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The Equifax Breach Leaves Seniors More Vulnerable

scam-alertThis past September, Equifax released alarming news that they had experienced one of the largest cybersecurity breaches in history. From mid-May through July of 2017, over 145.5 million US residents were put at risk of identity theft. The criminals responsible for this breach were able to access personal information such as names, Social Security numbers, birth dates, addresses, and driver’s license numbers. Although this breach was monumental, leaving millions of Americans feeling exploited, vulnerable, and in constant fear of identity, Equifax created resources that allowed those affected to take proper measurements to further secure their personal information.

As of recently, there have not been any reported unauthorized activity on any consumer or commercial credit reporting databases. However, in light of this breach, senior citizens need to be on constant alert for scams or fraudulent activity that can occur on their banking accounts. Not only are they vulnerable to financial scams in general, but the Equifax breach could leave them at an even greater risk. Although many senior citizens are highly capable of avoiding financial scams, it’s always highly important for family member or caregiver to look out and protect them as well.

Seniors and Caretakers Working Together to Avoid Scammers

In a survey conducted by the Cooperative Credit Union Association (CCUA)–a trade group based in New England–research showed that more than two-thirds (out of 1,700 people) of caretakers reported that scammers had attempted to target their elderly relatives (Source). Furthermore, the most popular attempt at fraud was through phone calls; however, 22% of those same scam attempts were made through either email or another form of online contact.

In addition to their study, the CCUA found that those same caretakers worry that their loved ones will not have the ability to spot a fraud as efficiently as they can. With the Equifax breach being the newest form of financial fraud, caregivers are worried more now than ever.

As stated previously, 145.5 million consumer credit files were compromised in the Equifax breach. With the two most important pieces of information being hacked and accessed–birth dates and driver’s license numbers–caregivers are growing increasingly concerned. With access to their driver’s license numbers, birth date, and Social Security number, scammers will have full capability to cross-reference their information and begin to target their victims by their age group. Unfortunately, it’s far too often that fraud is detected once it’s too late, therefore, it’s highly important for family members, friends, and caretakers to educate themselves on ways to help their loved ones avoid the risk of falling victim to a financial fraud.

Protecting Seniors From Scams

Here are some tips to protect your elderly relatives from scams and fraudsters:

  1. Talk to them regularly about all of their financial decisions. 
  2. Inform them of ways to handle potential scammers when you aren’t there to do it for them. It’s important for them to have an idea of what to look out for in order to successfully avoid any forms of financial scam; even if it means writing up a script on what they can say to scammers that call them.
  3. Advise them that if they think they are receiving a call that doesn’t seem right, then they need to hang up immediately.

Being educated and helping your loved one become more educated is one of the best courses of action in order to thoroughly protect and prevent any type of financial fraud from occurring to your elderly loved one.

With a breach as significant as the one that Equifax faced, it’s highly important for seniors to be on high alert for any forms of scams that are a result of this massive infringement on the personal information of US citizens.

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Getting Out Of An Annuity

annuity paymentsAn annuity is a form of insurance payment that families can opt to invest in that will provide them with annual payments to sustain them for the rest of their lives. Usually, this is a third party contract between families and the insurance company of their selection.

However annuities are not beneficial for everyone and in many circumstances, families find this out when it’s too late. Unfortunately, this causes a major problem because opting out of your annuity plan can be more costly than what it’s actually worth. So, before you decide to end your annuity plan and contract, be sure you know all of you options and consequences you will be faced with upon doing this.

Ending Your Annuity

Depending on the annuity plan you’ve chosen, it can be very hard to get out of your contract without facing severe financial consequences. However, Michael Green, a financial planner with Wechter Feldman Wealth Management, explains that even though you have a signed contract for an annuity plan, it doesn’t necessarily mean that you are locked in forever; you always have options (Source).

Green also advises that if you are considering investing in an annuity plan, you should really do your research first. One of the biggest reasons that families want to get out of their annuity plan is due to their lack of knowledge of the annuity in the first place. When canceling your plan, your annuity payout option is final, so it’s highly important to make sure the amount you will receive is enough to support you through retirement and then some.

Many families are faced with the issue that their payout is much, much lower than what they are worth and struggle to keep up with their bills–leading to a very stressful and unrelaxed retirement. Ending your annuity can be very tricky and costly since there’s the possibility of a major tax consequence being involved. In many cases where a family wants to end their annuity plan, depending on the type of plan they picked, the could be faced with paying a large sum of money in tax fees. However, if you want to dispose of your annuity plan and your surrender period has expired, you will have the ability to liquidate or terminate your contract without having to worry about those pesky and costly tax fees.

There’s also the possibility of losing out on the benefits such as death and long-term care when ending your annuity plan. So, be sure to you know all the facts before terminating your plan.

Sell Your Annuity Payments For Cash with Rising Capital

If you are attempting to end your annuity but your payout options are significantly lower than what you are worth or what you were originally promised, and you don’t want to pay the thousands and thousands in tax fees, you may want to consider the option of liquidating your annuity. If you do decide to liquidate your annuity, you will have the option to sell it for a better cash-now option. 

At Rising Capital, we can provide you with a lump sum in exchange for your annuity. Contact us today at 1-866-444-5061

 

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How The Powerball Annuity And Lump Sum Works

powerballWhen receiving their money, the very lucky winners of the Powerball have two different options they can choose from. In most circumstances, when collecting their prize, the winners can choose either a lump-sum cash payment or an annuity that makes payments over the course of 30 years. However, when making this decision, winners must be aware that if they choose a lump-sum, they will receive a lower sum of money than what the Powerball originally was.

Of course, like any other financial decision, there are the benefits and the drawbacks to accepting either a lump-sum or an annuity. Lucky for you, we’ve broken down the key concepts behind each option. So, in the event you find yourself a (very) lucky winner of the Powerball, this article will help you come up with the educated decision of which option would work best for you and your family.

Choosing The Annuity

Here’s what you need to know if you decided to go with the annuity option:

In the event the Powerball winner chooses the annuity option, they are opting out of receiving their winnings all at once and instead, will spread out the payments on a yearly basis. Initially, the winners will receive an immediate payment upon winning, followed by annual payments made over a course of 29 years with a grand total of 30 payments. In an effort to maintain the cost of living, each payment will increase by approximately 5% every year. For example, let’s say the Powerball winnings are $83 million and the winners decided to go with an annuity plan that will spread their $83 million in payments made over a 30-year time period. Their immediate payment will be approximately $1,249,269.00 while their payment in the next year will be $1,311,733.00 and so on and so forth. Each year their payment will increase 5% until their payment reaches $5,142,161.00 in the final year, leaving a grand total of $83 million in a timespan of 30 years. The annuity option is also inflation-protected; in other words–as long as you are smart with your finances–the annuity options eliminates the possibility of going into debt. Basically, protecting you from your own frivolous spending.

Additionally, the Powerball annuity payments are marked as “annuity certain” which means that in the event the winner dies before they have reached their 30 allotted payments, the installments will still be made to their estate and their heirs upon their passing.

Taking a Lump Sum Payment

Surprisingly, it’s quite often that we see the Powerball winners choose the lump sum option–a smaller value–rather than waiting for their winnings to be received as yearly installments. It’s understandable, though; not everyone–who’s just won such a significant amount of money–has the patience to wait on a yearly basis to obtain that money. When the stakes are that high, they want their money almost immediately.

With the availability of instant cash, winners have the ability to do what they want with it at any time. This includes the type of investments that many winners may want to consider investing their money with. 

Taxes On Your Winnings

A major factor that most fail to take into consideration is taxes. If you choose the annuity option, you will only be required to pay taxes on the amount of money you receive each year. Whereas with the lump-sum option, winners will be required to pay the taxes off in one whole sum upon obtaining their proceedings. You’ll also have to pay off any taxes that come with investment options such as dividends, capital gains, and interest income each year that you invest. However, many people seem to find this aspect a bit troubling, seeing that it’s not very easy to predict what the federal income tax rate might be; it’s constantly fluctuating.

As you can see, each option has their own set of pros and cons and in the end, it all comes down to what would work best for you and your family in the long run. However, after hearing the endless stories or Powerball winners going broke after choosing a lump-sum option, the annuity plan might just be the smarter option

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4 Things You Should Know About Annuities

annuitiesAn annuity is a contract made between you and an insurance company where, in exchange for a lump sum payment, the insurance company will provide you and your family with long-term care benefits, a source of income, asset growth, and a death benefit. Types of annuities include: joint, individual, impaired life, guaranteed, fixed, variable, immediate, and deferred; the most common being a Fixed Annuity.

However, as enticing as annuities may seem to those who are nearing retirement, annuity payments can be tricky, inflexible, and binding. Nevertheless, for those who have run out of options for IRA and 401(k) funding, annuities begin to look like an appealing option. If you are unfamiliar with annuities and what they offer, then you’ve come to the right place. Here are 4 things you should probably know about annuities before investing in one:

1. Annuities don’t offer tax deductions immediately.

Any annuities that are purchased externally from an IRA are funded through the means of after-tax dollars. In simpler terms, you won’t be getting a tax break right off the bat by investing in an annuity. 

2. Most annuities have early withdrawal penalties

Unless you are faced with a debilitating ailment or pass way, you and your family are not allowed to make early withdrawals from your annuity. If you do, you will be faced with a hefty penalty. Normally, you will be charged with a fine of 10% of your withdrawal amount in the event you take money out of your annuity before your allotted time. The same rule applies to IRA’s and 401(k)’s: if you decided to withdraw money before the age of 59 ½, you will be penalized with a 10% fine of your withdrawal amount.  

3. Things get expensive if you cancel

If you break the signed contract made with an investor and decided to cancel your annuity plan, you will be held accountable for a significant amount of money. This is typically known as a surrender charge and based on the investor you purchased your annuity from, you will be required to pay approximately 7% of your total funds during the first year. The only sure way you can avoid paying a surrender charge is if you decided to cancel your plan during the first 30 days.

Of course, similar to the penalties for withdrawing funds early, there are a few exceptions in which you won’t be required to pay a sum of your money if you cancel your plan early. If you become disabled, terminally ill, or pass away, you or your family will not be faced with fines upon canceling your annuity plan.

4. Annuity withdrawals are partially taxable

Any withdrawals that are made from your annuity will be subject to taxes. However, the taxation rules and process differ from your standard IRA or 401 (k).

In the case of an annuity, you will be taxed in what they call a ‘last-in, first-out’ basis. This means that when you make your withdrawals, your money will be classified as ‘earnings’ and therefore, will be taxed. However, this will no longer be the case when the overall value of your annuity becomes lower than the sum you paid in premiums.

Sell Your Annuity or Structured Settlement with Rising Capital Associates

Annuities can be a very difficult investment to take part in and requires many rules, terms, and guidelines to be followed accordingly. However, there are many people who decide to invest in an annuity and later find that it does not meet their expectations or simply can no longer afford the premiums that are required of them to pay.

If you find that your annuity no longer fits your current needs, sell your annuity payments for cash. We will purchase your unwanted annuity and in exchange, will provide you with a lump sum paid in full! With our services, you won’t ever have to worry about losing your annuity money through the penalties of canceling your plan early. Why wait when you can have your money now?  

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Boost Your Retirement Savings With These 5 Tips

 

retirement-savingSaving for retirement can be difficult for many but it is definitely feasible with the right gameplan.

The following tips can help to put you on the right track towards retirement:

1. Invest in a 401k

It’s advisable to contribute to your 401(k) plan as soon as you are earning an income that will allow you to set aside money.

You should contribute to your 401(k) as soon as your financially able to.

In 2017, the maximum salary reduction contribution to a 401(k) plan is $18,000. You will be allowed to contribute an extra $6,000 to your savings if your 50th birthday is this year.

2. IRA Catch up Contributions

Regardless of whether you have a savings plan for retirement, alternative options are out there that can help you save money. Roth IRAs and IRAs can give you a huge start on saving for retirement. The minimum contribution is $5,500 and increases by $1,00 after age 50.

3. Simple IRA Catch up Contributions

If your company has a SIMPLE IRA, you can contribute a minimum of $12,500  in 2017 and once you are over 50 years old, you can contribute an additional $3,000. Annual adjustments are possible with basic and catch up contributions for SIMPLE IRAs

4. HSA Contributions

This type of contribution is great if you have a high-deductible health plan. This HSA allows you to contribute to a health savings account on a tax-deductible basis. The contribution depends on several factors and varies for every individual based on whether you have self-only coverage or not.

HSA contributions are perfect if you have a health care plan with a high deductible as you can contribute on a tax deductible bases. The contribution is dependant on a variety of factors, and differs for every person based on if  you only have coverage for yourself or not.

5. Social Security Benefits Delaying

At age 62, you can begin collecting social security benefits. You are able to increase the benefits of monthly coverage when you delay the benefits past full retirement.

For example, those at full retirement age (66) who chooses to delay the benefits until they turn 70, will notice an increase in their benefits by 132 percent 

While you are able to collect social security benefits at the age of 62, you can get more benefits if you postpone it til you are older. Delaying benefits til age 70 generally increases those benefits by over 100%.(Source).

 

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Not Saving Enough For Retirement Is The Regret of Many

saving for retirementThere are many things in life that change as we get older.

As we age, our needs, wants, and obligations alter and we eventually retire from our jobs. Although the concept of retirement sounds great, it may be nothing more than a pipe dream if you don’t have sufficient money to fund your it. 

Many people live with monetary anguish and wish that they had better money management skills in their younger years. Not saving for retirement is one of the biggest regrets that retirees deal with. Among Millennials, 11 percent are worried about not saving early enough for retirement while 18% among Gen X are worried about this same thing followed by 39 perfect of Baby Boomers (Source).

Saving Is Never a Bad Thing

Saving money isn’t easy and requires a great deal of discipline. By starting a retirement savings account early on in life, you will have a longer period of time to contribute.

Turning to others, such as family, for financial support can be difficult on both parties involved which is why having a decent savings account is essential in all stages of life, especially retirement.

Once you retire, there are other types of hurdles to overcome. You may have a variety of expenses such as: 

  • Medical bills
  • Assisted care costs
  • A mortgage
  • Cost of a spouse’s funeral
  • Any existing investments

While saving money for retirement is difficult for many, it can be impossible for some due to their salary. According to a recent study, 76 percent of Americans live paycheck to paycheck and 27 perfect of them have no savings at all (Source).

How to Start Saving For Retirement

It’s beneficial to start saving for old age as soon as you can, with the perfect age being your mid 20’s.

Putting aside as much as you can afford, whether that is $50, $100, or $300 a month, will drastically help when you are older. Many times, an employer will assist you with a 401 k match which will become accessible once you retire. Many times, the amount that you can contribute depends on your personal financial situation and you can only put in so much as bills and obligations get in the way.

In order to save, we must be in the mindset that it is not ‘option’, it is mandatory.

Starting to save is the hardest part but once you realize that is it essential to contribute to a savings and retirement account, it becomes easier to put that money aside each month. Remember that starting small is fine and any little bit counts. As your income increases, consider putting more into retirement in order to have a sufficient lump sum come retirement.

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The Common Issues Seniors Face After Retiring

issues-facing-seniorsLife in retirement should be all about relaxing and enjoying the time off you worked so hard to achieve. Unfortunately, many retirees are still faced with financial obstacles.

A study conducted by the CFPB reported that since its establishment, nearly 103,000 consumer complaints were received by those who were 62 years of age and up–from people who were retired. Here were some of the issues they were dealing with:

  • Scams and identity theft
  • Difficulties with reverse mortgages
  • Managing finances after the passing of a spouse
  • Uncertainty with banking charges and fees

Scams and Identity Theft

A common issue many seniors are faced with in their retirement stages are scams and identity theft and more specifically, recovering from them. Quite frequently, seniors are at the receiving end of scams and identity theft due to their vulnerability.

Especially in the case of seniors with Dementia or Alzheimers, many hackers, scammers, and identity thieves label seniors as an easy target. Due to this, seniors have trouble disputing credit card statements that list unauthorized payments. According to a CFPB report, many complaints about credit reports were mostly filed by seniors. Many complaints regarded the inability to rectify the errors on their credit reports in addition to disputing the purchases on their cards that were unauthorized. In many cases, the seniors would convey their concerns with not knowing the correct steps to take in avoiding these types of situations.

Reverse Mortgage Difficulties

A reverse mortgage is a loan specifically for homeowners that are 62 years old and up. It allows them to turn a portion of their home’s equity into cash, eliminating monthly mortgage payments.

In many cases, homeowners will be required to sell their home to the bank in order to attain a reverse mortgage. Since they are still residing in the home, they are required to continue property tax and homeowner’s insurance payments–something that many seniors have a difficult time remembering.

There have been many instances when homes would go into foreclosure due to the lack of payments made for taxes and insurance. Many seniors are under the false impression–due to insufficient explanation–that since the bank owns their home, they are not responsible for those monthly payments which, unfortunately, is not the case.

Another reason seniors have trouble paying taxes and insurance is because their monthly reverse mortgage payment is less than they expected it to be. Sometimes, reverse mortgages are a senior’s main income throughout their retirement, and if those monthly payments are too low, it will prove to be very difficult to keep up with their other bills.

AARP recommends that investing in a reverse mortgage should be considered as a last resort (Source).

Managing Finances After The Passing Of a Spouse

No matter the situation, losing a spouse not only creates an emotional burden but a financial one, too.

The CFPB has reported that many complaints filed are from seniors regarding difficulties with accessing accounts such as their savings, or having trouble locating the necessary documents in order to access these accounts.

Studies have also shown that many seniors who have lost a spouse and have a reverse mortgage face foreclosure because the agreement was in the deceased spouse’s name and loan services took too long to respond to their inquiries.

Uncertainty With Banking Fees & Charges

There have been many instances when seniors have filed complaints regarding an unfamiliar charge on their bank statements.

Quite often, seniors will spot subscription charges that they don’t recognize or recall signing up for. Studies have shown that a vast majority of seniors tend to sign up for ads they see on TV without reviewing over the fine print. Some services may be free for a limited time, but will automatically charge customers upon the conclusion of their free trial. This is something that is generally overlooked by seniors but causes the most confusion and disputes.

One other aspect of banking that seniors have shown difficulty understanding and have filed complaints to the CFPB about are the interest rates credit cards have.

 

It is strongly suggested that the families of seniors do their best to help their loved ones attain a better understanding of financial obligations. Educating your loved ones on topics of finance can help them steer clear of any potential scams and manage their accounts with ease.

 

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How To Avoid Common Financial Scams

avoiding-scamsIf there is one thing that we all try to avoid, it’s being scammed or ripped off.

What is truly troublesome is a scam that would ruin your future retirement and deplete all the money that you have contributed to it. Although we try to be diligent in detecting scammers, whether it is over the phone or via email, many of us still fall victim to it. When it comes to conmen trying to scam their next customer, they tend to target retirees and senior citizens as scammers know that this target audience tends to have a good amount of money in their savings accounts.

Nearly 1 in 5 Americans over the age of 65 have been victimized by financial rip-offs, according to a 2016 study from the Investor Protection Trust(Source).

“Swindlers and hackers pinched $16 billion from 12.7 million U.S. consumers in 2014”, according to Javelin Strategy & Research’s 2015 Identity Fraud Study (Source). That number is enough to want to take major initiatives to protect yourself, your family, and your bank accounts.

The Various Types of Fraud/Scams

When it comes to fraudulent activity, we often associate it with stolen money out of our bank account but there are other types of fraud that does not have to do directly with your bank account.

Contractor Fraud

When your home needs renovations and updates, we usually call a contractor to do the job. A reputable contractor has a habit of overcharging, leaving you paying more money than you should. Some signs that a contractor is trying to rip you off is:

  • Asking for money/cheque up front
  • Entering your house without your permission (to steal)
  • And trying to sell insurance claims to you

Medical Fraud

Sometimes, a doctor can try and lure you in in order to charge you more so that they themselves can benefit from Medicaid.

Other common types of fraud are: reverse mortgage, bereavement, and investment fraud.

Tips To Avoiding Scams

  • Never e-transfer or wire money to someone you don’t know
  • Never disclose your financial information/passwords/logins/pin numbers
  • Don’t open suspicious emails
  • Always use complicated passwords that only you know
  • Install anti-virus programs on your computer

Always be skeptical of who you trust and always try to choose a company that is listed with the Better Business Bureau.

You work hard to save for retirement, so why not do everything you can to ensure that it is safe? 

 

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A Simple Spreadsheet Can Be The First Step Towards Financial Freedom

spreadsheetFor many, early retirement seems like a just another pipe dream. Maybe if you threw in the words, ‘sole heir’ or ‘mega-million winner’ along with it, it would seem more plausible. We understand that money isn’t an issue for some people, but it is for the overwhelming majority. There are so many bills to organize and pay and when you add children into the mix, your expenses only get higher. With necessary expenses such as groceries, water, electric, college funds, cable, and more to consider, the prospects of retirement seem to get farther and farther away. However, early retirement is, in fact, doable and not nearly as difficult as one may think it to be. It all starts with tracking your spending.  

Keeping Tabs On Your Spending

Tracking your spending is the first step to early retirement and financial freedom. If you play your cards rights–instead of playing the lottery–and start tracking your spending religiously, you too will have the ability to save up sufficient funds that will allow you to attain financial independence and if you want, early retirement.

Every time you make a purchase or pay a bill, log it into your spreadsheet. Whether its for gas, groceries, the water bill, or a nice pair of shoes you couldn’t resist, make sure you enter it in your spreadsheet. If you really make the effort to do this, by the end of the year, you will know exactly what you have spent. From there, you can get a better idea of the kind of spending that needs to be reduced–restaurants, retail therapy, etc.–and determine how much you can live on each year.

Now here comes the tricky part, once you have come up with a reasonable number that will allow you to save and be financially comfortable, you must stick to that budget.

Just like most things, the first year is always the hardest, but once you get used to the system, you will eventually be able to find more ways to save. With clear and realistic retirement goals put into motion, make sure you have more than one saving account to keep your money–401K, health savings account, etc.

With the right mindset, financial freedom and early retirement is definitely possible.

 

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Some Seniors Are Being Victimized By Annuity Scams

senior-annuitiesAn annuity is a type of insurance investment that enables the investor to receive a fixed sum of money yearly, for the rest of their life. There are many different forms of annuities that provide customers with a range of benefits but also leave room for certain risks (i.e. stock investments). Annuities are very popular amongst senior citizens since they are primarily bought as form of income during the stages of their retirement.

An Unfortunate Target

Since seniors are prime candidates for annuities, it, unfortunately, makes them susceptible to felony fraud orchestrated by conmen who pose as reliable insurance agents.

For example, two Pennsylvania native sisters, Mary and Philomena Nave, who were in their upper 80’s at the time, had saved up $500,000 to supplement them through their retirement. When looking for a dependable insurance agency to invest their money with, the sisters came across Richard Piccinini Jr., an annuities salesman. Unbeknownst to them, the sisters were ultimately placing their money into the wrong hands. In a four-year span, Piccinini moved the sisters in and out of complicated, long-term contracts that would lead to astronomical commission fees. With constant early-surrender penalty fees, Piccinini was able to embezzle $200,000 of the sister’s $500,000 investment (Source).  

The idea of seniors being victimized by annuity salesmen is absolutely deplorable, but a sad reality. Deceptive agencies who are looking to make money off of uninformed customers are to blame for this. When the time comes to invest your money in annuities, it is highly important to conduct proper research before choosing a company. Sometimes, this burden can be eased with the help of family member who has your best interest in mind.

Sell Your Annuity or Structured Settlement With Rising Capital

At Rising Capital Associates, we can provide you with a lump sum for your annuity payments. If you need cash now for expenses, medical bills, or emergencies, contact us now for more information on selling your annuity payments.

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