build a lasting relationship with a strong insurance company you and your family can feel good about. 

Estate Planning: Not just for the ├╝ber wealthy crowd

If you don’t have a estate plan, you lose all say in what happens to your money and property after death. Without the right strategy, loved ones may spend years in probate court, fighting for the funds that you always meant for them to keep. 

Estate planning distributes your estate as you see fit while minimizing taxes and other costs, such as attorney fees. It also provides liquidity to cover final health care and funeral expenses. With the maximum estate tax at 35 percent with an exemption of $5.12M—and set to skyrocket to 55 percent in 2013 with an exemption of $1M—it takes a smart strategy to ensure that spouses, children and other relatives receive their fair share.

This change in exemption means many more families will face higher taxes. The exemption equals the amount you can transfer to your kids without any taxes—and since far more people have $1M than $5.12M in assets, the estate tax will soon affect a greater number of people.

In a nutshell, a solid plan is your key to maintaining control of your legacy, even when you’re no longer around.

Want a Comfortable Retirement? Don’t Count on Social Security.

Sure, it’s nice to cash checks from Uncle Sam long after you’ve hung your work clothes up for good. But don’t expect to live well unless you’ve got some nuts squirreled away. Most retirees need 70 to 80 percent of their pre-retirement income to maintain their standard of living. Unfortunately, Social Security benefits only amount to 56 percent for low-income earners, and a mere 42 percent for those in the mid-range. With a high income, you can expect about a third of your former salary. Not quite enough for that trip around the world—or basic living expenses, in many cases.

The Social Security Administration provides a safety net to keep you off of the streets. Dishing out retirement checks, disability benefits, Medicare and aid for family members, the organization works to ensure that your BASIC welfare needs are met. But if you want to maintain your current lifestyle and enjoy your golden years without financial stress, don’t put all your eggs into the Social Security basket.

Planning for the Future

Retirement and insurance planning can help secure your family’s financial future, yet many people don’t thoroughly understand how to use these powerful tools. That’s why we’re starting a blog to educate you on how to invest now for comfort down the road.

To be successful at most things in life, you need a game plan. This is especially true when it comes to preparing for future living costs. Once you are no longer working, how do you expect to pay your bills? What lifestyle standards do you wish to maintain? You may want to keep a safe and spacious home, travel the world, provide for your children and grandchildren and cover unexpected expenses. With retirement planning, you can work towards these goals with confidence.

You probably know how costly health care is these days—a single hospital stay can bankrupt some families, so a good Medicare strategy is vital. Disability insurance can replace your income, guarding your assets should you have a serious accident or sickness. Beyond health, insurance can even provide compensation to your loved ones in case the unthinkable happens.

Our aim is to take the mystery out of retirement and insurance planning, to help you on the path to financial peace of mind.