YouTube is building a new paywall, but it doesn’t mean that everyone will have to start shelling out cash to watch kids slipping off skateboards or cats being cats. YouTube Red rolled out on Wednesday, giving those with money to burn on digital media a premium experience on the iconic website.
Alphabet’s (GOOG, GOOGL) video-sharing site will charge $9.99 a month for YouTube Red. Most clip-culture disciples will continue to consume the site in its original free incarnation, but there are some pretty good reasons to pay up if you have the means and spend a lot of time on YouTube’s site or app.
1. We Are Now Used to Paying for Ad-Free Digital Content
Rolling out YouTube Red at the same $9.99 monthly price point as Netflix (NFLX) may seem risky, but Hulu just introduced a new pricing tier that at $11.99 a month will strip ad blocks from its streams. YouTube is pricing its product competitively, and it’s happening at a time when folks are growing more receptive to paying up for streaming media.
Netflix expects to top 74 million subscribers worldwide by the end of the year. Spotify has more than 20 million premium users for its streaming music platform. The numbers are there.
2. YouTube Content Is Different
Netflix has led the push by premium video services to add original content. Netflix and Amazon.com (AMZN) have won Emmy awards for their proprietary shows.
This has raised the bar in terms of differentiation. If folks are expected to subscribe to more than one streaming service, each one has to have stuff that you can’t find anywhere else. Well, differentiation is what YouTube is all about.
Anyone can upload content to YouTube, something that naturally doesn’t apply to Netflix, Amazon or Hulu. Is a lot of it junk? Sure. However, the site’s good about bubbling up compelling content to the top. At the end of the day, YouTube has more original content than any other platform — and it isn’t even close.
3. Your Time Matters
It’s probably not a surprise that Netflix has become so popular because it offers ad-free content. Cable and satellite television providers that charge substantially more than Netflix even slap commercials on their on-demand content. You don’t want that. You deserve better than that if you’re willing to pay up to go through more content.
If you think TV commercials are bad, just spend a day on YouTube. Many of the shorter clips have ads, and while the ads are often skippable, it can be a hassle to actively select to end some commercials prematurely. The time you save is probably worth more than $9.99 a month, and it will make the overall experience even better.
4. Content Creators Will Make the Most of the New Revenue Stream
There are more than a billion active users on YouTube, and many of them — like me and possibly even you — upload original clips to the site. It pays to be a content creator. My Moonpies channel has let me pocket thousands of dollars over the years. I have more than 15,000 subscribers and am closing in on 4.6 million views, but that still makes me a small fry on the site. There’s a growing number of magnetic personalities generating six figures a year through the site’s ad-sharing platform.
YouTube Red will give them a new way to cash in. It remains to be seen if it will generate more or less revenue than having ads display on those premium accounts, but diversification is usually a good thing.
5. There Are Perks for Going Premium
YouTube Red isn’t just about the ad-free experience and encouraging creators to upload more content to cash in on the new monetization platform. Folks paying $9.99 a month for the new offering will be able to access Google Play Music for streaming tunes. They also have the ability to save videos to watch offline. That may not seem like much of a perk in these Web-tethered times, but just think about the next time that you’re hitting the road or experience an Internet outage.
YouTube hasn’t fared well in the past when it has tried to offer premium channel subscriptions or pay-per-view streams, but things are different now. It’s the right product at the right time. I signed up for the free one-month trial of YouTube Red on Wednesday. You will probably do so, too.
It’s a dirty trick of modern life: escaping disease and accident to live long — only to run out of money before the end.
With the withering of old-fashioned pensions combined with longer lifetimes and baby boomers flooding into retirement, the insurance industry is churning out a raft of new, deferred-income annuity products to provide guaranteed income later in life for a big payment upfront or over time. And new government rules allow investors to buy these products with money built up in tax-favored accounts, such as IRAs and a 401(k).
DIAs seek to overcome drawbacks in “longevity insurance,” which has been around for decades without catching on.
Along with their cousins, immediate-income annuities, which start smaller payouts immediately after purchase, DIAs can provide dependable retirement income for life.
“Go back a generation or two. Did anybody not like having a pension?” says Douglas Dubitsky, vice president of retirement solutions at The Guardian Life Insurance Company of America. “We are saying, ‘Well, you can create that yourself.'”
DIAs “are a good thing,” says Anthony Webb, senior research economist at the Center for Retirement Research at Boston College. “They enable households to insure [against] the risk of living exceptionally long.”
DIA sales are up. LIMRA International, the insurance trade group, says DIA sales reached $2.7 billion in 2014, up from about $1 billion in 2012. That’s still a minuscule share of the multi-trillion-dollar financial services market, but many experts expect sales to continue growing as consumers catch on to the new offerings.
The old-fashioned longevity policy, which is still available as a plain-vanilla DIA, is simple. For example, you could spend $100,000 to buy a policy at 65, and 20 years later start receiving an income as high as $50,000 to $60,000 a year. The high payout is possible because the insurer has that 20-year “deferral period” to grow the initial $100,000 before payouts begin, and because many policyholders will die before they receive much income, if any. Once spent, the premium is gone for good.
Old-style longevity insurance never really caught on, largely because consumers didn’t like giving up that big upfront payment for an income stream they might never receive.
In the past few years, insurers have addressed these concerns by offering optional features to allow the income to start earlier — at 65 in many cases. With add-on features, the income stream, once it begins, will rise with inflation. Other features allow joint coverage for a couple, and some return the premium to survivors if the policyholder dies before payouts start, or before income received equals the initial premium. Providers say many people are purchasing DIAs in their 40s or 50s, with payouts to begin in their 60s or 70s rather than 80 or 85.
“We have a lot of clients who think of it as a health care coverage possibility” for old age, says Liz Forget, executive vice president of MetLife Retail Retirement & Wealth Solutions.
Add-ons, of course, come at a price: a smaller payout. One firm, for example, offers a 64-year-old man $55,584 a year at age 85 for a $100,000 premium. Add a feature to return the premium to heirs if the policyholder dies early, and the payout falls to $36,228.
Among the add-ons, premium return has proved the most appealing to purchasers, says Chris Blunt, president of the investments group at New York Life Insurance Co. Inflation protection, which can reduce the payout substantially, has less appeal, being adopted by only about 10 percent of policyholders.
That shows many consumers have things backward, Webb says. “Inflation protection is expensive but probably worth it. Return of premium is definitely not worth it.”
Annuities generally have fees associated with them that make them more expensive than comparable mutual funds or [exchange-traded funds], and this negates any advantage in many cases.
That’s because the whole idea is to insure against the risk of living a long time. If you die soon after buying a policy, you won’t face that risk, but live a long time and inflation can chew up the buying power of your DIA payout.
DIAs have their critics, too. DIA critics typically worry that policies are hard to understand and that not enough policyholders will live long enough to make them pay off. David Weinbaum, associate professor of finance at Syracuse University, warns of costs embedded in DIA-payout calculations.
“Annuities generally have fees associated with them that make them more expensive than comparable mutual funds or [exchange-traded funds], and this negates any advantage in many cases,” he says. “In other words, they are just too expensive for what they are, and most investors would be better served in traditional low-cost index funds. I would recommend that most people not invest in annuities at all.”
Experts who do recommend DIAs generally say a purchase shouldn’t exceed 10 to 30 percent of one’s retirement assets.
In July 2014, the U.S. Treasury department issued new rules permitting DIA purchases with IRA and 401(k) assets, in a “qualified longevity annuity contract,” or QLAC. This allows investors to tap what for many is the largest or only source of retirement funds. And the rules also allow the policyholder to wait until age 85 to begin taking required minimum distributions that IRAs and a 401(k) normally require after age 70½. The maximum QLAC purchase is $125,000, or 25 percent of IRA and 401(k) assets, whichever is smaller. (Note that if your 401(k) does not offer a DIA, you would have to first transfer the funds to a rollover IRA, which cannot be done until you have left the employer.)
These new rules are gradually being reflected in product offerings. “Advisers are very interested,” Forget says.
While a DIA can be a useful tool, experts say that these days, some potential customers are holding off in hopes that higher interest rates over the next few years will make DIA payouts more generous.
Blunt says it’s true that premium pools largely hold interest-paying securities likecorporate bonds. The more the insurer earns on the pool, the more likely the firm will offer a larger payout for a given premium. “If you had a sense that rates were going to skyrocket in the short term, then you are better off waiting,” Blunt says.
But he and other experts argue that what would be gained from a modest increase in interest rates could be more than offset by the payout cut from shortening the deferral period by waiting to buy.
“Most of the time, the people who have been waiting [to purchase a DIA] got crushed in the last six or seven years,” Blunt says. Some DIAs offer a recalculation option or dividend payment to counter the effect of rising rates. And Dubitsky suggests buyers make several DIA purchases over time to improve odds of benefiting from higher rates later.
For those who live long enough, a DIA can be a good investment, as the payout relative to the premium far exceeds what can reasonably be expected from bonds, or even stocks. It would take a double-digit investment return for a $100,000 nest egg to grow enough to spin off $50,000 a year after 20 years.
A DIA purchase should be considered carefully, as payouts and other terms can vary considerably between providers. Many major life insurers offer DIAs. Online services like WebAnnuities Insurance Agency provide quotes, and financial services firms like Vanguard and Fidelity offer plans from multiple insurers. But before buying, it may be worthwhile to talk to a trusted insurance broker who can evaluate products from a variety of providers.
Daylight saving time ends at 2 a.m. Sunday, giving back the hour that seemingly was taken from us in the spring.
For most of us, it’s time to fall back this weekend. In addition to moving the clocks in your house back one hour before you go to bed Saturday night, use the end of daylight saving time as a reminder to check a few things around the house. After all, you’re gaining an hour, why not put it to productive use?
Here’s how to allocate your extra hour to get the most peace of mind, and bang, for your buck.
1. Smoke detectors: 10 minutes. The most important batteries in your house are those that power your smoke and carbon monoxide detectors. Even if they appear to be OK, replace them. But if those batteries are still good (because you changed them when daylight saving time began March 8, they probably are), don’t toss them, save them for less critical household items like flashlights and TV remotes.
Did you know smoke detectors also expire? Check yours for an expiration date. If it’s past its useful life, replace it. And speaking of fires …
2. Home inventory: 20 minutes. When was the last time you made a list of all the things in your home? If your house burns down or is otherwise destroyed, a home inventory will be the most valuable thing you have left.
The ideal home inventory is a list of everything you have, along with the date you bought it and purchase price. If you lose all your possessions, you’re ready to simply hand your list to your insurance company and get reimbursed. But if creating such a detailed list sounds onerous, at least walk through each room in your house with a video camera (even some smart phones will do) and create a video of your stuff, reciting the price and purchase date of the expensive items. Then you’ll at least have the ability to create a list should the need arise.
Don’t forget to store that video away from home, online would be ideal. If you’d like to use free software to create a more thorough inventory, you can get it from the Insurance Information Institute by clicking here.
While you’re at it, here are tips to secure important paperwork and documents in the cloud.
3. Furnace filter: 5 minutes. You should be checking/changing your furnace filter every month. Clean filters can reduce heating costs by 10 percent, not to mention preventing expensive repairs. But if you haven’t checked yours in a while, do it now. And keep doing it the first Saturday of every month from now on.
You’ll find more simple things you can do to reduce energy costs and stay cozy in16 Ways to Prepare Your House for Winter.
4. Retirement plan review: 10 minutes. It’s been said many times: Most families spend more time planning a vacation than planning their retirement. Pull out your most recent 401(k), 403(b), IRA or any other retirement account statements: Do you have enough exposure to the stock market? Too much? One rule of thumb is to subtract your age from 100 — that’s the percentage you should have in some kind of stock fund. So if you’re 35, you’d have 65 percent of your retirement savings in stocks. If you’re 80, you’d have 20 percent.
But remember, this is a rule of thumb, not a rule. Do what makes you comfortable.
5. Insurance review: 15 minutes. Insurance can consume up to 9 cents of every dollar you spend. So it makes sense to ensure that you’re getting your money’s worth. You likely have (at least) four types of insurance: car, home, life and health. Pick one type every six months and make sure you’re getting the best possible deal. There are plenty of places to compare insurance rates, includingour insurance shopping tool. So pull out a policy and see if you can do better for the same coverage.
The simplest way to save on most insurance policies is to raise your deductibles to the highest number that you can comfortably afford. Remember, the purpose of insurance is to prevent financial catastrophe, not financial inconvenience. As I’m fond of saying, if you insure yourself so that you’ll never lose a penny, you’ll never have a penny to lose.
If you did everything in the above list within the allotted time, you’ve accomplished some important stuff, and because you gain an hour this weekend, it theoretically took no time at all!
On the other hand, if all that seemed too ambitious and you end up simply spending an extra hour in bed, don’t feel guilty. It’s all good. But when you get an extra minute or two, do these things: It’s truly time well spent.
To some, few things are scarier than investing in a 401(k) or IRA.
Generation Y has already lived through two bear markets and had their job prospects shaped by the Great Recession, and Generation X watched helplessly as their stock investments plummeted by 40 percent during that recession.
And among people 55 and older, nearly 29 percent don’t have retirement savingsor a traditional pension plan, and many rely on Social Security, according to 2015 analysis from the Government Accountability Office.
But calculations show that those who start saving $2,000 a year at age 35 with an average annual return of 8 percent may only amass around $245,000 by retirement — an amount that likely won’t go too far 30 years from now, considering how prices rise.
“Pension systems are few and far between in the public sector. We are not sure what the Social Security system will look like in the future. The ability to successfully retire will solely be based on the financial decisions you made during your working years,” says Brian White, a financial adviser at Mandell, White & Associates in Melville, New York.
Putting aside money for retirement is so important that Illinois is creating a savings program that requires companies with at least 25 employees to automatically transfer a set amount from employees’ pay to a Roth IRA unless a worker opts out.
Regardless of your skittishness, you need to find a way to take care of your 80-year-old self someday. Here are a few considerations that can chase your investment fears away.
Regard the pain of loss as inevitable, but temporary, before a rebound. Some people remember pain more than profit. Investors may have gotten nervous when the average employee retirement account shrank from $91,864 in 2010 to $87,668 in 2011. But they may have missed it when balances plumped up to $119,804 in 2013 — an increase of more than 30 percent from 2010, according to numbers from the Employee Benefit Research Institute. In those years, the median Roth IRA grew more than 51 percent, and traditional IRAs grew 28 percent.
“We are going to have bear markets, and you are going to lose money at some points; It’s just a question of whether you have the stoicism and education to know the pain is temporary. You have to be ready to withstand it if you’re going to reap the benefits in the long term,” says Jesse Mackey, chief investment officer of 4Thought Financial Group, based in Syosset, New York.
If you hate risk, you can reduce it. Generally, the younger you are, the more your portfolio can take risks and the more stocks you can be invested in, as opposed to bonds and cash. The theory is that you won’t need your retirement fund while you’re in your 20s, 30s and 40s, and the stocks carry the highest rate of return despite being more volatile.
As you get older, you should change the ratio to maybe only 50 percent stocks, Mackey says. And, in case of a crash, you need to have the time to allow your investments to rebound, “You should expect to have to hold a portfolio for 10 years-plus.”
But let’s say you want to put aside money for a college fund without the risk. Consider investing in bonds that will mature when you need them to, Mackey says. “You can take a portion of a portfolio to do this. You can use individual bonds that are laddered to when you want them to mature.”
Diversify not just by asset type, but also by method of investment.Different approaches work for different markets. In down markets, more active approaches tend to excel. Liability-driven investing, typically used by very large institutions like banks, insurance companies or public pension funds, transfers risk by finding assets to offset it. Selective or concentrated investing, used in private equity funds, focuses on the stocks they hold. Index funds should be a large piece of any investor’s portfolio, but they tend to do best in bull markets, with asset prices rising and relatively low investor anxiety in the marketplace, Mackey says.
“Consider including an opportunistic or tactical element within your broader strategically allocated portfolio that will potentially be able to defend against or capitalize on volatility and market slides. This will require professional assistance or the purchase of a specialist fund,” he says.
Take the free money. If you’ve got a 401(k) with an employer matching a percentage, consider it free money. “At a minimum, you should take advantage of the full match. For example, if your company provides a dollar-for-dollar match up to the first 4 percent, you should contribute at least 4 percent,” White says.
Let’s say you’re making $40,000 and your employer offers you a match of 4 percent of your salary. That would likely amount to $1,600 in free money by the end of the year.
It’s a no-brainer, yet leaving money on the table is more common than it seems, with Americans likely leaving $24 billion in unclaimed company-match dollars each year, according to a 2015 research report by the workplace financial advisory services firm Financial Engines. Overall, one out of four employees doesn’t avail themselves of matching funds, with the typical employee leaving $1,336 of potential “free money” on the table each year, according to the report.
Think of compounding interest like a windfall. Compounding interest, which means you will earn interest on your interest, accrues much faster than stuffing money in your mattress. “Start with a penny and double it every day; in 28 days, you will have $1 million. So even saving a small amount every paycheck will make a big difference over time,” White says.
The younger you are, the more time your money has to compound before you retire. One example of this is if your relatives placed $100 in a trust fund for you in 1927, at the average rate of return of the stock market. Seventy years later, that money would grow to $263,000, according to economic writer Stephen Moore.
Online investment calculator tools can tell you how much you will need to put away each month to likely reach your retirement target. If you start saving $2,000 per year at age 25 at an 8 percent annualized return, you’d have $560,000 — more than double what you’d have if you start saving 10 years later.
Of course, you should always check out the fees associated with the funds, because a fee of 1 percent can quickly chip away at a 3 percent return. You also want to see how well your fund performed by checking out its performance and ratings. And consider fund managers who have been around two or more years.
Get started as soon as you can. After all, what could be scarier than waking up one morning with less than 10 years until retirement, and with no retirement savings?
Groceries, car payments, the mortgage, clothes for the kids.
If you’re like most families in America, that’s just a fraction of what you need to take into consideration when mapping out your monthly budget.
And these days, unless you or your spouse is commanding a high salary, the idea of stretching one paycheck to cover an entire family can be daunting.
Still, some folks — more than you may think — are finding crafty ways to make it work. Here’s just how many more: According to a Pew report, the ranks of stay-at-home moms are on the rise, with some 85 percent making the choice to care for their families. And being a stay-at-home dad is now almost twice as commonas it was in the ’80s.
To hear firsthand what it’s like to make the leap to single-income status, we asked families across the U.S. to share their stories — and their best money tips.
Our situation is pretty great. Trevin is incredibly close to all three of our boys — most kids only see their father for an hour or two at night after work.
Feeding five can be a budget buster, so I buy our most expensive items — like diapers — at Costco. We have the executive membership, in which you get 2 percent back, and that always covers the $110 annual fee.
Our go-to supermarket sends me coupons based on our regular purchases, and I use DealsToMeals.com for alerts about which stores have the best prices that day.
When I cook I always make extra, saving the leftovers to take to work instead of buying lunch. And we only eat out for special occasions.
I also shop at thrift stores and use hand-me-downs — I’ve never had to buy new clothes for my youngest son.
What I love about our life: I’m lucky to have a flexible work schedule, so I go in really early in the morning and come home at 3 P.M. That means I can still bring my kids to doctors’ appointments and take care of things around the house.
Trevin and I also make sure to communicate openly about finances. Each month I put aside $100 for him (sometimes $200 if things are going great), so that we each have our own spending money.
In the future, I’d love to be able to work from home. I have a website, and I do affiliated marketing that brings in a few hundred extra bucks a month. Eventually, I hope it can become a viable source of income.
But, for now, our situation is pretty great. Trevin is incredibly close to all three of our boys — most kids only see their father for an hour or two at night after work.”
The dynamic in our relationship was awkward at first — even though Jen staying home was a mutual decision, it felt a little ‘Leave It to Beaver.’
One area was eating out. We were spending $200 to $400 a month on lunch, and another $200 on dinner. Now I pack my lunch, and we have a monthly $50 date night.
We also watch our frivolous spending. I was always an early adopter of gadgets, but I’m no longer the first or even second person to have the latest iPhone. I choose my purchases carefully, and think about the long-term.
For Christmas we realized we’d been shelling out upward of $1,000 on our kids — some of which has gone unused. So this year we set a limit of $100 per child. We’ll put the savings toward a family cruise.
We’ve also been able to save on home improvement costs, since Jen has tackled some projects during the day, like painting, landscaping and refinishing furniture.
And I’ve started doing consulting on the side, which has bumped my overall earnings to nearly $100,000.
I do design work or write content for a client after the kids are in bed, early in the morning, and on Saturdays. The income from 20-plus hours of weekly consulting goes toward savings and big-ticket items.
What I love about our life: The dynamic in our relationship was awkward at first — even though Jen’s staying home was a mutual decision, it felt a little ‘Leave It to Beaver.’
Her role is to take care of the kids, have dinner ready and clean up afterward. My role is to provide income for the family. But, overall, we’re happy with this setup.
Still, I want to work toward increased financial independence so that we can ramp up our savings and take more vacations. With that goal in mind, now that my youngest is in kindergarten, we’re looking to build a home-based business for Jen helping people plan weddings on a budget.
Ideally, she’d be able to make money, while also being available to pick up our kids from school, help with homework and take them to playdates. That was my experience growing up, and we’d love for them to have that too.”
‘We Made a Cost-of-Living-Based Move’
Who: Sarah Gumina, 42, president of Sarah Gumina Public Relations, Conifer, Colorado.
“When I got pregnant with my daughter in 2007, my husband, Joe, and I were living in Southern California.
I was climbing the ladder at a PR agency in the entertainment field, and he was working with special needs kids at a middle school.
We looked into child care options, but the cost was the same as Joe’s salary. He always wanted to be a stay-at-home dad, so he jumped at the chance to do so.
Our single salary secrets:Bringing in the income for the whole household has been stressful. For example, if a client was upset, I’d get really nervous about the possibility that they’d jump ship. I never used to let that kind of thing get to me, but there was so much riding on my salary.
I think it has been a great experience — and sets an example for our kids that women can be breadwinners and dads can change diapers.
In 2011, when I was on maternity leave after my son’s birth, a major client left the agency — and we had layoffs. I lost my job a month after I returned to work. As a family, we were in a really tight financial position.
I started doing freelance work, but it took us two years to recover to the point where we felt stable. Even now, as the owner of my own PR company, my income fluctuates.
So we learned to be very frugal. Our vacations are never farther than a two-hour drive, and we stay in condos that friends let us borrow.
We also signed our kids up for a co-op day care, where parents take turns working once a week to keep costs down.
But the biggest budget game-changer was the fact that we moved to Colorado and bought my childhood house from my parents for less than $300,000. Our mortgage is half of what we spent renting in California, and the cost of living is generally cheaper.
What I love about our life: Despite our efforts, we’re still living paycheck to paycheck, and don’t have a huge amount in savings. This has occasionally led me to make difficult decisions, like taking on a lackluster client for the money.
Joe always planned to go back to work eventually, and now that our youngest is in kindergarten, he just started as a special ed paraprofessional at our kids’ school. His income will go to savings and health insurance.
One of the biggest challenges was dealing with some of Joe’s macho guy friends, who would make backhanded jokes about him being Mr. Mom. It didn’t affect our relationship, but I got tired of defending him all the time.
Still, I think it has been a great experience — and sets a terrific example for our kids that women can be breadwinners and dads can change diapers.”
Ah, retirement. That second honeymoon you’ll spend lounging around with your main squeeze. Which is who, exactly?
While about 60 percent of men want to hang with their wives during retirement, only 43 percent of wives agree, according to a survey from Fidelity and the Stanford Center on Longevity.
Instead, 70 percent of women cite quality time with grandkids as a big motivator to retire. The survey draws on responses from those ages 55 and up — and as workers get older, turns out the idea of spending retirement with a spouse loses more of its luster.
Could that be encouraging some employees to stick it out at the office well past 70?
Another thought-provoking survey finding is that about half of Americans plan to stop working on a specific date — no matter how much they’ve saved up for retirement.
They’ve got big plans that involve, well, not really needing to plan anything. Almost 75 percent of respondents expressed that the No. 1 reason for retiring was to have freedom and flexibility, even to simply relax at home.
And if they do take on a side gig or two, 61 percent say it’s because they enjoy doing the work and want to feel valued.
Or, just maybe, it’s a welcome break from spouse overload. Right, retired wives?
If you’re looking to get on the same page as your significant other, here are sometips for talking retirement dreams — and finances.
Same sex couples who are married can purchase a family health insurance plan without being concerned about any restrictions.
The landmark Supreme Court case that legalized same sex marriage in June, Obergefell v. Hodges, paved the way for consistent insurance options for married same sex couples.
“This provided same sex couples with the same access to family health insurance as heterosexual couples and uniform access from one state to another,” said Nate Purpura, vice president of consumer affairs at eHealth.com, an online health insurance exchange based in Mountain View, California.
The Supreme Court ruling protects against discrimination and insurance companies must offer the same coverage for both same sex and opposite sex spouses, according to Healthcare.gov.
“This is true regardless of the state where: the couple lives, the insurance company is located and the plan is sold, issued, renewed or in effect,” the website says.
Married same sex couples can also qualify for subsidies, which lower the amount of their monthly premiums, making them more affordable and accessible.
“Like other married couples, married same-sex couples who file taxes jointly may be eligible for government subsidies, if they meet the income requirements of the Affordable Care Act,” Purpura said.
Moving to another state is no longer an issue with the Supreme Court ruling and couples can buy comparable coverage in another state.
Is Family Coverage the Right Option?
In many cases, seeking family coverage saves people money on not only monthly premiums, but also deductibles. With most plans, you typically “share a family deductible equivalent to two individual deductibles,” said Purpura. “If you have children and hence have three or more persons on your plan, you can potentially save a significant amount of money in terms of your annual deductible.”
It may make more sense to cover your dependent spouse on an individual plan of his or her own.
Depending on the coverage offered at your company, family coverage may not prove to be the best financial decision as individuals determine what plan to purchase since open enrollment began on November 1. Some employers will pay a larger share of your health insurance premium but offer little for your dependents. In these instances and similar to many heterosexual couples, you might determine that it is better to have separate individual plans financially, he said.
“It may make more sense to cover your dependent spouse on an individual plan of his or her own,” Purpura said.
Only couples who file their taxes together can qualify for subsidies. The government subsidies help lower the cost you pay each month for health insurance and married families with household income of 400% of the federal poverty level or less may qualify for them. In order to qualify, the federal tax return must be filed as “married filing jointly.
Companies don’t need to ask employees for documentation of a domestic partnereither in civil unions or registered domestic partnerships in order to be eligible, said The Human Rights Campaign Foundation, the Washington, D.C.-based lesbian, gay, bisexual and transgender civil rights organization.
“The Human Rights Campaign Foundation encourages employers to treat all beneficiaries equally when requesting documentation to determine eligibility,” said the civil rights organization. “In other words, documentation should not be required of partners if it is not required of spouses.”
Domestic partner coverage for couples who aren’t married might be facing the possibility that it might be phased out in the future. Some state and federal entities are reconsidering the domestic partner laws or policies which existed before the Supreme Court ruling that gave same-sex couples access to coverage.
“To learn more about your options, contact your state’s department of insurance,” Purpura said. “If you’re in a legal same-sex domestic partnership, you may need to get married in order to keep your family covered under a family health insurance plan.”
What the Previous Health Insurance Market Was Like
Before the ruling in June, same sex couples faced a myriad of inconsistent policies when they were choosing health insurance options. Moving to another state often meant even more confusion and headaches, depending on whether same sex marriage was legal.
“There was a patchwork of laws and regulations that often varied significantly from one state to the next,” Purpura said.
When couples lived in states that already deemed same sex marriage as legal, married couples could purchase family health insurance plans like heterosexual couples. In a state where legal same sex domestic partnerships were recognized, but not marriages, often family health insurance plans were also made available.
Residing in a state without any recognition for same sex domestic partnership or marriage, finding a family health insurance plan was nearly impossible unless the insurer or sponsoring employer chose to offer the coverage, he said.
Moving meant many couples lost their coverage for health insurance, leaving them vulnerable and at risk of having no coverage, putting them at greater risk financially.
The typical retirement dream involves riding off into the sunbelt, golf clubs and beach umbrella in hand. However, the reality is that the majority of retirees never leave home. Most people opt to age in place, or if they do move, they find a smaller house near their old neighborhood.
Only about 7 percent of older Americans move every year, according to a long-term study by the Center for Retirement Research at Boston College. And even though more people have recently been relocating with the improving economy, an AARP survey found that most people approaching retirement hope to remain in their current residence as long as they can.
Here’s why retirees resist the siren call of the beach and tropical breezes:
Home is where the heart is. Many people feel attached to their home towns. Whether they grew up there or moved there to raise a family, they still enjoy going to the park where they took their kids as toddlers. They feel comfortable knowing about the best hardware store and the best pizza place. Many old-line suburbs have developed programs and amenities for their older population. Another benefit: urban centers in the north provide better public transportation than the retirement meccas of the sunbelt. There’s no subway in San Diego or T in Tampa.
Home is where your friends are. You go to the library and see familiar faces. Maybe you belong to a book club, or regularly meet friends for lunch, tennis or golf. All the research says that a strong social network is crucial for successful aging. Friends not only supply emotional support, but sometimes offer practical benefits like loaning you a book or DVD, helping with a project at home or giving you a ride. Why should you uproot yourself, move a thousand miles away and then be faced with the sometimes difficult challenge of finding a new group of like-minded friends?
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People retire in the last place they land.Some people never settle down to live in one place for 20 or 30 years to raise their kids in a single community. Many baby boomers have moved around for work, or just because they’re restless, and then finally put down roots when they’re in their 40s or 50s. For example, my sister-in-law grew up in New Jersey, then moved to Michigan, Texas and finally in her late 40s settled down in Pennsylvania. She’s pretty adamant that she’s not moving again.
You don’t necessarily save much money. It costs a lot to move. You give up about 10 percent of the selling price of your house in real estate commissions, legal fees and taxes. Then there’s the cost of buying, moving and resupplying your new house. If you’re moving a long distance there are additional expenses involved in traveling and researching your new location. You might need to rent for a while or store some furniture. It’s not worth it if you only save a couple thousand dollars a year in your cost of living.
It doesn’t have to cost a lot to age-proof your home. Of course you can spend a lot of money if you want to remodel your entire house. But many of the safety issues involved in age-proofing a home involve modest expenses. Improve the lighting in stairways and outdoor areas. Change out doorknobs for lever handles that are easier to manipulate. Install bathroom grab bars and raised toilet seats. Get rid of scatter rugs, and put down colorful traction strips on the front edge of your stairs to help prevent falls. None of these changes costs much money. Depending on the layout of your home, it may even be possible to turn a study or den on the first floor into a master suite, converting the upstairs rooms into guest quarters.
Visit a virtual village. Virtual retirement villages can help seniors access resources to make it easier to age in place. A virtual village is a local non-profit organization that posts information online, providing referrals to member-recommended service companies and volunteers available to help out with dog walking, yard work and other homeowner needs. Some villages host social activities such as concerts, restaurant gatherings and group trips. Check outVillage to Village Network to find out more information on what villages do and how they work.
When Victoria Scipione has to pay back friends after a weekend getaway, she pulls out her phone and uses the Venmo app. Since it’s linked to her bank account, she can quickly reimburse them for anything from dinner to Uber. “I’m extremely guilty of not always carrying around cash, and when I go out to dinner with friends we usually split the bill — that’s when Venmo comes in handy,” says Scipione, 23, a communications coordinator in New Jersey.
Venmo is one of the many new tools that make it easier than ever to reimburse friends and family. Choosing the right one for you often comes down to personal preference and needs — whether you’re moving funds domestically or overseas and your reason for sharing money in the first place.
Scipione says she’s drawn to Venmo largely because all her friends have the app, too. “When I think of PayPal, I think of my parents,” she says. Her generation, she adds, tends to prefer the social aspect of Venmo, which makes it easy for users to send each other friendly notes about payments, almost like texting. (Venmo is part of PayPal and charges a 3 percent processing fee per credit card and some debit card payments; receiving the funds is free.)
PayPal is also offering a new-and-improved service, called PayPal.Me, which launched in September. Users can create a personalized link they can share with others to collect payments. Sending money to friends and family within the U.S. is free if it’s done using a PayPal balance or bank account. If it’s done using a debit or credit card, there is a fee of 2.9 percent plus 30 cents, paid by either the sender or recipient.
People were looking for a quick and easy way to collect money for group payments.
“People were looking for a quick and easy way to collect money for group payments,” says Meron Colbeci, senior director for global consumer product management at PayPal. “People find collecting money to be very awkward, and by giving a link right there in the email or text message, it hopefully reduces that awkwardness,” he adds. A PayPal Money Habits Study of 4,000 consumers released earlier this year found that, on average, adults owe friends almost $450, but many people said they were afraid to ask for reimbursement because they felt uncomfortable doing so.
Because of the trend toward digital payments and away from cash, the need for easy exchanges between friends is growing, Colbeci says. “Down the line, cash will be a very small portion of the overall wallet,” he adds.
In September, Google announced the Google Wallet app, which allows users to send money for free to anyone within the U.S. using an email address. While Google is rolling out different features, the app is currently available on Google Play and the App Store.
Blended families exchanging child support payments often have specific needs when it comes to money, and that’s where the payment platform SupportPay can help. Founder Sheri Atwood says that as the child of divorced parents and who is now a single mom, she saw the need for making easier payments. “My parents constantly fought, and it seemed like everything they cared about was about money,” she says. She was determined to have a more amicable divorce, but she still found it hard to track the multiple payments and expenses shared between her and her ex-husband. “I was a single mom and now a debt collector,” she says — and that latter role is not one she wanted.
SupportPay, which is currently used by 30,000 parents, keeps a record of support agreements as well as payments and receipts. “It’s like an expenses management system,” she says. It also assures the parent paying child supportthat the money goes toward the child’s expenses and not the other parent’s lifestyle. SupportPay, which has a free version as well as a premium version that is $19.99 a month, also handles notifications and billing, so divorcees don’t have to make requests of their exes.
For those exchanging money with people overseas, TransferWise aims to reduce costs associated with bank exchange rates. “Twenty percent of people in the U.S. will need to send money abroad at some point in the year, whether they’re paying friends or family abroad or booking travel,” says Joe Cross, U.S. general manager of TransferWise. “It’s incredibly expensive and hard. We’re trying to do what Skype did for international calling,” he adds, which is to keep it simple and cheap.
TransferWise works by finding a counterpart in Europe, for example, who wants to send money to the U.S, so the dollars go to that recipient and the money stays in the country of origin. That way, paying exchange rates can be avoided. After the launch in the U.S. about a year ago, customers have already used TransferWise to transact around $4 billion. The company charges a small fee, typically 1 percent, to handle the transaction. “We believe it should be as close to free as possible,” Cross says.
Banks are also joining the friend repayment party: Chase launched QuickPay in 2009, making it one of the first banks to launch its own “person to person” payment service, according to company spokeswoman Lauren Francis. Customers can access QuickPay through Chase apps or the website, and they made 30 million transactions on mobile devices in 2014, an 80 percent increase from 2013.
After comparing the perks and fees of each tool, you can pick the one that makes the most sense for you — and reimburse your friends for that fun night out.
Health insurance costs are creeping ever higher. The Kaiser Family Foundation reports that average premiums will rise 5.1 percent in 2016 for the lowest-cost marketplace silver plans available to a 40-year-old nonsmoker earning $30,000 a year in 14 major cities. The increase will be lower for people with tax credits, but could still represent a significant jump in the monthly bill.
While there aren’t as many clear discounts for health insurance as there are forauto and renters insurance, there are ways to save. Here are seven tactics that can lower health insurance costs.
Increase the deductible. Health insurance premiums correspond to the plan’s deductible; that is, the total amount you must pay for care before insurance kicks in. Increasing the deductible can be risky — in a serious emergency the amount due can climb quickly, leaving you on the hook for hefty out-of-pocket expenses. Still, this might be a reasonable choice if you’re not concerned about the cost of routine care (which counts towards the deductible) and have funds set aside to cover a major illness or emergencies.
Choose an insurer with phone-in consultation. For someone who is generally healthy, a plan with a high deductible and a phone-in service might be a good option, says Eric O’Brien, president of Mosaic Employee Benefits, a multistate independent broker. Teladoc, for example, lets plan participants call or video chat with a doctor at any time for diagnoses of minor ailments and prescriptions. In some instances this is cheaper than visiting a doctor or emergency room. Consultation costs vary by telehealth provider but typically settle around $35. The fee may be lower for people with a monthly or annual subscription.
Pick a narrow-network plan. Save on premiums by choosing an insurance provider that maintains a skinny, or narrow, network in the region. In other words, the insurer may be a large, even national, company but includes only one or two medical centers in its local network. Premiums may be lower than plans with more in-network hospitals and physicians. If you want to stick with your primary care physician, first check to make sure he or she is in the narrow network before opting in.
Adjust income to be eligible for tax credits. People who buy health insurance through the government marketplaces may be eligible for tax credits depending on their “modified adjusted gross income” and family size. The lower the income, the more credits are available. You can decrease adjusted income byincreasing tax deductions. One of the easiest ways to do this is by contributing to a retirement plan — either a 401(k) or 403(b) plan through an employer or a traditional Individual Retirement Arrangement on your own.
Quit smoking. Using tobacco (cigarettes, cigars, snuff — or just plain chewing it) for anyone who buys health insurance. Marketplace plans may charge tobacco users up to 50 percent more than nonusers. Quitting comes with other financial benefits, as well. In addition to not paying for the tobacco products, premiums for life, renters, and homeowners insurance may be lower for nonsmokers.
Look beyond the exchanges. Instead of limiting your search to HealthCare.gov or state-run marketplaces, try direct shopping with insurers or compare options on a private exchange, such as eHealthInsurance or GoHealth. Prices may not be lower for identical plans, but you might find a plan that isn’t listed on the government exchange and fits your budget better. An added benefit is follow-up convenience: If there are any administrative or billing problems, they can be resolved directly with the insurer rather than having to work through the marketplace.
Consider a nonprofit health care co-op. An alternative to mainstream health insurance plans is one of the health cooperatives created when the Affordable Care Act passed. Health co-ops are nonprofit insurance organizations governed and owned by their members. A 2013 report by consultants McKinsey & Company found that in 22 states with a health care co-op, the co-ops offered the cheapest insurance plans. Some co-ops are struggling to stay open given lower than expected enrollment rates, but in some places they are a money-saving alternative.