I Lost My Job – What About Health Insurance?

by Stacy Francis, CFP®, CDFA

I received an email from a Savvy Ladies member today; a heartbreaking tale of how she had been laid off, and was now trying to figure out how to survive – and feed her two small children, as she is a single mom. One of the expenses she worried about was medical. I think any parent can relate to this: with children around, unless you have the proper insurance coverage, medical expenses tend to run the gamut. For those of you in the process of losing your jobs, here’s how to keep this aspect of your finances under control.

First of all, if you are still employed, make the most out of your insurance plan while you have it. Get all your routine checkups out of the way. If you use medications, take out as much as your insurance provider will allow. If you have been putting off procedures, now’s the time to have them done.

Once you do lose your job, know that you have options. Under COBRA rules, in most cases, your company must allow you to keep your insurance coverage for eighteen months, as long as you pay the full premium. While this is great news indeed, there is one drawback. The full premium can be quite a bit higher than the monthly payment you are used to, depending on your insurance plan and how much your employer has been contributing. Do your research – shop around, and request other quotes. You may be able to find a cheaper deal on your own, especially if you are eligible for a state run insurance program.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Cheap and Expensive Cars to Insure

by Stacy Francis, CFP®, CDFA

When I bought my son a Scion Tc, a client told me over mid-morning mochas the other day, I didn’t anticipate that my insurance bill would skyrocket. I suppose I sort of assumed it wouldn’t make that much of a difference.

The key to staying clear of a situation like hers is to do your research before you buy. Overall, small, sporty, speedy cars mean higher insurance premiums – simply because they are involved in more accidents than bigger, chunkier, slower cars. Add a young driver to the equation (they are considered extra accident-prone) and your price tag will be hefty, regardless of what insurance provider you choose. Just for fun, below is a list of the five most expensive cars to insure – and the five cheapest.

Most expensive:

  1. Cadillac Escalade EXT 4WD
  2. Subaru Impreza WRX 4WD
  3. Hyundai Tiburon
  4. Mitsubishi Lancer
  5. Scion Tc (my client near died when I showed her this)

Cheapest:

  1. Ford Five Hundred 4WD (now called the Ford Taurus)
  2. Buick Rendezvous 4WD
  3. Buick Lucerne/Buick Rainier4 WD/ Honda Odyssey
  4. Ford Freestyle 4 WD/Subaru Outback 4 WD
  5. Buick Rendezvous/Honda Odyssey

So if cheap insurance is important to you, instead of the sports car, buy your teen a Buick! I know that my brother got a Trans Am when he was 16 and only 6 month later got a ticket for speeding at 40 mph over the limit! Yes that is right. The car went as did all future speeding tickets and by giving him a 10 year old clunker so did the high auto insurance bills.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

What Health Insurance Plan Is Right for You?

by Stacy Francis, CFP®, CDFA

With the birth of my daughter just around the corner, my husband and I spent Sunday afternoon reviewing our family’s insurance coverage. Many times, the addition of a new family member means that a different provider or different type of plan becomes more beneficial overall.

If you are shopping for health insurance on your own or if you are covered through your (or your spouse’s) employer and your open-enrollment period is coming up, below are a few must-knows.

Most health insurance plans fall into one of the following two categories: HMOs or PPOs. When enrolled in an HMO, your co-payments tend to be reasonable, but you must stick to doctors within the network. Many times, you need approval from your primary caregiver in order to be entitled to specialist care or certain procedures.

With a PPO, you have much greater flexibility to choose your providers, but co-payments are typically higher and many PPOs have high deductibles. If you are young and healthy, many times it pays off to select a PPO. If, on the other hand, your children are sick often or you have a chronic condition, chances are you are better off with an HMO.

Whichever type of plan you opt for, there will be a number of different providers available. You can research them online at www.ncqa.org.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Taxes: How Much Should You Withhold?

by Stacy Francis, CFP®, CDFA

With only weeks to go before the arrival of my daughter, I go to a great deal of routine checkups. Fortunately, my doctor’s office is an efficient one, and I rarely have to wait for more than ten minutes. Yesterday, the other mother-to-be in the waiting room was quite chatty. Upon learning that I am a financial planner, she told me all about her savings strategy. She claims zero dependents even though she is the main breadwinner in her marriage and has a son. Consequently, every spring she receives a huge tax refund. She splits the money evenly between vacations and her savings account.

While it can be a major relief to receive a check rather than a bill from the IRS, her strategy has one drawback: in essence, she is granting the IRS an interest-free loan. If she would claim the correct number of dependents, she would keep a larger portion of her paycheck every month, and thus be able to invest the money earlier and start to make returns.

But before you slash your withholdings altogether to reverse the situation, so that you get an interest-free loan from the IRS, note that paying far too little taxes throughout the year can easily result in a $20,000 – or even a $50,000 – tax bill, enough to give the healthiest amongst us a stroke!

So what’s the golden number? Opt for the middle of the road, so that in the spring you get neither a terrifying bill nor a huge refund. That way, you safeguard yourself from financial panic and make the most out of your investment capital.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

What Types of Insurance Does Your Family Need?

by Stacy Francis, CFP®, CDFA

One of the moms from the park called me last night, in tears. Not only had she come back to her apartment to find the door ajar and her things all over the floor – when she got hold of the landlord, he informed her that his insurance policy only covers the building structure – not the renters’ personal property. So when her valuables were stolen she lost not only many dear memories, but the money invested in them as well. If you are one of the many people confused about insurance, below are the most common ones to consider.

  1. Renter’s insurance. Renter’s insurance is the one the mom from the park now wishes people had told her about. It covers the things inside your house or apartment when you are renting.
  2. Homeowner’s insurance. Homeowner’s insurance is usually mandatory if you take out a mortgage, and recommended either way. It is also important to note that your homeowner’s insurance needs to be updated when you make major changes or renovations.
  3. Health insurance. This is a complex one with a myriad of different options. Shop around to see what type and provider and coverage would be most beneficial for your family.
  4. Life insurance. Many employers supply their employees with this type of insurance. In case yours doesn’t or not enough insurance is provided, you need to purchase it on your own.
  5. Auto insurance. If you have teenagers who drive, it is generally cheaper to add them to your policy than to get them policies of their own. Make sure everyone who drives your car is covered.
  6. Disability insurance. This, too, may be provided by your employer (or your spouse’s), but you may also need to purchase it on your own as most employers do not provide enough coverage.

Depending on your unique circumstances, other types of insurance, too, may be beneficial for you. If you have your own business, you will need additional types. You may also want to insure art and other valuables.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Long-Term Care Insurance: When to Get It and When Not To

by Stacy Francis, CFP®, CDFA

I met with a new client yesterday. While this is not unusual, the reason he had come to see me was: he was in his thirties, healthy, athletic – and extremely anxious about the fact that he didn’t have long-term care insurance. While some would call this paranoid, for those who have yet to explore this type of insurance, here’s what you should know.

Long-term care insurance covers you if you need to spend an extended period of time in a nursing home or an assisted facility - or if you need long-term care at home. While this is also true for the government-sponsored program Medicaid, there’s one important difference: Medicaid only covers individuals with minimal net worth. The Medicare program covers stays in nursing homes or assisted facilities in certain cases, but only for very short periods of time. What this comes down to is that if you have a decent amount of money but no longer are able to take care of yourself, you will be very happy that you purchased long-term care insurance.

So should everyone get a policy? Well, the drawback is that long-term care insurance can be very expensive – a policy can easily cost you $2,500 per year. Because of this, unless some scary disease runs in your family, it is generally best to wait until you are close to your late fourties or nearing fifty before you take out a policy. You don’t want to make payments on a policy for years and years - only to be forced to drop it due to financial difficulties a year or two before you need it.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Tax Breaks for Your Investment Losses

by Stacy Francis, CFP®, CDFA

My girlfriend called me up last night. “So,” she told me, “I was seconds away from selling these bonds I have so that at least I’d get a tax write-off, when I realized that’s not how it works with bonds. If I hold them until maturity, I will get my money back, won’t I?” I was so proud of her! She remembered! A major difference between stocks and bonds is just that – bonds have a maturity date, while stocks don’t. This is part of the reason bonds are considered “safer” investments. 

If my friend had owned stocks, her thinking would have been very strategic. Many investors sell stocks that are down just before the end of the year, and use the capital loss to lower their tax bills. This is a great idea for stocks, but does not work as well with bonds. 

In the case of mutual funds, things get a tad bit more complicated - or complex, perhaps. The fund managers buy and sell securities now and then, and unless you keep a very close eye on the fund, you will be notified via mail whether you are entitled to a tax write-off or owe the IRS money. Since the fund managers may have bought securities several years ago and sold them during the past year, it is possible that you will have a taxable capital gain even when your fund is down. Conversely, it is also possible that you will be able to do a tax write-off even though your fund is up.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Donating to Non-Profits: Good Karma and Even Better Tax Breaks

by Stacy Francis, CFP®, CDFA

Tax season is here! A great time for anyone expecting a refund, and a not-so-great time for those who now have to come up with a chunk of cash for the IRS, on top of all their other bills and financial responsibilities. For the financially savvy, tax season is a fantastic opportunity to be clever and score some free money – or at least a smaller tax bill.

One fabulous way to reduce your tax bill is to donate to non-profits. For those of you who usually e-file, note that this rule includes far more organizations than the ones your tax program suggests after you have entered your data. There are literally thousands of non-profits from which to choose – ranging from religious institutions to organizations dedicated to curing diseases to those committed to financial empowerment for women like Savvy Ladies. And the tax break remains the same: if you donate $1,000, you will lower your tax basis with that amount, thus paying up to $350 less in federal taxes, depending on your current tax bracket.

And it gets better. Not only do you get a tax break, but you can help these organizations make the world a better place and improve your own life by generating goodwill and good karma.

No wonder so many US charities blossom!

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Should You Do Your Own Taxes?

by Stacy Francis, CFP®, CDFA

My college friend was red-faced and bursting with anger when we met for after-work cocktails the other day. She arrived straight out of a meeting with her tax accountant, who had failed yet again to get her the tax refund so many people received last spring, and for which she was eligible. “Next time,” she muttered between her teeth, “I am going to do the taxes myself. What am I paying him for anyway?”

I tried to explain to her that whether or not you get a tax refund should not reflect on the quality of your accountant. In the safety of my home, away from her rage, I realized that her real question is “Should you do your own taxes, or hire someone to do them for you?”

To answer that question, here are a few things indicating that you could be better off on your own:

  • You know your filing situation (you are up to date with legislation, know your status, etc) and have a very simple financial situation.

  • You are organized and have your paperwork ready to go.

  • You prefer not to disclose your financials to anyone.

On the other hand, these things may be signs you need help:

  • Your financial situation is complex.

  • You don’t want to waste time and energy preparing your return.

  • Your life has changed drastically, and your filing this year will be very different from last year.

  • You want the confidence of working with a trusted advisor.

Or, alternatively, if you are so furious at your accountant that you run the risk of expiring from a heart attack, you may also be better off on your own.

4 Comments

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Taxes: Should You File Jointly or Separately?

by Stacy Francis, CFP®, CDFA

Even after tax season has come and gone, one of the main topics of discussion at a recent seminar was: what are the benefits versus drawbacks associated with married couples filing separately? An excellent question. However, just like with so many other excellent questions, the answer will depend on the circumstances. Below are a few examples of cases where it may be a good idea to keep this one aspect of your life together separate.

  1. You or your hubby has made little money and had lots of medical expenses. By filing separately, the proportions of the two may work out so that you or your hubby can itemize the medical expenses and save well-needed dollars.

  2. Your partner uses questionable techniques for keeping his tax dollars to himself. While tempting, such actions are illegal, and if you sign the same tax return, you, too, are responsible. If you file separately, your chances of arguing in front of a jury that you didn’t know are much better.

  3. Your marriage is crumbling. If you are fairly certain that your twosome isn’t going to last, you may want to file separately in order to minimize the paperwork you need to do together later. It is also important to file separately if you are concerned that he is not being 100% honest on his tax reporting.

Last but not least, it is imperative that you stay up to date with the newest rules and limits for the different tax brackets. Taxation is a complicated matter – but you do have options. When you add knowledge to the pot, you can make an informed decision.

Should you prepare your own taxes?

1 Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.

Pet Healthcare and Insurance

by Stacy Francis, CFP®, CDFA

Last week, I spent a long afternoon in the animal hospital with my cat. The good news is that Sunshine is doing just fine – the bad news is the bill - almost $700. Most people who – like me – love their pets to death have considered purchasing health insurance for them at one point or other. But despite the wild rates charged by many veterinarians, it may not be the best solution. Here’s why.

  1. Health insurance for pets is expensive. Expect to pay several hundred dollars per year and pet – if not more. If your local vet is reasonable, you may be better off paying his or her bills than dumping your money into a policy.
  2. Pet insurance plans usually have high deductibles. Don’t expect to be reimbursed for any minor checkups or procedures. These are on you – in addition to the insurance plan.
  3. The insurance company will tell you they cover pretty much everything – until you try to collect. Then, suddenly, you will learn that eye problems are not covered for this certain breed of dogs, or that this bird disease is exempt. Be very careful when you chose your insurance company and plan. When taking recommendations from friends, make sure their pets have actually been sick, and that they have successfully collected from the company in question.
  4. You may be better off giving your pet a savings account. Especially if your pet is young and healthy, it may be more beneficial to set a bit of money aside each month for vet expenses. This way, you have no deductibles and no holes in the coverage.

With all this said, of course, in certain situations it makes perfect sense to purchase health insurance for your pet. If, for instance, your horse colics and has to spend four days in the animal hospital, with rates of several thousand dollars per day, you may be glad you did.

Comment

Stacy Francis, CFP®, CDFA

Stacy Francis is the Founder, CEO and President of Francis Financial, Inc., a Wealth Management and Financial Planning firm. With over 18 years of experience in the financial industry, she is a CERTIFIED FINANCIAL PLANNER™ (CFP®), a Certified Divorce Financial Analyst™ (CDFA™), and a Certified Estate Planning Specialist (CES™). She is the Co-Director of the Association of Divorce Financial Planners’ (ADFP) Greater New York Metro Chapter and a member of the Women Presidents’ Organization (WPO) and an honoree member of the Private Risk Management Association (PRMA). A nationally recognized financial expert, Stacy has appeared on ABC News, CNBC, CNN, PBS Nightly Business Report, The Today Show, Good Morning America, Fine Living Network, and The O’Reilly Factor. Stacy attended the New York University Center for Finance, Law and Taxation.