Are you underinsured, or not insured at all?

When was the last time you looked at your life insurance coverage?

Why not do it now? Life insurance can be a remarkable utility as an estate planning and tax-saving tool. Whether you have no life insurance, or you haven’t reviewed your policy in a while, it is always a good idea to be aware of your options and be prepared.

About 40% of Americans have no life insurance.

LIMRA, an insurance industry group analyzing insurance trends in the U.S., recently found that among men and women, ownership of life insurance policies has hit its lowest level since 2004. LIMRA’s study shows 39% of men without even term life coverage, and 43% of women in the same boat.1

Alarmingly, the population of married men aged 35-54 who had life insurance dropped more than 10% from 2004-10. Men who fall into this age bracket are usually in or near their peak earning years, and about half of them are fathers.1

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Your household may want to budget by the 50/20/30 rule: 50% of take-home pay assigned to fixed monthly costs, 20% to saving/investing, and 30% to flexible consumer expenses.

HURRICANES HURT SEPTEMBER JOB NUMBERS

For the first time in seven years, the economy went a month without payroll growth. The Department of Labor’s September employment report revealed the impact of Hurricanes Harvey and Irma: it showed 33,000 fewer people working. Average hourly wages rose 0.5% to take the annualized gain to 2.9%, but this may have been an effect of the net loss of 105,000 lower-paying bar and restaurant jobs. In a statistical fluke, the headline jobless rate fell to 4.2%, and the U-6 rate, counting the underemployed, declined to 8.3%, even as slightly more Americans looked for work.¹  

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When a grandparent, relative or friend of the family pays for a child’s medical expenses that are not covered by insurance, direct payments to doctors for such costs are not considered gifts to the child and do not count against the annual gift tax exclusion amount (currently $14,000).

PERSONAL SPENDING BARELY IMPROVES

Consumer spending increased by only a seasonally adjusted 0.1% in August, while consumer incomes rose 0.2%. Those gains precisely matched the projections of economists surveyed by the Wall Street Journal. Factoring in inflation, household spending actually retreated 0.1% during August. Hurricane Harvey may be partly to blame for these numbers.¹

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Are your antiques and collectibles worth more than they used to be? Their current value should be accurately stated on your homeowner insurance policy. Otherwise, an insurer may not reimburse you for their full value if they are lost or damaged.

FEDERAL RESERVE: UNWINDING WILL BE GRADUAL

Last Wednesday, the country’s central bank detailed how it would shrink its mammoth balance sheet. During the fourth quarter, the Fed will unload $10 billion of maturing bonds per month; in each subsequent quarter, the monthly runoff will increase by $10 billion until reaching a limit of $50 billion. Fed chair Janet Yellen said that this schedule is set in stone, barring a “sufficiently great” economic threat. The Fed made no interest rate move last week, but 12 of 16 Fed officials do project a hike before 2017 ends.¹

Have you been affected? If so, how can you try to protect yourself?

On September 7, credit reporting agency Equifax dropped a consumer bombshell. It revealed that cybercriminals had gained access to the personal information of as many as 143 million Americans between May and July – about 44% of the U.S. population. The culprits were able to retrieve roughly 209,000 credit card numbers, in addition to many Social Security and driver’s license numbers.1

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In retirement, arranging income distributions with an eye on tax efficiency could help your savings last longer. Smaller, tax-deferred account distributions will make your annual income taxes more bearable.

SUMMER SLOWDOWN HITS HOUSING MARKET

Low inventory and high prices are taking a toll on existing home sales. They declined 1.3% in July, according to the National Association of Realtors, making a second straight monthly retreat. In the past 12 months, the number of existing homes on the market has shrunk 9.0%, while the median sale price has risen 6.2% to $258,300. While resales were up 2.1% year-over-year, the seasonally adjusted annual sales rate reached a 2017 low in July. Census Bureau data showed new home sales falling 9.4% last month.^1,2

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Business owners should dedicate one hour per month to collect and sort receipts. This is vital for independent contractors, whose tax liability is linked to the expenses they deduct.

Wise money moves for parents under 40.

As you start a family, you start to think about certain financial matters. Before you became a mom or dad, you may not have thought about them much, but so much changes when you have kids.

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The investment markets experience cycles, and the major indices inevitably see downturns at some point. If you are focused on long-term performance, the good news is that the markets have the potential to rebound in reasonable time. If your portfolio is diversified, that may provide you with some insulation in a correction.

TAME INFLATION PERSISTS

Can the Federal Reserve justify another interest rate hike in the second half of 2017? Given weak inflation pressure, maybe not. The central bank has set a 2% yearly inflation target, but the Consumer Price Index rose only 0.1% in July, resulting in a 1.7% year-over-year gain. Core consumer prices rose 0.1% for a fourth consecutive month in July, so annualized core inflation was also at 1.7%. The Producer Price Index fell 0.1% last month; analysts polled by Briefing.com expected a 0.2% rise.^1,2

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If you are in your twenties, saving should be your top financial goal: saving for emergencies, for investment, and for retirement.

LATEST JOBS REPORT BRINGS GOOD NEWS

U.S. payrolls swelled with 209,000 net new workers in July, according to the Department of Labor. That beat the 183,000 estimate by analysts surveyed by Reuters. About 53,000 of the hires were at restaurants and bars, with another 49,000 in the professional and business services category. While yearly wage growth remained at 2.5%, the headline jobless rate ticked back down to 4.3%. The U-6 rate (which includes the underemployed) stayed at 8.6%.¹