Costa Rica Rentals are great for Real Estate

Posted on October 4, 2016 by robertjrussellcompanies

I have to shield my eyes from the bright sun to really take in how stunning it is. On the shore of the white-sand beach, the Pacific Ocean laps at my feet. This beach is part of a national park—development is forbidden by the Costa Rican government.

I’m in the Southern Zone—one of the most untouched parts of Costa Rica. Over the decades since the 1970s, development has come hard and fast to Costa Rica. In the best known beach towns, you’ll find big hotels and sprawling condo buildings.

Here, it’s a different story. A 20-minute drive down the coast, you’ll come to the charming little town of Ojochal. The biggest hotel has just 30 rooms—you won’t find the massive chain resorts here you do in other parts of Costa Rica.

The Southern Zone has largely stayed off the radar of most tourists and expats—but that’s changing. It used to be hard to get to. Many of the few people who’d heard of it decided it wasn’t worth the trip. But then, in 2010, a new coastal road opened up. And, the drive from the capital San Jose, and its international airport, was slashed to three hours.

Now, more tourists are coming—and the Southern Zone is catching up to the rest of Costa Rica. As more people hear about it, I expect this area of Costa Rica to take off with vacationers. It’s stunning and beautiful. It has abundant wildlife and spectacular Pacific views. But it won’t get as developed as other parts of Costa Rica. A lot of the land here is in national parks. The government wants to keep it as unspoiled as it is now.

A lot of the tourists who will come here will be eco-tourists—or, the surfers who first came to Costa Rica in the 1970s, before the country really took off with vacationers.

Some will come for vacation. Others will want to own. But, because of that restriction on development, choices will be limited.

Get in now on real estate in the Southern Zone, while prices have yet to catch up with that rising demand, and you could do very well.

Just one mile from Ojochal is where you’ll find the development of Pacific Lots. It’s set back from the town, so it feels off the beaten track. It’s one of the best-in-class communities in all of the Southern Zone. And, pricing is low here. The developer bought up the land in the 1980s—so can keep prices low.

That means that you can get a lot with ocean or mountain views—or both—for less than you might expect.

I’ve just got word of one lot on offer here. It’s a 1.24-acre lot with prime ocean views as well as mountain views. Cost for that lot: $135,000. (There are also options to buy for less than that. Another lot here of 0.81 acres with good ocean views and great mountain views is priced at $85,000.)

There are around 250 homes built here—but they’re spread out. This isn’t a cookie-cutter development. And, there’s no rush to build. You can sit on your lot and build when you’re ready. There’s even a construction team here to help you design and build your own custom home.

If you decide to build, you could rent out your place when you’re not using it. Those original adventurers—the ones who visited in the 1970s—will want to come here. It’s reminiscent of that untouched Costa Rica they first came to see. But comfortable enough that they’re not roughing it.

Vacation properties rent out here for up to $1,500 a week. And, you have little competition from hotels in the area. Accommodation is scarce.

As more tourists and second-home buyers come, I expect prices will start to rise.

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Life Insurance Basics

Posted on October 3, 2016 by robertjrussellcompanies

Term or Perm Insurance, Whats The Difference?

There are many types of life insurance including; Whole Life, Universal Life, Indexed Universal Life, Variable Life and Term Life:

Whole life:

You generally make level (equal) premium payments for life. The death benefit and cash value are predetermined and guaranteed (subject to claims paying ability of the issuing company). Your only action after purchase of the policy is to pay the fixed premium.

Universal life:

You may pay premiums at any time, in any amount (subject to certain limits), as long as the policy expenses and the cost of insurance coverage are met. The amount of insurance coverage can be changed, and the cash value will grow at a declared interest rate, which may vary over time.

Indexed Universal life:life insurance hands

You may pay premiums at any time, in any amount (subject to certain limits), as long as the policy expenses and the cost of insurance coverage are met. The amount of insurance coverage can be changed, and the cash value will grow at an interest rate declared annually and based on the performance of a stock index, which may vary over time. What is Indexed Universal Life:  Indexed universal life insurance is a lot like universal life insurance.  An indexed universal life insurance policy gives the policy holder the opportunity to allocate cash value amounts to either a fixed account or fixed index account. Indexed universal insurance policies typically guarantee the principal amount in the indexed portion, but cap the maximum return that a policy holder can receive. Since these policies are seen as a “hybrid” universal life insurance policy, they are usually not very expensive (due to lack of management), and are safer than an average variable universal life insurance policy. However, the upside potential is also limited when compared to variable policies.

Variable life:

As with whole life, you pay a level premium for life. However, neither the death benefit nor cash value are predetermined or guaranteed; they fluctuate depending on the performance of investments in what are known as subaccounts. A subaccount is a pool of investor funds professionally managed to pursue a stated investment objective. You select the subaccounts in which the cash value should be invested.

Term Insurance:

Term insurance will last a specified amount of time based on it’s term. If you were to purchase a 20 year term policy it would last for 20 years. If the policy owner was to pass away within the 20 year term the death benefit would be paid to the beneficiary. If the policy owner was to decease after the 20 year term there would be no death benefit. The premium payments are at a very low cost and there is no cash value. You are purely purchasing for the death benefit only. There is also (ROP) Return of Premium Term Life Insurance which comes at a much higher cost.

How do I determine the amount of coverage I need?

There are many factors that need to be considered before purchasing Life Insurance. It’s affected by how many people depend on you, what your current budget is, and how much you can afford. It’s best to consult with a qualified licensed professional agent before making these types of decisions. Example: I ran into an old friend that is now 40+ years old that had purchased a 20 year term policy back when he was in his mid-20’s, before he had any children. I asked him, why did you buy only a 20 year term policy? His answer was “that is what my agent told me I needed”. He now has 3 children all under 10 and he needs to go through underwriting again in order to purchase the necessary insurance. The new policy will most likely be much more expensive because he is much older and could possibly have health issues. That is just one minor example of how important it is to purchase the correct policy and the correct amount from the start.

Why should I purchase permanent insurance?

Permanent coverage is a way for you to regularly save money and a way for you to leverage wealth. Your policy builds up value as you grow older. In many cases, it’s more flexible than term life and is designed to change according to your changing needs. It will also help you take care of the people who depend on you financially. A permanent policy may bring more value to a person that has good cash flow. A permanent policy is significantly more expensive than a term policy.

When should I purchase a term policy?

Term life lasts a certain period of time and then must be renewed or replaced in order to continue. This makes it a good choice if you are unable to afford a permanent policy and only foresee a need for a certain time. Term life is an excellent choice for young families who have a greater need for insurance when their children are young.

Why do people own life insurance?

People own life insurance to provide death protection, or to increase their savings. The cash surrender value accumulation can be used as a disciplined savings plan. The money accumulated could also be used to provide for education, retirement, emergencies or any opportunities that may arise.

What are some advantages of permanent insurance?

  •     You gain long-term cash accumulation.
  •     The values for your premium and death benefit can be guaranteed.
  •     You have an increasing death benefit.
  •     You can receive funding during disability.
  •     You get life-long insurance protection.
  •     The values may be sheltered from creditors.
  •     The proceeds at death are generally tax free.
  •     You have more flexibility and higher funding limits than some qualified plans.
  •     There are no early withdrawal penalties or forced distributions.

What are the benefits of whole life vs. universal life insurance?

The benefits of whole life are:

  •     The policy never has to be renewed as long as premiums are paid.
  •     The premiums remain the same through the payment period.
  •     The accumulating cash values act as a savings element.
  •     Some policies include the possibility of receiving dividends.
  •     Non-forfeiture options allow the policy holder to retain some benefits even if unable to pay the premium.
  •     There are guarantees which last for the life of the contract if premiums are paid.

The benefits of universal life are:

  •     The amount and frequency of premium payments is flexible although there are certain requirements.
  •     There is also flexibility in the amount of the death benefit, but it is subject to rules requiring the policy to maintain its status as insurance.
  •     You have the ability to take partial withdrawals from the cash value of the account.
  •     In most contracts there are guarantees which, if premiums are paid, will last for the length of the contract.

What are beneficiaries and contingent beneficiaries?

A beneficiary is the person or entity you name to receive your death benefit. Beneficiaries are often spouses, children and other family members, but you can name a friend or even a charity. Usually you name a secondary or contingent beneficiary to be next in line to receive your benefit if your first beneficiary dies before you.

If you feel life insurance may fit situation; consulting with a trusted independent Safe Money Advisor may make product selection and the accomplishment of your goals a much easier process.

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Moving Expenses and Deductions

Posted on October 2, 2016 by robertjrussellcompanies

moving-boxes-family

Summertime is the time of year when people move the most. Moving is a lot of trouble and can also be very expensive. If you move to start a new job or to work at the same job in a new location, the cost can be tax deductible. To qualify for this deduction, you must satisfy two tests:

  • the distance test, and
  • the time test.

Distance Test

To deduct your moving expenses, your new workplace must be at least 50 miles farther from your old home than your prior job location. For example, if your old job location was three miles from your old home, your new job must be at least 53 miles from your old home. If you had no previous workplace, your new job location must be at least 50 miles from your old home. If you go back to full-time work after a substantial period of part-time work or unemployment, your place of work also must be at least 50 miles from your former home.

Time Test

If you’re an employee, you must work full-time at your new job for at least 39 weeks the first year after the move. If you’re self-employed, you must also meet this test. In addition, you must work full-time for a total of at least 78 weeks during the first two years at the new job site. If your tax return is due before you meet the time test, you can still claim the deduction if you expect to meet it. There are exceptions to these rules in case of death, disability and involuntary separation, among other things.

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Saving Money with an IRA

Posted on October 1, 2016 by robertjrussellcompanies

IRA – Individual Retirement Accounts

Individual retirement accounts, or IRAs, are a method for saving money for retirement that is either tax-free or tax-sheltered. There are several types of IRAs, each with its own benefits, rules, and contribution limits. If you set up your IRA through a brokerage firm, you’re allowed to invest the funds in stocks, bonds, mutual funds, real estate and some other government-approved asset classes.

Traditional IRA

IRA

A traditional IRA allows you to deposit pre-tax earnings for distribution after you reach retirement age.  You contribute funds and receive a tax deduction, and your money is sheltered from taxes until you withdraw it at retirement time. The thought process is that you won’t withdraw the funds until you stop working, so the distribution you receive from the IRA will be taxed at a lower rate. If you tap into your nest egg before you are 59 ½ years old, there is a 10% penalty on top of the other taxes due. You must begin taking out the cash at age 70.5. For the 2014 tax year, the traditional IRA contribution limit is $5,500 per person; thereafter it is indexed for inflation in $500 increments. If you are 50 or older, you can make additional “catch-up” contributions above the government limit to $6,500. For individuals and heads-of-household who have an employer-sponsored retirement plan, traditional IRA contributions are only tax-deductible if your modified adjusted gross income (AGI) less than $60,000 to $70,000; the income phase-out range is $98,000 to $116,000 for married couples when the partner contributing is covered by an employer pension plan. You can still contribute to a traditional IRA, you just can’t deduct the contribution from your income for tax purposes.

Roth IRA

The Roth IRA was created by the Taxpayer Relief Act of 1997, and your funds are invested after taxes – which means you have already paid taxes on the money you deposit and do not get a tax deduction for Roth IRA contributions. However, the money in the account grown tax-free, and you can begin taking withdrawals without a penalty when you each the age of 59 ½. There is no tax on Roth IRA distributions; you already paid the tax on the income before you deposited it. The main benefit is that the interest or investment income the account has earned is also tax-free. Roth IRAs have the same contribution limits as traditional IRAs. Roth IRAs have income limits, so not everyone qualifies for this type of account. In 2014, individuals and heads-of-household can have an AGI of $114,000 to $129,000 and still contribute to a Roth IRA; for married couples filing jointly, that number starts at $181,000. The income limits change annually, so check with the IRS or your financial advisor before investing.

SEP-IRA

A SEP-IRA is a Simplified Employee Pension Individual Retirement Account. The rules are much more complex that with traditional or Roth IRAs; often these accounts are used by self-employed business owners who have few or no employees. SEP-IRAs have the same general features as a traditional IRA, but with much higher contribution limits. Money cannot be withdrawn before you reach the age of 59 ½ and you must begin taking distributions by the age of 70.

SIMPLE IRA

A SIMPLE IRA us another type of retirement plan used by many small-business owners. SIMPLE is an acronym for Savings Incentive Match PLan for Employees, and allows employers to match at up to 3% of their employees’ contributions. In 2014, the contribution limit is $12,000 per person, and “catch-up” contributions for people 50 and older is limited to $2,500. The SIMPLE IRA is an alternative to 401(k) plans for small employers and for people who are self-employed. Similar to traditional IRAs, deposits are tax-deductible, and the business owner can act and both employer and employee, meaning they can deposit both the maximum contribution and the 3% employer match.

YOU CAN HAVE MORE THAN ONE IRA

Traditional and Roth IRA contribution limits are consolidated, which means you may contribute a total of $5,500 to any combination of traditional and Roth IRA accounts.

However, you can make contributions to a SEP or SIMPLE IRA in addition to your traditional or Roth IRA. It’s a good idea to seek financial advice to determine your contribution limits and discover the maximum amount of tax shelters for which you qualify.

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Millennial mortgage credit scores increased in June

Posted on September 30, 2016 by robertjrussellcompanies

Housing starts edge higher
The overall level of housing starts ticked higher in July, driven by the multi-family sector.

Data from the US HUD and the Commerce Department show a 2.1 per cent rise in starts to a seasonally-adjusted annual rate of 1.21 million units. Single-family starts were up 0.5 per cent but the multi-family sector saw a 5 per cent rise in the month.

“Single-family starts, on a year-to-date basis, are up 10.6 percent and builders are cautiously optimistic about market conditions,” said NAHB Chief Economist Robert Dietz. “However, the permit trends indicate that supply-side headwinds, such as shortages of lots and labor, continue to affect the housing sector.”

The Northeast saw the largest gain (15.9 per cent) followed by the South (3.5 per cent) and Midwest (2.3 per cent) while the West saw a 5.9 per cent decline.

Millennial mortgage credit scores increased in June
Young Americans are continuing to increase their credit scores according to the latest data from Ellie Mae. The average FICO score of millennials who closed a home loan in June was 723, up from 722 in May and 721 in April.
Conventional loans made up 60 per cent of millennials’ closed loans in June, holding steady from May; FHA loans increased to a 37 per cent share of all mortgages closed in the month.

“Economic uncertainty may be contributing to a general tightening of credit, which could explain why we are seeing a slight uptick in the average FICO scores for closed loans to millennials,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “We also continue to see FHA loans play a significant role in helping millennials make their homeownership dreams a reality. These types of loans make up 37 percent of all closed loans to this generation, compared to just 23 percent of closed loans across all generations of homebuyers.”

Affordability hits home sales in California
Home sales in California were down by 4.1 per cent in July compared to June and down 5.1 per cent from July 2015.
The California Association of Realtors says that there were 415,840 sales on a seasonally-adjusted annualized rate and year-to-date sales are down for the first time in more than 18 months with a 0.3 per cent drop compared to last year.

Tight inventory is pushing median prices higher, up 3.9 per cent year-over-year; but the latest figures show them easing with a 1.8 per cent decline statewide in July compared to the previous month.

“California’s median home price rose again in July from last year, but the pace of increase has clearly slowed down in recent months,” said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. “While fundamentals such as increasing household formation and strong job creation continue to fuel housing demand and support price growth, low housing affordability and reduced buying power of home buyers has put a cap on how fast the statewide median price can grow.”

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Plan For Your Retirement…

Posted on September 29, 2016 by robertjrussellcompanies

Here is a good start to developing a successful retirement plan:

  1. At what age would you like to retire?retirement2
  2. How much do you currently have in retirement savings?
  3. What are your current living expenses?
  4. Based on an assumed inflation rate of 3-5%, what will your future living expenses be?
  5. Do you plan on working part time?
  6. What are your post retirement goals?

Once you have determined what sort of income you will need in the future, you’ll be able to make decisions about saving, investment and employer-sponsored or other retirement plans. You need to tailor your retirement plan to your own circumstances. Planning methods should be different for employees, executives and business owners. Familiarize yourself with the Social Security system, and look into post-retirement health care insurance coverage, including Medicare and long-term care insurance (LTCI.) Effective retirement planning will help you feel in control of your own future, and is possible whether you are financially comfortable or have limited means.

How Can I Determine My Income Needs and My Retirement Age?

You need to evaluate your present circumstances – your income, expenses, assets, and debts. Next, think about your future circumstances. Also, think about your future living expenses. Will you continue living in your current home or will you move to a condominium or retirement community? There are four main sources for retirement income: Social Security, pensions or other retirement vehicles, an investment portfolio or personal savings. If your employer provides early retirement packages to its employees, you’ll need to know how to evaluate such packages from a number of perspectives. If you think your current income will not provide you with your desired retirement lifestyle, there are steps you can take now to change your circumstances.

How Do I Save For Retirement?

There are many retirement vehicles available, including traditional and Roth IRAs, employer-sponsored retirement plans, non-qualified deferred compensation plans, stock plans, and commercial annuities. Proper retirement planning requires an understanding of the workings of these tools, and an understanding of how they may be taxed. This is especially important since the enactment of the Jobs and Growth Tax Relief Reconciliation Act of 2003 which reduced the capital gains tax rates on certain dividends, making the decision to allocate assets inside or outside a retirement plan more crucial. Another thing to keep in mind is; if you plan to pay for your child’s education, you will need to learn how to balance two competing financial needs.

What should I know about distributions from IRAs and other retirement plans?

You should become familiar with the possible ramifications of distributions which may include a 10% premature distribution penalty tax if distributions are made before you reach the age of 59½. There are certain questions you will need to answer.

  •     Can you borrow money from your retirement plan?
  •     Would it be better to receive your retirement money as a lump sum or as monthly payments?
  •     Can you roll your retirement plan balance into an IRA?
  •     What are the tax implications of naming more than one beneficiary, if you are allowed to do so?
  •     What are the required minimum distributions, if any, from the plan after you reach age 70½?

Do business owners have special retirement concerns?

If you are a business owner, you may want to plan for the succession of your business to a family member or other chosen recipient. You should also find out what retirement plans are best suited to your type of business.

What retirement plans are most appropriate for the self-employed or small business owners?

If you’re self-employed or a small business owner, you know that your needs are different from those of large companies. Several types of retirement plans are specifically designed for your situation. Consider setting up one of the following types of plan; a payroll deduction IRA plan, a simplified employee pension (SEP) plan, a SIMPLE IRA plan, a SIMPLE 401(k) plan, or a Keogh plan which is a qualified retirement plan established by a self-employed individual or partnership.

What retirement plans are most appropriate for corporations?

If your business has multiple employees, one of your goals in choosing a retirement plan should be to balance their needs against the needs of your business. Consider the following retirement plan options; a payroll deduction IRA plan, a simplified
employee pension (SEP) plan, a SIMPLE IRA plan, a SIMPLE 401(k) plan, a 401(k) plan, a profit-sharing plan, a money purchase pension plan, an age-weighted profit-sharing plan, a new comparability plan, a thrift/savings plan, a defined benefit plan, an employee stock ownership plan (ESOP), or a cash balance plan.

What retirement plans are available to tax-exempt organizations?

A tax-exempt organization has unique considerations for setting up a retirement plan because it is not subject to federal income tax. An employer tax deduction is of little value, for example. There are two types of plans which meet the needs of tax-exempt organizations; a 403(b) plan, or a 457(b) plan.

What is a non-qualified deferred compensation plan?

You should also consider setting up a non-qualified deferred compensation plan; a flexible plan which does not need to satisfy stringent requirements. You and your employees could also receive greater benefits under a non-qualified plan because there are no limits on employer contributions.

There are three disadvantages to nonqualified plans:

  •     They may not be as beneficial from a tax standpoint.
  •     They may only be available for a select group of employees.
  •     The assets within are not protected if the employer goes bankrupt.

For these reasons qualified plans usually appeal more to employers than employees. Also, if you are an owner and wish to be included under the plan, a non-qualified deferred compensation plan will only be suitable if your business is a regular or C corporation.

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(HUD) recently announced the agency is making $2 million in grants available to help low-income families

Posted on September 28, 2016 by robertjrussellcompanies

HUD Offers $2 Million to Help Students in Assisted Housing Afford Education

The U.S. Department of Housing and Urban Development (HUD) recently announced the agency is making $2 million in grants available to help low-income families and young people apply for federal aid for college and other post-secondary educational opportunities.  The funding is being offered through HUD’s longstanding Resident Opportunities and Self Sufficiency (ROSS) Program.  The available funding will support ‘Education Navigators’ in up to six Public Housing Agencies (PHAs) across the country.

Increased access to higher education can significantly improve life outcomes. The Department of Education estimates that those who earn a bachelor’s degree earn two-thirds more than those with only a high school diploma or an average of $1 million more in lifetime earnings.  In addition, college graduates are far less likely to face unemployment.  It’s also estimated that within the next four years, two-thirds of all new full-time jobs will require a college education.

HUD Secretary Julián Castro says, “Many families find the cost of higher education prohibitive, but know that a degree or training beyond high school is essential to be competitive in today’s 21st century global economy. By helping students access federal financial aid, HUD is lifting up students to overcome financial challenges and reach their full potential.”

HUD’s ROSS Program encourages local, innovative strategies that link public housing assistance with public and private resources to enable participating families to increase earned income, reduce or eliminate the need for welfare assistance, and make progress toward achieving economic independence and housing self-sufficiency.  The ROSS for Education Program, also known as Project SOAR (Students + Opportunities + Achievements = Results), will support hundreds of young people between the ages of 15–20 to apply for U.S. Department of Education’s Free Application for Federal Student Aid (FAFSA).

Lourdes Castro Ramírez, HUD’s Principal Deputy Assistant Secretary for Public and Indian Housing, adds, “By investing in our youth and communities, we’re helping to unlock the promise of higher education for all. Project SOAR will help students in HUD-assisted households to access opportunity and achieve their dreams.”

Project SOAR is one of several HUD initiatives to increase access to federal financial aid for HUD-assisted families and students:

  • HUD is working with the Department of Education to better understand FASFA completion and educational attainment of HUD-assisted tenants through data sharing.
  • Alongside the White House’s Social and Behavioral Sciences Team, HUD is exploring whether behaviorally informed messages can increase completion of the FAFSA among students with housing assistance.
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Let’s talk Social Security

Posted on September 27, 2016 by robertjrussellcompanies

Whats the Future of Social Security

What does the future of Social Security look like? It’s an important question, as Social Security benefits are a large source of retirement income for many Americans. According to the Social Security Administration, 52% of Americans aged 65 and older rely on Social Security for at least half of their retirement income.

One challenge facing Social Security is the question of solvency. To discuss this point, it’s important to note there are actually two trust funds for the program: the Old Age and Survivor Insurance trust fund for retirement benefits, and the Disability Insurance fund for disability-related benefits.

To reinforce, we believe that the baby boomer generation may be able to count on Social Security, but it’s important to know what may be in store. With that said, here’s a review of some outlooks on Social Security’s future.

Outlook from the Social Security Trustees

In July, the Social Security trustees released their annual reports, with rosier projections than others have put forward. Assuming that current public policy stayed in force, the retirement and disability funds, together, would be insolvent by 2034. By that time, the program would no longer have enough revenue coming in to pay retirees all of their promised benefits (a substantial impact on retirement income security.

In fact, Americans would face a 21% haircut to their benefit payments – Social Security would have enough revenue to cover just 79% of the promised benefits. When 2034 rolled around, the federal government would collect enough in payroll taxes to cover 75% of promised benefits until 2090 (actuaries for the Social Security program perform calculations over a 75-year window). The Social Security Administration expects its unfunded obligations will reach $11.4 trillion by 2090.

Keep in mind that Social Security is being paid for with means other than payroll taxes, including income tax collections, interest earnings on trust funds assets, and newly printed monies.

Other Viewpoints

The nonpartisan Congressional Budget Office has a more negative outlook. To project dates of insolvency, the CBO ran over 500 simulations of different outcomes. According to the CBO, 80% of the simulations had negative outcomes between 2026 and 2033. So both funds would likely be exhausted at some point between 2026 and 2033.

Based on its overall findings, the Congressional Budget Office estimates Social Security would be insolvent by 2029.

Still, others take a more extreme view. David Stockman, a former Director of the Office of Management and Budget, estimates Social Security can go bankrupt in just a decade.

His reasoning is due to a variety of factors:

• In terms of cash-flow, the disability and retirement funds spent $859 billion during 2014 but took in just $786 billion in tax revenues – a $73 billion gap
• The trustees reported both funds face a cumulative cash deficit of $1.6 trillion from 2015 to 2026
• In its general budget forecasts, the White House projects general fund outlays (in laymen’s terms, an amount of money spent) will exceed general revenues by $8 trillion over the next twelve years (excluding payroll taxes)
• Therefore, Stockman asserts that more public debt will have to be added to cover the $1.6 trillion gap
• According to Stockman, the remaining figures rely upon unrealistic or unsatisfactory accounting metrics to justify the judgment of solvency until 2034

Stockman notes the 2015 report on the funds projects $1.2 trillion in interest earnings over the next 12 years – which assumes a 3.5% growth rate. Internal analysis from Safe Money Resource shows that bond yields for the 10-Year Treasury Constant Maturity Rate have ranged roughly from 1-3.7%, with a range of 1.78-2.06% in 2016. With bond yields and interest rates in general at such lows, Stockman says the interest earning projections are inflated.

Moreover, the 2015 report projects nominal GDP growth of 5.1% over the next twelve years. Stockman asserts that these growth expectations are unrealistic, given how GPD growth has been slower in recent years. In fact, yearly real GDP growth hasn’t exceeded 3% for a straight decade, as of February 2016.

What’s the Takeaway?

These outlooks for Social Security leave us with two valuable takeaways: We can’t rely upon guaranteed government assistance for income security, and Social Security should be just one component of a retirement income plan. A diverse selection of income sources should be tapped for monthly income needs in retirement, ideally based on a suitable balance of income-generating ability, risk, and protection.

Safe Money Resource specializes in helping retirees and pre-retirees create customized income strategies. We have helped thousands of Americans with their income goals, whether it’s helping create a strategy from the ground-up or offering a second opinion on an existing income strategy.

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Instagram vs. Snapchat

Posted on September 26, 2016 by robertjrussellcompanies

Are you using Snapchat in your real estate business? Well, you should be. The service’s disappearing Stories feature has reinvented social media and is currently changing the game for publishers’ shared content. (It’s also insanely popular with millennials, too). Now, not to be left behind, the Facebook-owned Instagram wants to in on the action.

Thanks to a recent Instagram update, users can now post pictures and videos that disappear after 24 hours, sharing everyday moments as they happen in real time. The company even added a drawing tool and text capabilities to try to mimic the flair of its competitor. These Stories never appear in the main Instagram feed and can be found across the top of the screen upon startup. Like the service’s new algorithm-based feed, Stories will be dished out the same way, so you can prominently see updates from people you interact with the most.

The goal for Instagram is to get more people to remain on their platform as long as possible, without jumping ship to others. Also like Snapchat, Insta’s experience is quick and casual; users can post updates on-the-go, without much thought—perfect for the time-crunched REALTOR®.

Whether you use Snapchat or Instagram, using a Stories platform helps you speak directly to your customer base and showcase the wowing features or amenities of a listing. Like all social media, it can also help your buyers and sellers get to know the real you, which keeps you top of mind the next time they have real estate business to conduct.

Which should you use with so many choices? Our suggestion: if you’re already on Instagram, there’s no reason not to jump aboard its built-in Stories feature, especially if you’ve been putting off getting to know Snapchat. However, Snapchat’s Story capabilities hit the market first and is currently more in depth than Instagram’s, with location-based filters, rewinding and fast-forwarding options, and those devilishly fun masking lenses.

So, which should you use? Decisions, decisions! There’s no right or wrong answer here, as long as you’re immersed somewhere in the social world. But the better question—the right question—is: Which one are your buyers and sellers on?

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Louisiana floods

Posted on September 25, 2016 by robertjrussellcompanies

At least eight people have died and more than 40,000 homes have been damaged in the recent Lousiana floods. Now, Fannie Mae is reminding mortgage servicers that they have the ability to help customers affected by the disaster.

On or about 8/16/2016, about two feet of rain was dumped on the southern part of the state, according to an Associated Press report. Some residents even had to use boats to get back into their houses.

Obviously, the damage can present crushing financial problems for homeowners. Consequently, Fannie Mae is reminding servicers that under its guidelines for single-family mortgages, they have the ability to grant an initial period of mortgage forbearance to borrowers affected by the disaster. Additional forbearance is available with approval from Fannie Mae, and Fannie’s guidelines also authorize servicers to delay foreclosure sales and other legal proceedings in flood-affected areas.

“We know that many people have had their lives disrupted by the flooding in Louisiana,” said Malloy Evans, Fannie Mae vice president of servicing. “Our servicers are committed to helping homeowners affected by natural disasters and we are grateful for their efforts to offer the appropriate assistance to families in need. our thoughts are with all of those who have been impacted.”

Fannie’s guidelines allow a servicer to temporarily suspend or reduce a homeowner’s mortgage payments for up to 90 days in the event a disaster has “adversely affected the value or habitability of the property,” or if the disaster has temporarily impacted the borrower’s ability to make their mortgage payments, according to a news release. And since disasters can make reaching homeowners difficult, the guidelines allow servicers to extend temporary relief even if they can’t contact impacted homeowners right away.

If a servicer establishes contact with a homeowner, the servicer can offer forbearance for up to six months, according to the release. That may be extended for an additional six months for homeowners who were current or delinquent 90 days or fewer when the disaster occurred.

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