Financial Answers "IN SIMPLE LANGUAGE"

I have recently had numerous requests for more information on Long Term Care Insurance.  With the recent passage of the health care reform bill, long term care and long term care insurance has been brought into the spotlight again.  And I am glad that it has.

For those of you who have been following In Simple Language for the last couple of years, you will probably remember that I am a big proponent of long term care insurance.  I feel it is a very important part of a person’s “financial plan” that is often overlooked or ignored. 

Since I have had personal experience with long term care issues because of my brother’s health problems before he died in January 2009, I have felt even more strongly than ever that everyone needs to learn more about long term care and long term care insurance.

Your CLASS Act:  Community Living Assistance Services and Supports Act of 2009

As usual, our congress has created confusion when trying to get information out to the public about certain topics.  Trying to research this topic was confusing because there are two CLASS Acts of 2009.  One is the College Learning Access Simplicity and Savings Act of 2009 and the other is the Community Living Assistance Services and Supports Act of 2009…both “CLASS” Acts.  We will be discussing the latter.

What this act offers is a voluntary payroll deduction from workers to fund future long term care needs.  If you allow your employer to withhold an amount of “premium” from your paycheck- just as they do now for social security and Medicare-you will be enrolled in the government’s long term care insurance program.

I am not certain at this time if this is a good idea or not.  On the surface it seems like a good idea.  All of us at one time or another will face long term care needs for ourselves or someone we know.  That is just a fact of life and especially when growing older.  Then there are the people who will need long term care, regardless of age, because of some accident or illness in their life. 

The Pros and Cons of CLASS

Because of my experience with long term care needs in my family and the past 15 years being involved in educating, promoting, and selling long term care insurance-although I do not sell any financial or insurance products any longer-I think it is a good idea to provide all Americans with the option of providing for their long term care needs whenever they arise. 

This act only provides bare bones amounts of coverage for minimal employee cost but I think it is a good start towards people providing for their eventual long term care needs.  There would be a minimum of hassle with paperwork and the premium payments would be automatically taken from each employee’s paycheck so you wouldn’t have to worry about missing a payment.

What I don’t like about this program is the government having another of its hands in my pocket.  I am required to pay into the miserably failing social security system and the incredibly complex and barely functioning Medicare system.  Now the government wants to add another layer of withdrawals to your already diminishing paycheck.  And they will control and monitor it just like they have controlled and monitored the social security and Medicare system.  This is the part that scares me.

Right now the act says that paying into the long term care proposed system is voluntary.  When did the government, any government whether it was federal, state or local, not turn a voluntary withdrawal system from an employee’s paycheck into a permanent, required withdrawal.  If you don’t believe me ask those people that had their states put in a “temporary” state income tax or cities with “temporary” city taxes.

Once the bureaucrats get their hands on your money they just can’t seem to let go.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

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Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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In Simple Language has been recently writing about the new financial reform bill called the “Restoring American Financial Stability Act of 2010” (see In Simple Language blog articles dated April 7, 2010 titled Do We Really Need More of This? And June 2, 2010 titled Financial Reform Bill passes the Senate.  Now What?).

Senator Chris Dodd is the lead senator in getting this bill through congress.  He and many other senators and representatives are pushing hard to get this financial reform bill passed to help prevent another financial meltdown of what took place in 2008 and 2009.

Let’s dig deeper into this bill

Something that has not been discussed about this bill is its implications to its sponsors…the senators and representatives pushing it.  If we did deeper into why these members of congress are trying to pass this bill we have to wonder are they just doing their jobs or do they, or at least some of them, have an ulterior motive for wanting this bill passed.

If we look at some of the senators and representatives that are pushing this bill we find that they have many financial connections to the very organizations that they are going to more heavily regulate.  So you ask is that such a bad thing?  Good question. Let’s discuss it further because it does directly affect you.

Let’s ask some tough questions

Should you be concerned if certain senators and representatives or their spouses sit on the boards of many of these financial companies that will fall under this new bill?  And if so, does the bill really address the needs of the public or is it something that is going to benefit the senators and representatives and their spouses?

If you do your homework you will find out that many of these senators and representatives have ownership interests in financial companies.  Many own a large portion of voting stock.  Many sit on the boards or their spouses sit on the boards.  Is that really a problem?  Does it really matter if their wife or husband sits on the board of a financial services company?  Is that a conflict of interest if it is disclosed or not disclosed?  Should these senators and representatives not be directly involved in the writing of this financial services bill?

You could go on and on with questions but does it really matter?  You voted for and sent these people to Washington, D. C. to represent you fairly and honestly. If they don’t then you need to vote them out now.   Where do you draw the line to know if they are, in fact, doing a fair and honest job especially when it comes to protecting your money?  Only you can answer that.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.

• Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
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 Thank you for taking the time to visit In Simple Language.   

Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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Just when you think that congress is trying to do justice by the American people some congressional idiot for some unknown underlying reason wants to stick it to you and me once again.

This time Senator Max Baucus, D-Montana has come up with his own reasons why he wants to eliminate an important part of the recent legislation called the “American Jobs and Closing Tax Loopholes Act or H.R. 4213.  By the way if you go to YouTube and look up Senator Baucus there is a video of him speaking on the Senate floor where he appears to be “drunk”.  I watched it and something is definitely strange about his speaking.  You be the judge.

So what am I talking about?  Let’s take a look at some of the legislation flying around congress lately.

401(k) Fair Disclosure and Pension Security Act

Last year, 2009, U. S. Representative George Miller, D-CA authored a piece of legislation called the 401(k) Fair Disclosure and Pension Security Act.  One of the key provisions of this act was the full and fair disclosure of all fees being charged to you in your 401(k) plan at work.  Here is part of what the act included:

• Require 401(k) plans to disclose fees in one dollar figure taken from participants accounts in a worker’s quarterly statement;
• Require 401(k) service providers and plan administrators to disclose fees charged on 401(k) plans broken down into four categories: administrative fees, investment management fees, transaction fees, and other fees

There are approximately 50 million Americans who have 401(k) plans today.  All of these Americans are trying to secure their retirements by taking advantage of their 401(k) plans.  That is a great idea and we should applaud each and every one of these Americans who are trying to secure their retirement years.

Now here is where the potential conflict begins.  But first let me ask you a question.  Would you buy a house if you didn’t know what it was actually going to cost you?  Wouldn’t you want to know all of the expenses involved?  This is usually your largest expense so you would get a breakdown of all the expenses involved…right?

When you go out to purchase an automobile don’t you want to know what it is going to cost you to buy that automobile…including taxes, monthly payment, fuel costs etc?  Sure you do!

So why is there a problem, with probably your third largest investment, which in many cases turns out to be your largest investment over time, your 401(k) plan?  Why are the expenses you have to pay for your 401(k) plan not required to be disclosed?  What’s going on here?

American Jobs and Closing Loopholes Act

The American Jobs and Closing Tax Loopholes Act include provisions to:

• Promote American job creation
• Provide relief for working families
• Prevent the outsourcing of American jobs
• Close tax loopholes
• Ensure corporate accountability
• Maintain access to affordable health care

Doesn’t ensure corporate accountability include disclosing the expenses you have to pay to have your 401(k) plan.  Yet, Senator Max Baucus has introduced proposed changes that would eliminate the disclosure of these fees.  Why?  My guess is the “big money financial lobbyists” got to him. Maybe they bought him a case of single malt whiskey?   Nothing else makes any sense.

A congressperson’s job, who is elected by the people, is to represent those people or constituents. So how is Baucus’s proposal representing the best interests of you?  Isn’t this the same old politics we, as Americans, have come to despise?

Senator Baucus, you work for the American people and we want, no demand, that you explain yourself.  You are keenly aware of your other long time old school politicians who were recently defeated for re-election.  You could be next!

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

• Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
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Thank you for taking the time to visit In Simple Language. 

Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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It seems that someone in Washington, D. C. has finally woken up.  For years everyone has been talking about how under educated all Americans are when it comes to their basic financial knowledge.  Well, finally someone is trying to do something about it that has the “power” to actually get something done.

Let’s hear it for Representative Michael N. Castle (R-Del.)

This is definitely a step in the right direction.  I commend Representative Castle for taking the bull by the horns and actually putting into action all of the meaningless “less educate the public” talk over the years from his colleagues in congress. 

In Simple Language was specifically created to try to fill part of the void in the United States regarding the lack of basic financial knowledge…so we are excited to see this action being taken by a member of congress.  What are we so excited about?

Financial Education in the Classroom Act of 2010

H.R. 5165 called the “Financial Education in the Classroom Act of 2010” introduced to congress on April 28, 2010 is a house bill designed to and I quote from the bill, “The purpose is to promote and carry out economic and financial literacy among all students in kindergarten through grade 12 by awarding competitive grants to state educational agencies to improve the quality of student understanding of personal finance and economics”.

Finally someone in our government has woken to the fact that you can’t have a financially literate society if you don’t start building it from its very foundations…kindergarten through grade 12.

Will this bill solve all of America’s financial literacy problems?  Absolutely not. But it is a step in the right direction.  It will hopefully get the ball rolling.

Here are the proposed goals of this bill

These goals are taken word for word from H.R. 5165:

1. To increase students’ knowledge of, and achievement in, economics and financial literacy to enable the students to become more productive and informed citizens.
2. To strengthen teachers’ understanding of, and competency in, economics and personal finance to enable the teachers to increase student mastery of economic and financial education principles and the practical application of those principles.
3. To assist state educational agencies in measuring the impact of education and personal finances.
4. To encourage economic and financial education research and development, disseminate effective instructional materials, and promote replication of best practices and exemplary programs that foster economic and financial literacy.
5. To leverage and expand private and public support for economic education partnerships at national, state, and local levels.

In Simple Language will be following this bill very closely.  As you all may remember, In Simple Language does not sell any investment products nor is it affiliated with any financial companies therefore we can be totally unbiased when discussing financial matters.  This is the perfect platform for someone to say, “Hey, In Simple Language how can you help with this bill?”  We will be waiting to see what happens.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

• Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
•  Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
•  Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
• Did you remember to bookmark this blog?

 Thank you for taking the time to visit In Simple Language. 

Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

Check out the “SERVICES” tab above the beginning of the post for all available services.

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I would really appreciate it if you would let me know how In Simple Language’s blog articles have helped you in your financial matters or whatever else you may think relevant.  This will help me continue to bring you quality information and timely blog articles.  Any constructive ideas, comments, or suggestions are always welcome.

Thank You,

Rich

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