In order to create a secure retirement plan, a little flexibility is needed. Often people think a retirement plan needs to be strict and rigid, which they can be, however, developing a flexible plan allows you to live comfortably and securely without the unnecessary     restrictions.

Using annuities can be a great way to create a flexible retirement plan. Using careful consideration of your financial goals, risk tolerance, and your personal retirement timeline, you can develop a retirement plan that meets your needs and gives you the freedom to enjoy your post-working years.

An annuity is a financial product offered by insurance companies that provides regular payments over a specific period of time.

The first step is to assess your retirement needs and goals. This means estimating your retirement expenses and   determining your expected retirement age and the length of time you’ll need income. You’ll also need to evaluate how much risk you’re willing to take. (This can help determine which type of annuity will work best for you).

Annuities offer flexibility through their different options. There are Immediate or Deferred annuities, Fixed or   Variable annuities, and Indexed annuities. Each provides unique options allowing you to choose something that aligns with your retirement goals and risk tolerance.

Annuities also offer additional features and riders that allow you to support the flexible and secure retirement you’re planning for. They offer options like Guaranteed Minimum Income Benefit which provides a minimum income amount regardless of market performance, Long-Term Care  Riders which allow you to use annuit funds to cover long-term care expenses if needed, and Death Benefit Riders which guarantees that your beneficiary receives a certain minimum amount if you pass away before receiving all annuity payments.

An annuity can be part of a diversified retirement strategy that includes other investments like stocks, bonds, and savings accounts. This diversity helps you manage your risk and optimize returns over time giving you better flexibility and security.

Remember, flexibility does not mean unstable. Instead, it can provide more stability, giving you options. Using  multiple annuities in succession can give you this desired workability along with a reliable income.

A new epidemic is spreading across our country, fueled by inflation, credit cards, and “buy now pay later” options for almost all online purchases. This seemingly  invisible epidemic is spreading at an alarming rate. Have you guessed it? Consumer debt.

Our country is racked with debt. So far, in 2024, the average personal debt increased from $21,800 to $22,713. About 13% of that comes from auto loans, but over 28% comes from credit card debt. Only about 23% of American’s are debt free, and about 65% of American’s say they are living paycheck to paycheck, an increase from last year which was about 58% of Americans. It’s becoming more important than ever to pay off debt and stay out of debt.

When tackling your debt you need to have a plan. There are many strategies for paying down debt; one of the more popular methods is the avalanche method. With this strategy, you focus on paying off the debt with the highest interest rate first, while making minimum payments on all other debts. Unlike the snowball method, which focuses on paying off the smallest debt first and working your way up through your debt with increased payments, the avalanche method aims to minimize the overall interest you pay overtime, resulting in significant savings over the long term while simultaneously paying down your debts. Like the snowball method, once you pay off a debt, that payment is then applied to the next debt in line.

For an example: if you have three debts- a credit card balance with a 15% interest rate, an auto loan with a 6% interest rate, and a personal loan with a 4% interest rate, you would prioritize the credit card debt first and aggressively pay it down first. Once paid off, you would move on to the auto loan, then the personal loan, following the order of the interest rates.

A downside with the avalanche method is it can take more time to see results, especially if your highest interest rate debt is substantial. This can be  discouraging. If you are the type of person that needs to see immediate results to stay motivated, it may be more advantageous to use the snowball method or some other method of paying down debt.

The avalanche method provides a way to organize and prioritize debts while saving you money in the long run. It can empower individuals to take control of their finances. However you choose to manage and eliminate your debt, the critical thing is to start and do. Take the time to go over your budget, list all your debts, and decide what method will work best for you and your situation. Overcoming debt will help your own personal economy flourish, which will then help   bolster your own community, helping bit by bit to overcome the debt epidemic. 

People always ask me where the interest rates are  going. If I knew that, I’d be living on an ivory tower some place making millions. That fact is companies and experts can try and predict, or forecast, where interest rates will go, but there is no way to tell for sure. There are many factors that determine what the interest rate will be including things like Central Bank policy, inflation expectations, national economic conditions, global economic conditions, as well as many other things.

Interest rates are essentially the cost of borrowing money or the rate of  return on investments for lending  money. When you take out a loan you typically pay back more than what you borrowed. That additional amount is the interest. Interest rates are expressed as a percentage of the total amount of borrowed money. These could be fixed rates (meaning they stay the same over the life of the loan) or variable rates (meaning the rate changes based on market conditions). Central banks, like the Federal Reserve, set benchmark interest rates, which influences the rates at which banks lend to each other. Changes in benchmark rates ripple through the economy and affect borrowing and  lending rates for consumers and businesses.

On May 1, 2024, the Federal Reserve made the decision to keep its benchmark rate unchanged. The federal funds rate is the interest rate that banks lend or borrow funds from each other overnight to meet reserve requirements or manage their short-term liquidity needs. When the Fed lowers interest rates, it means that it reduces the target range for the federal funds rate. This latest decision by the Fed is the sixth consecutive in which they have kept its policy rate steady between 5.25% and 5.5%. Rates have not moved since the start of 2024 after eleven rate hikes between 2022 and 2023.

Interest rates can act like a barometer, giving us an idea of how the economy is performing. In an effort to stabilize the economy, the Federal government will adjust the prime interest rate. If the economy is performing well, interest rates will typically be higher, but when there is an economic slowdown, interest rates will come down to stimulate consumer spending and economic growth.

It’s important to understand how interest rates affect your personal financial   economy as well as your community. Interest rates play a crucial role in the financial landscape of our nation and influence everything from the cost of borrowing money to the return on your investments. Whether it’s interest you pay on an auto loan or home mortgage, or interest you earn on your investments, you should always be aware of the interest rates that affect you. Interest rates play a critical role in our lives and are something we should always take an interest in.

2024 has undoubtedly been a newsworthy year, and we’re only one quarter through! Between the shouts of wars and cries for cease fire, attacks on shipping vessels, thundering earthquakes, the crash and splash of a massive bridge collapsing, the excitement of a solar eclipse, not to mention all the political noise of an election year it can be hard to focus on what’s going on in our country. Through it all, a steady pulse can be felt, the heartbeat of America- Small Businesses. Much like our own human hearts, most people don’t think about the steady thrum of these individual businesses, yet they work on, keeping the body of our economy alive.

According to SBA Office of Advocacy, small businesses have accounted for over 40% of our GDP over the last few decades. They contribute significantly to our local economies, circulating revenue and supporting other local businesses, which is vital to keeping our economy healthy. Small businesses help to stabilize our economy. These enterprises provide employment opportunities within our communities and bring creativity, and more competition to the marketplace. New and innovative ideas often come from small businesses, helping to drive our economy forward. Small businesses help to knit our communities together.

The U.S. Chamber of Commerce reports that there were 12.9 million jobs created by small businesses between 1996 and 2021, an average of 516,000 a year. After the pandemic we saw a surge, 5.5 million jobs created from small businesses from 2020 to now, an average of 1,571,000 jobs a year.

Small businesses face plenty of challenges. They have limited access to capital compared to big corporations, increased pressure from other competitors, regulatory hurdles and red tape to deal with, not to mention the volatility of our current economic situation. Recession and inflation have been a huge obstacle for small businesses. Over 50% of small business owners say that inflation is their top challenge (U.S. Chamber of Commerce 2023).

Without small businesses pumping life into our economy the American people and our economy would experience a tremendous strain, on both a national and local scale. The consequences would reach far beyond the loss of millions of jobs. Small businesses contribute  substantially to our economy, without their contribution economic growth and innovation would slow. We would see reduced consumer spending and investing, which could lead to a recession. We would see supply chain disruptions and kinks in our supply chain which affect  other parts of our economy. We would lose the uniqueness and diversity we gain from having so many different businesses, which would result in a                  concentration of economic power in the hands of larger corporations, reducing competition. Without small businesses the government would lose a substantial amount in tax revenues, which would put pressure on government budgets, potentially leading to cuts in  public services and higher taxes on personal wages. 

It's crucial, more now than ever, to support small business and create a more stable and healthy economy. The importance of small businesses cannot be overstated. When we support small businesses, we ensure that steady life giving pulse will endure, giving life to our country for decades to come.

Photo 2 by: Tim Mossholder

We’re seeing a shift in the popularity of collar colors. For years parents and high school councilors have  encouraged young people to pursue traditional college educations and settle into a high paying white-collar job with a white picket fence to go with it. The prioritization of college degrees over trade careers has created an increasing shortage of skilled blue-collar workers in the US. There are over 9 million unfilled blue-collar jobs. So what do we do when the backbone of our economy starts to give out?

There is a demand for skilled trades people, which is outpacing the supply of people qualified to fill those roles. This shortage has increased the demand, which in turn has increased what businesses are willing to pay those workers. Between 2010 and 2012 the wage increase for blue color jobs went up only .6% compared to the increase of 4.5% for white collar jobs. However, between 2020 and 2022 those same blue color jobs increased pay by 14%, where the white-collar jobs only saw an increase of 7.5%. Wage gains for some blue-collar jobs have started to outpace gains for white collar jobs over the last three years. The combined shortage of trade workers and higher pay is driving up costs, creating a domino effect in our economy.

The starting pay for most white-collar jobs is still higher than entry level blue-collar jobs, but under the latest economic stress we’re seeing more and more layoffs in the white-collar world. Companies are turning to AI, replacing many employees as businesses try to cut back and ease the pinching pressure of our struggling economy. The result: many white-collar jobs are not as stable as they used to be.

Eight of the ten highest earning industries for small business ownership come from blue-collar industries including: construction, roofing, flooring, painting, heating & air conditioning, carpentry, plumbing, and electrical- all of which can earn more than $5,000 a month. This challenges the idea that you need to have a four-year degree in order to stand amongst the top earners of the country.

Blue-collar workers have always been the backbone of the United States and play a vital role in the American economy. In order to fuel a healthy economy, we need to find a balance between the blue-collar and the white-collar, this may require a shift in perspective as we help the young and upcoming workforce realize that blue-collar jobs are worth investing their time in. This country was built on the hard work of people willing to get their hands dirty and put in the extra effort.

Photo by: Jason Richard

Money supply refers to the volume of money held by the public at a particular time, this includes the currency in circulation (physical cash) and demand deposits (the assets on the books of financial institutions). The record of money supply is kept by the Central Bank of the country. 

Changes in the money supply have been seen as a key factor in driving the economy and business cycles. In the past, measuring the money supply has shown correlation between money supply and inflation as well as between money supply and price levels. However, over the last couple of decades, the relationship between money supply and inflation has become less predictable, making it less reliable as a guide for monetary policy. For this reason, monitoring money supply is used along side other economic measures, which allows for a broader, more accurate picture of the economy.

When the supply of money circulating increases, we typically see lower interest rates, which then generates more investment and puts more money back into circulation for consumers, which then leads to more spending. However, we can see the inverse of this when money supply falls or growth rate declines. When this happens, banks lend less, consumer demand declines, and people tend to hold on to their money rather than spending it, decreases again the amount of money in circulation. Further effects can be seen as businesses slow growth or lay off employees and home and car loans decline.

Turning 65 can mean a lot of things, but for most people it means signing up for Medicare. This can be a confusing thing to navigate. Let’s take a look at some Medicare basics and what your options are.

Medicare is a federal health insurance program. Those who are turning 65 can sign up between three months before their birth month and three months after their birth month, providing a 7-month window.

There are different parts of Medicare to cover specific services.

Medicare Part A (hospital insurance) covers inpatient hospital stays, care in a nursing facility, hospice, and some limited home health care. Normally, you don’t pay a monthly premium for Part A. There are some people who are not eligible for premium-free, but might be able to purchase Part A.

Part B (medical insurance) covers most doctor visits, outpatient care, medical equipment, diagnostic testing, ambulance service, and preventative services. Part B requires a premium amount, which for most people in 2024, is $174.70 per month and an annual deductible of $240. After the deductible is met, Medicare Part B covers 80% of your covered medical services, the remaining 20% you pay out of pocket.

Medicare Parts A & B are often called Original Medicare. Original Medicare pays most, but not all, of the costs of covered health care services. A Medicare Supplement Insurance, also known as Medigap, can help pay some of the remaining costs of your health care. This includes things like copayments, coinsurance, and deductibles, (the 20% from above). Some Medigap policies may also cover services or supplies Original Medicare doesn’t cover. Generally, you must have Medicare Parts A & B to buy a Medigap policy. One of the big advantages of a Medigap policy is you have the freedom to see any doctor that accepts Medicare.

Part C is known as Medicare Advantage and offers an optional, alternative way to receive your Original Medicare benefits. These plans are offered and managed by private health maintenance organizations (HMO’s). Instead of having Original Medicare, Parts A & B, you would have a managed plan like an HMO. To be eligible, you must already be enrolled in Parts A & B. These plans will cover the same services that traditional plans cover, but the independent HMO are allowed to set their own cost share requirements as well as their own co-pay and coinsurance amounts that you are responsible for paying. These costs are subject to increases as per the HMO. They also have different rules for how you can receive services. A downside to Medicare Advantage plans is they don’t always cover certain expenses when you get sick, resulting in unforeseen out-of-pocket costs, and what you end up paying for these plans can differ depending on your overall health. A significant limitation is Medicare Advantage plans use a network of doctors and hospitals, restricting your care to a list of approved doctors and facilities.

One challenge with the Medicare Advantage plans is that they can leave a market area and stop covering people in that area. Leaving these people to wake up one day with no additional coverage other than their original Medicare parts A & B. Medicare Supplement insurance companies can’t do that, providing you with reliable coverage. Once you are covered, the only way to lose the policy coverage is to stop paying the premiums. 

Part D helps pay for prescription drugs and recommended shots and vaccines. To get Medicare drug coverage, you must join a Medicare-approved plan that offers drug coverage. Each plan varies by cost and specific drugs covered, but they all must provide at least the standard coverage set by Medicare.

Deciding what coverage works best for you and your situation can take some research and consideration and will depend on your own personal factors. Do your homework and review each plan and its pricing.

Photo 1 by Marcelo Leal

Photo 2 byHush Naidoo Jade Photography

Photo 3 by freestocks