States with highest American Well-being, economy,jobs, a review 2014

US Job Growth

In 2007, leading up to the Great Recession, 79.9 percent of people ages 25 to 54 in the United States had a job. In the 12 months ending June 2014, five years after the recession ended, only 76.2 percent of people in that age group were working.

The latest rates show a slight improvement from fiscal 2013, when 75.9 percent of people in their prime working years had a job nationally. At that time, employment rates were below prerecession levels in 35 states.

Still, at 3.7 percentage points lower than before the recession, the employment to population ratiofor prime-age workers shows that the U.S. labor market remains weak. This finding has significant budgetary consequences for states:

  • Without paychecks, people pay less income tax and tend to buy less, reducing sales and business income tax revenue.
  • Unemployed people frequently need more services, such as Medicaid and other safety-net programs, increasing costs at a time when state governments may have less tax revenue.

A state-by-state comparison of calendar year 2007 with fiscal 2014 shows:

  • No state reported employment rate gains for 25- to 54-year-olds.
  • 29 states had statistically significant decreases.
  • The largest decline in the employment rate was in New Mexico, where 69.9 percent of prime-age workers had jobs in fiscal 2014 — 9.2 percentage points lower than in 2007.
  • Among the least affected were Vermont and Nebraska, which recorded the smallest observed changes in their current employment rates of 83.3 and 85.2 percent, respectively.

Although unemployment figures receive more media attention, the employment rate is a preferred index for many economists because it provides a sharper picture of changes in the labor market. The unemployment rate, for example, fails to count workers who stopped looking for a job. By focusing on 25- to 54-year-olds, trends are less distorted by demographic effects such as older and younger workers’ choices regarding retirement or full-time education.

A statistically significant decrease indicates a high level of confidence that there was a true change in the employment rate. Changes that are not statistically significant offer less certainty and could be the result of variations in sampling and other methods used to produce employment estimates. Without additional testing for statistical significance, caution should be exercised when comparing change in one state’s employment rate to change in another state’s rate.

Analysis by Jeff Chapman and Julie Srey

Unemployment

employment rate

Change in Spending

fed aidTax Revenue Volatility

tax revenue volatility

 reserve funds retirement costs tax revenue change in employment rate

American Well-BeingUSA state of american well being

New state rankings from the Gallup-Healthways Well-Being Index® show that, over the seven years that we have been measuring and analyzing well-being, a number of U.S. states have made repeat appearances in the top ten list. Hawaii, which is ranked second this year, and Colorado, which is ranked sixth this year, have made consistent appearances in the top ten list all seven years. Marking its fourth appearance since 2008 on the top ten list, Alaska secured the number one spot for the very first time.

Familiar states also appear among the lowest well-being states. For the sixth consecutive year, West Virginia and Kentucky have the lowest well-being in the United States, ranking 50th and 49th, respectively. Other states that have appeared in the bottom ten all seven years are Arkansas, Ohio and Mississippi.

2014_State_Rankings_CoverOur latest report, “The State of American Well-Being: 2014 State Well-Being Rankings” examines the comparative well-being of the 50 states. You can read more about the rankings here and download a copy here.

The Gallup-Healthways Well-Being Index uses a holistic definition of well-being and self-reported data from individuals across the globe to create a unique view of societies’ progress on the elements that matter most to well-being: purpose, social, financial, community and physical. It is the most proven, mature and comprehensive measure of well-being in populations. Previous Gallup and Healthways research shows that high well-being closely relates to key health outcomes such as lower rates of healthcare utilization, workplace absenteeism and workplace performancechange in obesity status and new onset disease burden.

Connie Dello Buono

Prevent vascular disease, manage inflammation, get GYV health caps to boost ATP cells performance and speedy repair of your body, email connie to get the caps and join in spreading the benefits with extra income for you at motherhealth@gmail.com and text 408-854-1883

Maximum Total Deductible Contribution to Both Defined Benefit and Profit Sharing/401(k) Plans

Generally, employers that adopt both a defined benefit plan and a defined contribution plan (including a profit sharing plan with or without 401(k) salary deferral contribution features) are able to make the maximum contribution to both plans. However, that’s not always true. In some cases, there is a lower maximum deduction that may be applicable to certain employers on the total combined contribution to both plans.

Closely held businesses often want to adopt and maintain both a defined benefit plan and a defined contribution plan in order to maximize the company’s total deductions and to maximize retirement contributions. Aside from traditional defined benefit plans, fully insured plans and cash balance plans are also types of defined benefit plans. While there are also several types of defined contribution plans, profit sharing plans and/or 401(k) plans are the more popular types.

A defined benefit plan can be designed to provide maximum retirement benefits and a 401(k)/profit sharing plan may allow employees to maximize salary deferral contributions. However, some employers may have defined benefit plans that may not be insured by the Pension Benefit Guaranty Corporation (PBGC). In those cases, the total combined deductible contribution to both a defined benefit plan and a defined contribution plan (including a profit sharing/401(k) plan) may be limited. PBCG insurance may not be available if:

  1. the only employee(s) who will be participating in the plan are only the owner/employees (including the spouses, as may be applicable), or

  1. the employer is a professional service company (e.g., dentists, doctors, lawyers, public accountants, architects, pharmacists, etc.) with no more than 25 employees.

In those cases, the Internal Revenue Code provides that the employer’s aggregate total maximum deductible contribution to a defined benefit plan and a defined contribution plan (including a 401(k)/Profit Sharing plan) may not exceed the greater of:

  1. 31% of the total compensation of all eligible employee(s) in both plans if the contribution to the defined benefit plan is less than 25% of total compensation; or

  1. The sum of the contribution to the defined benefit plan, and the contribution to the defined contribution plan (excluding any employee salary deferral contributions to the 401(k) portion of the plan) not exceeding 6% of the total compensation of all eligible employee(s) if the contribution to the defined benefit plan is more than 25% of the total compensation.

Please note that for qualified plan purposes including in the determination of deductible contributions, the maximum compensation that may be used for any plan participant, may not exceed the maximum amount allowed by the Internal Revenue Service for a given year. For 2013, the maximum annual compensation that may be considered for a plan participant may not exceed $255,000.

The foregoing rule may be illustrated by the following example:

Assume a professional service practice with 3 employees including the owner and spouse:

  • Owner, 52 years old
  • Owner’s Spouse, 42 years old
  • Employee, 40 years old

The employer is considering adopting a profit sharing plan to which employee 401(k) contributions may be made, and a defined benefit fully insured plan with a normal retirement age of 62, designed to provide the maximum retirement benefit primarily for the owner/employee and the maximum deductible contribution. Based on some specific plan designs, as shown below, the annual contribution to the defined benefit fully insured plan for all participants of $262,425 exceeds 25% (i.e., 77.18%) of total compensation. Consequently, the total maximum employer contribution to the profit sharing plan for all participants (consisting of a profit sharing contribution and a 3% safe harbor contribution) is limited to 6%.

Employee

Annual Compensation

Annual Contributions

Fully Insured

412(e)(3) Plan

Profit Sharing/401(k) Plan

Profit Sharing Safe Harbor

Total ER

Contribution

EE 401(k)

Owner $ 255,000 $ 227,941 $ 9,800 $ 7,650 $ 17,450 $ 17,500
Spouse $ 45,000 $ 20,142 $ 313 $ 1,350 $ 1,663 $ 17,500
Employee $ 40,000 $ 14,342 $ 87 $ 1,200 $ 1,287 $ 0
TOTAL $ 340,000 $ 262,425 $ 10,200 $ 10,200 $ 20,400
% of Compensation

77.18%

6%

Contact Connie Dello Buono 408-854-1883 motherhealth@gmail.com to have a chat with our team of financial advisors.

4 Ways Men and Women Approach Finance Differently by Maria Cornelius

Anyone familiar with John Gray’s Men Are from Mars, Women Are from Venus knows the premise that men and women communicate very differently. Perhaps this explains why most female investors prefer to work with a female adviser and most married women leave a male adviser after the husband dies. Starting with the first conversation, women want, need and deserve distinct treatment in financial advice.

Old-fashioned gender roles designate the man of the house as responsible for personal finances. That changed over the past few decades but, if you’re a woman, your adviser must understand the role money played in your early life. Another concern: Women constitute more than half of financial planning or investment clients, yet less than a quarter of certified financial planners are women.

As a wealth manager with a large female client base, I notice four differences in how men and women approach financial decisions:

Communication and learning styles. Eleanor Blayney’s Women’s Worth: Finding Your Financial Confidence points out that women and men absorb and process information differently. Fundamentally, women learn through interaction with others, neurologically wired to be social and seek out relationships.

Especially if you’re a woman, find an adviser you connect with on a personal level. Talking openly about what matters most to you helps your adviser create a plan to prioritize and achieve your financial goals.

I also find that even highly accomplished and intelligent women (with expertise outside finance) can feel uneasy amid complex projections and financial jargon. Most prefer an adviser who can find a way to communicate in plain English.

While male clients may be more interested in charts and graphs that illustrate a point, women may take to an adviser who can connect financial advice with real-life examples. Competitive terms possibly motivating to men, such as “beating the market,” may not persuade women as deeply.

Confidence. Although this is shifting slowly, women’s greatest financial challenge remains lack of confidence in decision-making. The 2013-14 Financial Experience and Behaviors Among Women Prudential Financial survey, for instance, finds that “while women are taking control of household finances, they are no more prepared to meet long-term financial goals than they were a decade ago.”

The previous year’s survey also found only 23% of female breadwinners describing themselves as “very well prepared” to make financial decisions (compared with 45% of male counterparts) and that women are twice as likely to describe themselves as financial beginners (15% of women, 7% of men).

Due to this lack of confidence or experience in financial matters, many women want education from an adviser — and asking professional advice from a man may actually intimidate them.

Risk. Women’s generally lower tolerance to financial risk often reflects this lack of confidence. Many women lean toward more-conservative investing since greater risk might lead to failure. Women are also more likely to view money in terms of security.

I see this in female clients holding large amounts of cash in money markets or bank accounts. Although intuitively they know that in the long run investing is far more beneficial, fear of making a bad decision and losing the money influences them more. Find an adviser to explain the effects of not keeping up with inflation and that you can invest conservatively for long-term goals in many ways.

Life expectancy. Conservative investing isn’t bad, but if you take too little risk early you may barely keep up with inflation and won’t accumulate as much over your lifetime — which will likely be longer than a man’s. Research shows that in the U.S. women live, on average, almost five years longer than men; more than 975,000 American women are widowed annually, according to the latest U.S. Census data. Widows are also more likely than widowers to suffer a drop in income after the death of a spouse; almost half (more than 48%) of poor elderly in the U.S. are widows. (Women are also more likely than men to take career breaks or work part time for a variety of reasons.)

Median age for new widowhood is 59, which, combined with a high divorce rate, means that most women bear sole responsibility for finances at some point.

Identifying an adviser who wants to do more than just manage your investment, one who listens to and understands your goals and priorities, educates you on important concepts and encourages you to ask questions can lead you to a greater security and focus on your own long-term goals.

Tip: Your advisor should love gardening. Invest like a girl. Talk your financial emotion with your financial advisor. Learn from the mistakes of your parents. Do not use your house as your retirement plan. Contact Connie Dello Buono for a team of financial advisors, and other experts. 408-854-1883 motherhealth@gmail.com CA Life Lic 0G60621 in 50 US states.

Teaching your children about money, million dollar baby

When you start saving $200 per month for your baby who is less than 1 yr old and the savings accumulate with return of at least 6%, guaranteed at 4% the money owned by you doubles every 12 years. This will show your child how money compounds and savings taken via EFT can build towards college, emergency and retirement funds. These funds are inside a permanent life insurance (whole life or UL) that accumulates tax free and can be used via a loan, without the need to repay.

Many parents struggle to think about college plans. We know that there are city colleges for affordable tuition during the first three years of college. But then, when we see our children struggling to be working student, we shed our tears like me when I saw my 18 yr old daughter cleaning the cup cake store where she works.

My son wished to be a full time student but understands to be a working student to help our family financially.

Would it be a saving grace to start saving early? The savings under a permanent life insurance is owned by you and can also be used toward your retirement and increases your estate.

Contact Connie Dello Buono, 408-854-1883 motherhealth@gmail.com CA Life Lic 0G60621 in 50 US states.

The Future Is For Real: Succession Planning Reframed by Lewis J. Walker, CFP®; and Maria C. Forbes

The 2014 movie Heaven Is For Real gives one pause to ponder the future. After life, what’s next? Colton is the real-life son of Todd and Sonja Burpo.

The film chronicles a near-death experience when Colton was a young child. The family was incredulous over his miraculous recovery from an emergency appendectomy. More amazing was the story that emerged afterwards—an account of Colton’s trip to heaven and back, details involving long-deceased relatives and other facts that had never been revealed to the 4-year-old boy in his short lifetime.

There are believers, nonbelievers, and skeptics when it comes to concepts of God, heaven, and hell. Your view of such things will color your perception of the future and how you earn money and deploy resources.

C.S. Lewis in his masterwork, The Screwtape Letters, observes that human beings “live in time,” whereas God, angels, and spirits, do not. Our earthly sojourn is measured in years and most financial life planning decisions are based on assumed time frames. How much time is deposited in our personal time bank, we do not know. We all will have a last day. What impact will your last day have on your practice, your associates, family, clients?

Your future is for real. Do you have a plan for living well, with passion and purpose? Living well is not just about money or financial security, although as psychologist Abraham Maslow observed, you must feel secure before you can move to higher levels of self-actualization.

Early in your career, your main focus is on establishing a practice, paying expenses, and taking home enough to sustain self and family. Philosophical musings and thoughts of a higher order come with time, experience, and financial success.
Our profession also evolved. We moved from commission-based survival to fee structures and client-centric planning. In the beginning, “financial planning” itself was a specialty; now there are niches and specializations within the financial planning umbrella. Thinkers like George Kinder and Dick Wagner, co-founders of the Nazrudin Project in 1994, introduced a life planning focus, bringing money issues into a bigger picture. We recognize that money plays a role in our future, but there is far more involved than that. Do we ask ourselves the same questions that we ask of clients? Often, we do not.

Aging and Succession Planning

True well-being involves meaning and purpose. What challenges will you face in the next 10 years, and 10 years beyond that? What will have transpired in your life, that of your family, and that of your practice and associates? What constitutes financial, emotional, physical, and spiritual success? Have you recognized the linkages between all four?

You plan for major events in life—coming of age ceremonies, college, weddings, vacations, business and professional growth, major purchases, and retirement. You may have marketing and business plans. Do you have a comprehensive plan to age well, to grow purposefully into your future? You will leave your practice someday—voluntarily or involuntarily. How will you extract the value that you have built, either for retirement or heirs? Have you provided for succession with a well-crafted plan

We know financial advisers who died young, and due to a lack of planning, left a mess. If death came like a thief in the night, what would be the impact on your family, associates, employees, clients, and your legacy? This is not something to be thought about only when you receive an AARP membership in the mail. Those who are potential successors to aging advisers and are just starting to build something of value need to consider issues of business growth and continuity now.

“Succession planning” or “exit planning” may be akin to saying, “Let’s plan your funeral”—a bit of a downer. Let’s encase the topic within a more dynamic resolve to build business value and assure continuity.

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Call Connie Dello Buono, Insurance Broker in 50 US states at 408-854-1883 motherhealth@gmail.com CA Life Lic 0G60621 to use life insurance to protect your business and its future. 

How Roth IRA Distributions are taxed

How Roth IRA distribution are taxed

If you have 401K, stocks, mutual funds, Roth IRA, IRA, annuities or other kinds of assets, you need asset protection using your life insurance.

Use this life insurance application to complete when you decide after discussing with me about your asset protection plan with illustration detailing cash accumulation, face amount and tax strategies. Connie Dello Buono 408-854-1883 motherhealth@gmail.com CA Life Lic 0G60621 Life Insurance Broker in 50 US states

Life Insurance Application Guardian

retirment knowns and unknowns

Optimal Fixed Annuity for Retirees: Immediate versus Deferred by David Blanchett

For those who are willing to give up liquidity to maximize guaranteed income for life, the solution has always been relatively straightforward: purchase a lifetime Single Premium Immediate Annuity (SPIA).

However, in recent years, annuity companies have begin to offer Deferred Income Annuity (DIA) contracts, also known as longevity annuities, which similarly provide guaranteed income for life but an income stream that doesn’t start for years or decades into the future (i.e., the income is deferred).

The downside of the DIA approach is that the retiree still has to fill the income gap between now and when the DIA starts; the upside is that it requires far less of an investment into the DIA to get what ultimately is still income for life, because of both the years that income won’t be paid, and the opportunity to accrue both interest and mortality credits during the waiting period.

Yet with more choices now between SPIAs and DIAs – not to mention whether to include features like inflation-adjustment and death benefit riders – it becomes difficult to determine what is the “best” allocation among such contracts.

Blanchett analyzes the issue looking at various:

  • equity allocations (for the non-annuity portion)
  • the portion of income attributable to Social Security
  • the withdrawal rate, the inflation and return environment
  • the risk aversion of the retiree
  • the desire for leaving an inheritance behind
  • adjustments for anticipated life expectancy

The overall conclusion of the results is that nominal SPIAs are often most favorable, although it would only take a small increase in payout rates from DIAs to make them dominant in most situations, suggesting that if pricing for DIAs gets just a little more “competitive” (i.e., payouts improve as more companies offer such contracts and compete for retiree dollars) they may soon deserve far more consideration as a client solution.

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For annuity products, call Connie Dello Buono CA Life Lic 0G60621

408-854-1883 motherhealth@gmail.com in 50 US states