A Website for Emotional Rescue from the Economy

Feeling stressed out by the economy? Reuters News reports that a new website by the U.S. government may help soothe frazzled nerves or at least put yon on the lookout for strange behaviors.

A guide to “Getting Through Tough Economic Times” available at http://www.samhsa.gov/economy/ is meant to “help people identify any serious health concerns related to financial worries, develop coping skills and find help,” the Substance Abuse and Mental Health Services Administration announced this week.

Left unchecked, stress can lead to the risk of clinical depression, anxiety and compulsive behaviors such as gambling, overeating and even spending, SAMHSA said.

Read more about controlling stress and anxiety

A Savings Surge: Is the Mattress the Right Place for Your Money?

American consumers and businesses are embarking on a new era of thrift, saving more money than ever before. Should you be concerned about safety? A homespun urban myth quips that a mattress may be a better vault for those savings than a neighborhood bank.

Fortunately, for your wealth and your health, there’s no need to lose sleep or make your mattress uncomfortable. The Federal Deposit Insurance Corporation (FDIC) insures all funds on deposit with affiliated financial institutions up to $250,000 per depositor.  A good thing, too, since the U.S. personal saving rate in the last three months of 2008 rose to its highest level in six years.

“If American consumers are less indebted, live within their means and have more money in savings, they are better positioned to spend on a sustainable basis for years to come,” said Greg McBride, senior financial analyst at Bankrate.com. “As painful as that is economically in the short run, these developments will better serve us in the long run.”
Discover how to manage your savings

The Search for Security at Retirement

What’s more important to today’s retiree:  flexibility in investing or rock-solid dependability? It will come as no surprise that the pendulum is swinging in answer to that question, from the former to the latter.

A recent survey reported in investmentadvisor.com found that those at or nearing retirement “expressed significantly lower levels of financial comfort, greater concern about further market declines, and higher interest in guaranteed income streams for retirement” than one year ago.”

Where once “the ability to make decisions about how money is invested, diversified, and allocated” was held as the most important factor, now it is the safety and sustainability of a “guaranteed payment stream” above all else.

One such product for creating that kind of stability for retirement is the Annuity.

In the U.S. an annuity contract is created when an individual gives a life insurance company money which may grow on a tax-deferred basis and then can be distributed back to the owner in several ways. The defining characteristic of all annuity contracts is the option for a guaranteed distribution of income until the death of the person or persons named in the contract. Perhaps confusingly, the majority of modern annuity customers use annuities only to accumulate funds and to take lump-sum withdrawals without using the guaranteed-income-for-life feature.
Learn more about using annuity for retirement savings

Life Insurance Options When Times are Tough

“In hard economic times, investors look for ways to lighten their financial load,” writes life insurance advisor Peter C. Kat in this month’s Journal of Financial Planning.

Affordable life insurance can have a decisive role to play. Instead of buying higher-cost permanent policies that generate cash value, policy buyers can look to much lower-cost term insurance for savings while protecting their families against catastrophic loss. If cash value policies are acquired make sure they are low expense so you can have immediate liquidity if and when you need funds. When savings have amassed  in a policy and cash is needed, investors may be able to withdraw or borrow from cash values of permanent policies.

Financial decisions can come under stress in difficult economic times. Yet, decisions about life insurance during such periods are vital to your family’s future. So keep these guidelines in mind. Term life insurance is much more relevant because of its simple, low costs. Low-expense survivorship universal life should be used for term insurance when estate tax liquidity is the problem. Static-priced universal life insurance with low to zero cash values shows its significant weakness when liquidity is needed, and is often rejected for that reason alone.  Finally, the amount of early whole life and conventional universal life cash values can be improved by buying low-cost versions.

The Journal of Financial Planning is the official publication of the Financial Planning Association.

Smart Shopping: Getting and Protecting the Best Price

If you’re within clicking distance of this blog post, chances are good you do at least part of your shopping online these days. We hope you’ve already discovered why Efinancial is the best place to shop for life insurance.  With this post, we’d like to help you “insure” that your other household purchases result in the lowest price for the best value.  The nifty Web tools that follow keep an eye on prices for you at Amazon.com as well as some other Web sites to fill you in on sales, price drops and special offers.

Amazon Price Watch (aka NukePrice.com)
<http://www.nukeprice.com/onlinetools.html>
Amazon Price Watch may sound like it’s only Amazon.com prices, but it actually works with around 100 online retailers. You can have it watch the price of something by dropping its link into the service’s Web form, or by installing a browser add-on that lets you start tracking from the retailer’s site.

Apnoti
<http://www.apnoti.com/>
Apnoti watches Amazon for price drops. You can use it either by dropping in the Amazon product link and your e-mail address or installing a tool bar that adds the option to watch a price to Amazon.com. Apnoti refreshes its price index “continuously” so you can be notified when a price drops usually within the hour.
Read more about finding the best prices on everyday neeeds

Obama plan would ensure companies establish employee IRA accounts

Financial insurance for retirement can take many forms. Whole or Universal Life insurance policies and annuities can build actual cash value for those golden years.  It’s a  good thing, too. Most small business workers have employer-sponsored retirement options that range from slim to none.

Under the proposed federal budget plan from the new Obama administration, employers that don’t offer a retirement plan would be required to enroll their workers in a direct-deposit IRA account.

This requirement is one step in Obama’s goal of creating a system of automatic workplace pensions apart from Social Security. Employees at businesses that do offer retirement plans would be automatically enrolled in them, with the ability to opt out if they choose. The automatic enrollment feature would significantly increase the number of low- and moderate-income workers who save for retirement, according to the Obama administration.

About 75 million workers – most of them working for small businesses – lack access to an employer-based retirement plan.

Under the Obama proposal, small businesses that don’t offer retirement plans would not be required to contribute money to their workers’ IRAs, but they would have to set them up and link them to their payroll systems. Opponents claim that will cost some money and pose an additional burden for small businesses. Your future is on the line.

One of the Winners in Today’s Economy: Wal-Mart

Not all is dark and gloomy in today’s economic environment.

Wal-Mart has announced that comparable sales at its US discount stores and Supercenters jumped 5 per cent in February, continuing its dominance of the faltering retail sector.

The world’s largest retailer also raised its annual dividend by 15 per cent to $1.09, as it continues to pile up cash at a time when many other leading US companies are cutting back on dividend payments to conserve liquidity.

The retailer said its February sales were supported by increased customer traffic, with continued strength in its grocery, health and entertainment businesses. It also said that it saw sales growth in home furnishings – a category where it had previously struggled.

Read more about Wal-Mart's success

AIG Agrees to Break Itself Up

The Financial Times reports that AIG will announce a radical plan to break itself up after 90 years as a global insurance conglomerate by ceding control of its two largest divisions to the US government in exchange for a $30 billion-plus lifeline.

“We are breaking up AIG but we are trying to do it in a way that preserves value for the taxpayer, the employees and the businesses,” said a person close to the plan, which was revealed by the Financial Times last week.

People close to the situation said the authorities, which already own 80 per cent of AIG, would get a controlling stake of 70-75 per cent in American International Assurance (AIA) – AIG’s large Asian operations – and American Life Insurance Company (Alico), a global life insurance business. The structure is aimed at giving the government a better chance to recoup taxpayers’ money when the two businesses are sold or listed.

AIG will also securitize $10 to $15 billion of cash flow from its US life insurance operations and sell the bonds to the government, insiders said. In return, the government will cancel most or all of the $37 billion it is owed from AIG as part of a $60 billion credit line it extended in November. The authorities will also lower the interest rate on the rest of the loan, saving AIG $1billion a year. And the government will provide a $30 billion standby equity line – a promise to buy preferred shares in AIG – that it can tap if needed.