What Do People Think About Annuities?

If you are familiar with annuities, you’ve probably heard about what people have to say about them. Many people have mixed opinions about annuities, which can be expected. Annuities are like any other financial plan because they have advantages and disadvantages. Each person is affected by annuities in a different way, so it’s important that you understand how they can affect you before jumping to any conclusions about whether they’re inherently good or bad. And, luckily for you, a great place to start is with The Best Senior Services.

 

In this article, we are going to explain the pros and the cons about some of the available annuity plans, and how they could affect you.

 

What are annuities?

Annuities are best described as an amount of money that goes to you over a period of time. They are typically linked to life insurance policies, and they can be seen as the “savings accounts” within those policies. In fact, just about everywhere you look to learn more about annuities will tell you that it’s a contract between the annuitant (you) and the insurance company. And the websites/videos that tell you this are right: this is a way you should be thinking about it.

 

There are two types of annuities that we will be covering in this article today: fixed and variable. There are multiple types of annuities that exist, such as indexed, immediate, deferred and more, but for brevity’s sake, we will only be focusing on fixed and variable.

  • Fixed: Fixed annuities are in play when your insurance company invests your funds and provides you with a payout in a fixed amount. This fixed amount is like a Certificate of Deposit (CD). Fixed annuities are also designed to protect you from losses. The reason why they are called “fixed” is because there are fixed rates of return that are based upon your interest rate. Your interest rate can be changed once you reach the end of your pre-determined period.
  • Variable: Variable annuities are different from fixed annuities and need to be approached as such. First, you are able to decide how these funds are invested, rather than your insurance company. The returns you receive will depend upon the performance of the investments that you choose, so it can become a risky game. Variable annuities are also intended to fund your retirement, so as a result, these annuities should not be used for any short-term financial goals you or your loved ones may have. 

 

Why people don’t like annuities

A lot of it comes down to the fact that people are misled about annuities, and don’t understand the full picture of them when they purchase a plan. And although we are only discussing fixed and variable annuities, there are other annuity plans people don’t recommend, like immediate annuities.

 

Are there any positives to annuities?

The short answer to this question is: Yes, of course! there are advantages to having an annuity plan, regardless of what you have. There are even benefits to variable annuities, the plan that you may be warned about the most.

 

Below are some of the advantages that come with fixed annuities:

 

  • You have a strong return that is guaranteed to you. This is because the money you are investing will be accumulating. This is something your insurance agent/broker should be disclosing to you, so that you understand what you will be receiving out of this plan.
  • Investment minimums are low. In order to fund a fixed annuity plan, you have to have to begin by investing a certain amount of money. Luckily, for a fixed annuity, it isn’t expensive to do so. You only need $1,000 to get started.
  • The money earned will be tax-deferred. This can be both an advantage and disadvantage. Whatever is accumulating within your fixed annuity will not be taxed. However, if you decide to take out distributions of it, you will be taxed.
  • You have the option to annuitize. Your fixed annuity can later be used to become a sort of retirement income for you and your spouse if that is the direction you would like it to go. Unfortunately, a lot of people are unaware of this deal, so it goes unused by many.

 

Below are some of the advantages that come with variable annuities:

  • You have the ability to choose what you will be investing in. This one speaks for itself, so if you want more freedom over what your funds will be investing toward, this may seem like a major bonus.
  • There is an unlimited number of contributions that can be put into your variable annuity. The same could not be said for other retirement accounts that may be suggested for you, so this is a really nice feature.
  • Like a fixed annuity, the money earned will be tax-deferred. When your annuity is in its growing phase, you will not be taxed on it. That is, unless you begin to take out distributions. In that case, your rate could possibly be higher than other investment distributions. However, as long as you are not taking out distributions, you are able to re-assign that money within that fund. And you can do that without having to be taxed, too.
  • There is an included death benefit. This benefit will go to your heirs. Whenever you pass away, your heirs will have two options for how they will want to receive the money. The first option is to be given the amount that you have previously paid into the annuity. The second option is to be paid what the annuity is valued at at the time of your passing.

 

How annuities can affect YOU

Those who collect annuities do it for a few reasons. A common reason is the fact that they want some form of guaranteed income for either the remainder of their lives or just a set amount of time. Another reason can include the fact that they simply just want a return on their investments. Each reason is valid as to why someone would be interested in an annuity.

 

However, it’s important that you understand the risks of annuities and how you and/or your loved ones can be affected by them. Annuities may seem glamorous, but you need to remember that these are products of insurance, meaning you won’t own anything that you’ve just purchased, unless you want to consider your contract as something. And when the money is returned to you, it means that you’re getting back what you’ve already paid them, so you’re not earning anything out of this. Not only that, but the amount that is returned is stretched out over a long period of time, so you have to wait throughout that period to receive your money back.

 

Below are some of the ways that fixed annuities can negatively impact you and/or your loved ones:

  • There is a penalty for early withdrawals. This may not come as a surprise, because you will also receive penalty fees from taking early withdrawals from your 401(k) or IRA accounts. Similar to your IRA, if you pull from your fixed annuity account before you reach 59 ½, you will incur a 10% penalty fee.
  • They are not insured by the FDIC. If a service is covered by the FDIC, then that means the depositor (in this case, you), is insured up to $250,000 in the event of bank failure. And, according to FDIC.gov, it “does not insure nondeposit investment products, even if they were purchased from an insured bank, including annuities, mutual funds, stocks, bonds, government securities, municipal securities, U.S. Treasury securities.” In addition, safe deposit boxes and robberies/other thefts are not insured by the FDIC.
  • Limited liquidity. When you agree to a fixed annuity plan, you are agreeing that the funds will either be distributed over a certain number of payments, or a pre-determined deferral period. This circles back to the penalty of withdrawals, as it reiterates how important it is that you do not take out, or move around, money within these funds.

 

Below are some of the ways that variable annuities can negatively impact you and/or your loved ones:

 

  • They are extremely expensive. In fact, they’re so expensive, that they are considered one of the most expensive financial products available. One of the first things to make it costly are the fees. These fees are mutual fund subaccount management fees, contract maintenance fees, and mortality and expense fees. These will basically replace the tax that you’re deferring, and that can quickly become burdensome for someone who wasn’t expecting it.
  • Other investments are more liquid than variable annuities. If you decide that you no longer want to participate in your variable annuity, you better hope that at least seven years has passed.
  • There is high risk associated. One of the benefits associated with variable annuities is that you are able to choose what you are investing in. However, because you are choosing where your investment funds are going, your returns are based on the investment portfolio’s success. Typically, people seek risks. But when it comes to your finances, it’s worth considering whether it would be better to be playing it safe. One way you can play it safe is by purchasing a rider who will maintain the gains you’ve earned after a certain date. Some even offer that you will get some sort of payment regardless of the portfolio’s success.

 

Our advice

Annuities are a really complex service to grasp, so it’s not surprising to hear that many feel as though they weren’t given the full story when signing up for a plan. However, that doesn’t have to be the case. If you or a loved one is considering getting an annuity plan, you have every right to do so.

 

Make sure you understand what all is entailed within the annuity you are looking into. Like we disclosed: there are multiple different annuities that you can invest in, and we only covered a few of them in this article. Our advice is to talk with a licensed agent, or a financial specialist, about whether an annuity is the best plan for you.

At The Best Senior Services, we want to make sure that you are speaking with someone who prioritizes your financial needs. That’s why we dedicate ourselves to educating seniors about Medicare and other financial services. If you are interested in being connected with a local, licensed agent, visit our website or call us at 855.979.8277 today.

The BEST Financial Decisions a Senior Could Make

All throughout your life, you’ve been responsible for making financial decisions. Whether it be determining where to go on vacation or when it is best for you to retire, you’ve had to take some time to make these choices. You’ve worked hard to enjoy your senior years, but those days can be hard to look forward to if you don’t have a stable handle on your finances.

This article is designed to tell you the best financial decisions that a senior can make, so that you can go into your retirement knowing how you can bring yourself some peace of mind.

 

  1. Budget carefully. You’ve heard this time and time again, especially from us, but this is advice that will never expire. Set limits. Think ahead. Be mindful. These are all quick and simple ways in which you can budget carefully.

 

Your income is likely to be lower during your retirement years than when you were working, so this means you will have to save more and spend less. You can do this by drafting a list of things you want — like new clothes or a quick get-away trip — and things you need — health insurance, nutrition, transportation and more. Determine how much money you are realistically willing to spend on the things you want and how much money you will have to spend on the things you will need. This will help you begin your budgeting phase.

It is also always safe to partner with a financial specialist who can help you determine how to budget your money.

  1. Establish a good relationship with your bank. There’s nothing better than having a good relationship with your bank, and there’s nothing worse than having a bitter relationship with your bank. You can maintain good grounds with your banking institution a number of ways: being open and honest, display financial strength and clearly define how your bank can help with financial goals. Doing this will significantly help you in the long run — especially if you find yourself in a financial emergency and need all of the help and support you can get. Trust us, your bank is something you will want to have on your side.

 

  1. Enact fraud safeguards. Older generations are more likely to be scammed, or experience fraud, for a number of reasons. The most obvious reason is because they’re trusting and don’t understand that people are solely after their hard-earned money. Luckily, there are ways in which you can prevent yourself from being scammed. One of these ways is to get your family involved. If you have children, download apps that will alert you and your children in the result that there was a large sum of money withdrawn from one of your accounts.

 

Another way you can protect yourself is to not believe everything you read, especially if it’s coming from the internet. Be careful about what you read online because that is where a lot of seniors are targeted.

Being scammed, or having fraud committed against you, is a scary experience. That’s why one of the smartest financial decisions you can make is to be to protect yourself and always beware.

  1. Prioritize paying off high-interest debts first. When many think about their debts with high interest, they think of their credit cards. And they wouldn’t be wrong. Prioritizing these debts is an important thing to keep in mind. Doing so will provide two major benefits. First, prioritizing your high-interest debts will let you pay off all loans and debts faster. Yes, you read that right! Second, you will end up saving money. That’s because you will pay less in interest if you pay off your high-interest debts before your low-interest debts. So, keep this in mind: the quicker you pay off your high-interest debts will result in lower interest payments.

 

  1. Consolidate any debt you can. You’re familiar with what it means to consolidate your debt. It’s even possible that you already consolidate some of your debts. If so, keep it up! Not only will this reduce the number of payments you will have to make, it’s also possible that it will lower your interest rate and monthly payments. Monthly payments can be lowered because your payments will be spread out slightly further into the future.

 

Other advantages to debt consolidation include:

  • Your credit score could be improved.
  • Your budget will be simplified and easier to manage because you will have fewer monthly bills.
  • Less stress because of the aforementioned benefits.

 

  1. Research, research, research. Did we mention research? Seriously, do it. Making any financial decision blindly increases your chance of facing financial disaster or being scammed. If there is a new insurance policy that your spouse wants to try out, or if there is the opportunity for you to become a part of a deal, you will want to do as much independent research as you can before you make any final decisions. The worst thing you can do is dive head-first into a deal without any research invested into it, and it end up being a terrible one.

 

You can conduct this research by talking with a licensed agent or referring to government-approved websites to see what potential advantages and disadvantages are. You’ll thank yourself later.

 

  1. Take on at least two mindsets when faced with a deal. If there is a deal being pitched to you, put yourself in at least two different pairs of shoes. Think about what you would be coming away with, but also think about what the person pitching to you will also walk away with. Doing this comes with a lot of benefits: not only are you slowing your pace and taking more time to consider this offer, but it also allows you to weigh the pros and the cons.

 

If the person who is pitching this service or product to you is very obviously getting the better end of the deal, whereas you benefit by only a little, then it may not be the smartest move. Make sure that you come away from every offer feeling equally as empowered as the seller. This may require negotiation, or it could mean that you turn the offer down altogether.

 

  1. Utilizing The Best Senior Services. One of the best financial decisions that you can make throughout your senior years is getting into contact with The Best Senior Services (TBSS). Not only will you gain education on Medicare and other financial services, you can also be connected with a local licensed agent who can answer any questions or concerns you have. TBSS works for seniors because we care about your well-being and financial success.

There are a number of financial decisions that you can make, and each will come with advantages and disadvantages. Before coming to any conclusion, you will want to slow down and consider your options. Conduct research, think about everyone involved and how it can help you with our budgeting plan.

 

If you want to learn more about how you can get in touch with TBSS, then we have you covered. You can get started with us today by visiting our website or calling us at 855.979.8277. We look forward to getting in touch!

Should You Consider a Whole Life Insurance Policy?

When you were young, purchasing an insurance policy that was just right for you was probably confusing and slightly overwhelming. As you got older, some of that confusion may have subsided, but insurance still seems like a lesson that you never truly stop learning.

 

If you have had term life insurance policies throughout your years, and it’s coming to an end, you have a couple of options: you can renew your old/current plan for another term, let your plan expire and go without life insurance, or you can switch to a whole life insurance policy. This is similar to a term policy, except it’s permanent and comes with no expiration dates.

 

This article is designed to help you understand more about what a whole life insurance policy is, and whether a whole life policy could be in your best interest.

 

 What is a whole life insurance policy?

Again, a whole life policy is a permanent life insurance policy, meaning that it will cover you for the duration of your life. In addition to a whole life insurance policy, you also have a separate account called “cash value.” When the term “cash value” gets thrown abut, it means that there is a cash amount given to the policyowner whenever the policy is cancelled. It is only applicable to permanent life insurance policies, so this is something that cannot be applied to term life insurance.

 

Many insurance agents suggest whole life insurance policies because they will have you covered for life. In fact, they will even suggest that you cover your children by getting a policy for them, too. Others, like Dave Ramsey, believe that whole life insurance policies aren’t worth it. So, let’s get into the pros and cons of this policy, so that you understand both points of view.

 

Advantages to whole life policies as a senior

Here are some of the advantages for seniors who have a whole life insurance policy:

  • Whole life insurance will pay benefits regardless of when you pass away. This is true as long as your policy is still in force. As soon as you pass away, your beneficiaries will receive the policy’s death benefit.
  • You’ll have an easier time finding coverage. It’s hard to secure term life insurance when you’re at a certain age. This is because a lot of policies are 10 to 20-year terms, and when you reach that age, it’s harder to guarantee you’ll fulfill those policies. As long as your premiums are paid on time with your whole life policy, you shouldn’t have too difficult of a time getting accepted.
  • It builds cash value over time. Cash value is built within your policy when you pay your premium. By doing that, some of it goes into a savings account, and once you have enough, you can begin to borrow from that account.
  • Premiums are predictable. Premiums will always stay the same and never differ, meaning you know how much you will owe on it each month. This can be relieving to know, especially when you have other bills to pay with fluctuating payments.
  • Living benefits are accepted on whole life insurance. Let’s explain this in a little bit more depth: if you are considering whole life insurance, one of the reasons for this could be because you are critically injured or ill, you will need to become a caregiver, or you are at the point in which you need care for daily tasks. Whole life insurance offers living benefits, in which you can receive a part of your death benefit if/when you are diagnosed with an illness or injury, or it is deemed that you will be needing care.

 

To make this a little easier to understand, let’s set up an example: You have a $200,000 whole life policy with living benefits, and you were recently diagnosed with Stage 3 breast cancer. Upon contacting your carrier, you discover that you can receive $50,000 for treatment and care. This leaves you with $150,000 for your death benefit that will be disbursed to your beneficiaries.

 

You can do this with term life policies, but there’s something that you need to consider, and that is when your policy expires, your living benefits expire along with it. When your term ends, it’s possible that you will have to purchase separate plans that could cover a potential future illness.

  • You have control over your account. There are a lot of financial services you will sign with your insurance company in which you don’t have complete control over. Luckily, this isn’t the case for whole life insurance. In fact, it’s the opposite. When you sign a contract with your insurance company. You can access this account and use the money for anything you need.
  • It’s possible that you can receive dividends from your whole life insurance policy. You can receive dividends once per year, typically around the end of the year. You can expect dividends if the insurance company has paid off its fees and is deemed profitable. In this event, it will return payments to you, known as dividends. Not to mention, you will not be taxed on these dividends.

 

Disadvantages to whole life policies as a senior

Here are some of the disadvantages for seniors who have a whole life insurance policy:

  • It is expensive. And by this, we mean that there are cheaper options out there. Typically, the cheapest life insurance is term life insurance. And if you’re in great health, getting term life insurance may be the better option for you.

 

The cost of your whole life insurance policy is dependent upon a number of factors, so it’s hard to determine what you’re going to be paying until everything is finalized. This includes age, health, habits, how much coverage you need and more. One thing that you can bet on, though, is that your whole life policy will cost more than any term policy you would have had.

  • Loans require interest. Essentially, if you want your money out of the policy, you either have to cancel the policy or borrow your own money. And that requires interest. This may not sound like news to you because almost every loan out there comes with some sort of an interest fee. But when you think about it, this can present itself as a major disadvantage. You are being charged interest to borrow the money you paid into the policy.
  • It’s not the most flexible option. Once you select your coverage, it cannot be changed. This means that, your coverage will not be increased or decreased depending on what your needs are. Premiums are also adjustable. This means that if you are unsure about your financial future, this may not be the best option for you.
  • Your beneficiaries won’t receive everything. When you pass away, your beneficiary will only be receiving the death benefit, while the insurance company will receive the cash value. Your beneficiary cannot receive both. This may sound frustrating to most, and it’s with good reason. You are paying into a savings account that you don’t get to use unless you are borrowing from it. And, even then, we circle back to the interest fee that has been previously mentioned.
  • It’s not the best tool for retirement planning. Although you certainly can use parts of it – like the case value – for your retirement planning, it’s not in place so that you only have to rely on this policy. A great way to plan for your future is to invest your savings into your IRA accounts, as well as your 401(k) or 403(b).
  • Some don’t have the financial stability to maintain a whole life insurance policy. We understand that this sounds like a scary concept. And, unfortunately, it’s true. In the event that you experience financial catastrophe, and you are unable to pay your premium, your cash value will be able to cover it. However, your cash value is not designed to pay off your premiums, and it’s certainly not built to last forever. This means that, after a certain amount of time, if you are still unable to pay for your premiums and your cash value runs out, then your policy will disintegrate.

 

 

You may be coming away from this article thinking that you may need whole life insurance, or you may be thinking that you could never trust any insurance agent who will try to sell this to you. If you’re feeling the latter, don’t worry. At The Best Senior Services, we can help you. We will connect you with a local, licensed agent who will work with you on selecting the best policies for you.

Regardless, whether you should consider a whole life insurance policy is solely up to you because no one knows your situation like you do. If you meet with an agent who does not provide you with a specific way in which you will want to consider whole life insurance instead of term life insurance, then consider other options. The Best Senior Services will be happy to provide you information about financial services so that you can enjoy your retirement years. Call us at 855.979.8277 or visit our website today to get started.

How to Prepare Yourself for Medicare

You’ve prepared yourself for many things throughout your life: your first day of work, your wedding, your first child. Now it’s time to prepare yourself for the next big thing, Medicare. Medicare is a confusing concept to immediately understand. It takes time before you feel confident enough to tackle what lies in it. If you’re unfamiliar with the program, Medicare is a health insurance program that is typically offered to Americans over the age of 65. It began in 1965 and has been offered throughout the United States since. As you prepare yourself for Medicare, there are a few things you will want to keep in mind to ensure that you better understand what the program is and how it could benefit you.

 

The benefits of being prepared

There are benefits for being enrolled for Medicare, but there are also benefits to preparing yourself for Medicare too. The first, and one of the obvious, benefits is that you’ll know what you’ll be getting yourself into. Going into Medicare enrollment without preparation will likely leave you confused and frustrated. By preparing, you’ll have information regarding your current health insurance plan, advice from a specialized agent and desired preferences in mind. No one knows your situation as well as you do, so planning for enrollment ahead of time will help you definitively settle on what you want.

Being prepared for Medicare will also benefit you because you’ll be able to enroll early. Like we stated before, open enrollment for Medicare begins three months before your 65th birthday and lasts until three months after you’ve turned 65. Preparing for Medicare early will allow you to enroll early.

Not to mention, preparing for Medicare will make things a lot easier. When you fill out the required information pertaining to enrollment, you’ll know your answers – or have them close – so you’re not scrambling to remember anything.

First thing’s first

Before you begin the process of preparing for Medicare, you first want to ensure that you are eligible. Medicare enrollment opens three months before you turn 65 and will be open for three months afterward. However, if you’re younger than 65, you can still qualify for Medicare if you have a permanent disability, end-stage renal disease, Lou Gehrig’s disease (also known as amyotrophic lateral sclerosis) or if you have been entitled to Social Security disability benefits for at least 24 months. These 24 months do not have to be consecutive.

Seek help from a Medicare specialist

Whether this is an insurance agent or broker, this specialist is familiar with the concept of Medicare and is ready to help you better understand what it entails. Seeking help from a specialist will not only relieve your confusion, but it could answer questions you don’t know you have.

Talk with a specialist about the potential benefits you will get out of Medicare, as well as some of the common misconceptions that go along with it, so that you have a better understanding of what you will be enrolling in.

This is where The Best Senior Services can help. The Best Senior Services specializes in providing seniors a licensed agent in their area that prioritizes their needs. Let TBSS connect you with a licensed representative by filling out some important information.

Research your options for Medicare

Meeting with a specialist is a great step in preparing yourself for Medicare. However, you shouldn’t only gather your information from your insurance agent or broker. It’s important you do your own research as well. The research you find could range from enrollment periods that work best for you or knowing what benefits you will get out of Medicare.

You’ll also want to do a deep dive into your current health insurance plan. Consider what coverage you currently have, and whether it will change once you turn 65. Knowing what you have now will help you fine-tune what you will need – or want – to have covered when you switch to Medicare.

It could even help to talk with others who have Medicare. There are large communities of people who are enrolled in the program and can offer great advice about things you are unsure about or want more information over.

Make sure your doctor accepts Medicare

Although millions of Americans over 65 use Medicare, that doesn’t guarantee your doctor will accept Medicare as your health insurance. Speak with your doctor to ensure that he or she accepts Medicare. If not, your agent will be able to provide you specific information about your plan.

Understand the important dates

Much like other insurance policies, Medicare isn’t flexible when it comes to dates. Perhaps the most important day to keep in mind with Medicare is October 15. This is when the Annual Open Enrollment Period begins, and it lasts until December 7. That is an eight-week timeframe in which you and your eligible loved ones can enroll for Medicare.

Take things one year at a time

We all get so used to planning our entire lives out that we forget we can break the planning process into smaller parts. A great way to mentally get ready for Medicare is to take things in smaller increments. As you continue with your research, you’ll find online resources that will help you plan for your first year in Medicare. This will help you plan all of the details in a manageable way, rather than overwhelm yourself with planning years in advance.

You can find your Year 1 Medicare checklist on medicare.gov, an enrollment checklist on healthline.com or articles with checklists for Medicare online.

 

Medicare isn’t the most exciting thing to be planning for, but it’s a good thing to be considering. It offers a full array of benefits and can be personalized to your preferences. When preparing for Medicare, remind yourself of the things that you need to do to successfully enroll. You should also keep in mind the things you have discovered about Medicare in your research – both online and with a specialist. Regardless, you’re on the right path to understanding what Medicare entails and how you can conquer it.

When to Trust What You’re Reading Online

Do you remember when the internet was first created? As the internet slowly progressed, parents and guardians were quick to tell children not to believe everything they’ve read online. But we’ve now entered an era where almost everything takes place online, and it’s almost impossible to get through your daily life without needing it to some capacity — whether you want to have a video chat with your grandchildren, need to search for a recipe or even if you work from home. As a result, you don’t quite know when to trust what you’re reading and when you should listen to your instincts that you still can’t believe everything you read online.

This article is to help you know when you can trust what you’re reading on the internet, and how you can spot something fake.

What not to trust on the internet

Let’s get started with the resources that, generally, can’t be trusted. These are the websites in which anyone can put any sort of information into. This could lead to false information being posted as fact, which can be a dangerous thing. These resources are:

  • Social media. We could not emphasize this enough. Social media is an open forum for people to post whatever they want at whenever they want, however they want. And, unfortunately, people abuse this power. People use social media to post false or misleading claims that can’t be backed up. They may cite sources but doing so could reveal that the person misinterpreted the claim before posting about it or found information from another unreliable source. You should never blindly believe what you are reading on social media is true.
  • Wikipedia. Wikipedia labels itself as the “free encyclopedia” that posts general information over any topic — from celebrity biographies to a scientific phenomenon. Anyone with an account linked to Wikipedia can post material on any specific page. What anyone changes could be mistaken as fact to many people because he or she can change the information on the website, which can quickly become a problem. This could have an adverse effect because it could lead people to take actions based upon inaccurate details. Let’s say information about a popular schoolboard candidate was tampered with, resulting anyone who reads that false rumor to vote against him or her. The fake information spread about the candidate would result in a loss that was partially made unwarranted because of lies people perceived to be true.
  • Online reviews … kind of. Although online reviews can be very helpful, you need to be careful about them. Most of the time, people only write reviews if they are passionate enough to take the time out of their day. This can be a good thing and a bad thing. If there is an overwhelming number of reviews telling you that you should not purchase a product, then it’s likely that it is a product you will want to avoid. However, if there are mixed reviews, you will want to find a happy medium between the differing opinions you are seeing. A large reason why you should also be skeptical of online reviews is that, sometimes, companies will post false-positive reviews about their product or service. According to a report from BestSEOCompanies, almost 40% of these reviews are fake.

What to trust on the internet

Now, just because there are some places crawling with false information, it doesn’t mean that everything is fake. It is important to fact-check what you’re reading, and these are some of the resources that are viable and trustworthy:

  • Websites that are managed by the government. Pages ran by the United States government will typically end in .gov. Government-run websites are one of the most credible websites that circulate the internet because they are regularly fact-checked to ensure the information is still true. Many people rely on what is provided by government websites, so any details that are out-of-date are corrected. There are almost 2,000 websites overseen by the federal government, including the Library of Congress, Bureau of Economic Analysis, Census Bureau, and more.
  • Websites that are managed by academic institutions. Much like government-run sites, academic websites are also very credible. Most of the websites linked to academic institutions will end in .edu. Many times, these schools will post research papers about findings they have discovered, through intensive analysis and examination.
  • Google Scholar (and other scholarly databases). At Google Scholar, you will find a wide array for scholarly literature. According to the website, you will be able to find resources on articles, theses, books, abstracts, and court opinions. The website is an easy and efficient way to find credible resources for anything you would like to know more about. In fact, Google Scholar is a recommended tool to many college students who are writing papers or studying an independent subject.

 

What to do if you’re unsure

The highest recommendation that we can give is to fact-check. It’s good to get at least two to three sources that back up what you’re reading. Of course, you should not fact-check on social media. As we stated, social media is not a place to trust a lot of what you’re reading online.

When you are fact-checking, first make sure that the website cites any sources, whether it be cited links or a list of references. Check these sources to see whether they are based on legitimate data and research findings, or if they are false. You can typically tell if a resource is false based on the way it’s written. If the resource is written in broken English or is from a less-than-professional-looking website, it’s likely to be fake. However, if the reference is research posted by an academic institution, or if it is a registered with the government, it’s likely to be reliable.

Things to remember

It’s possible that you may feel overwhelmed by the amount of information that is circling around online. If there is one thing to know about the internet, it’s that it shows us just how much there is to learn out there. Although a lot of the information is misleading or altogether false, that doesn’t mean that there aren’t truthful things online.

If you’re researching into a topic, you will get a lot of mixed information that will display the varying opinions or findings over it. For example, insurance. If you are researching into insurance policies that will help you in retirement, you will find a lot of different facts and opinions about different policies. If you click on a link about health insurance from an insurance agency, you will find a lot of facts that will persuade you to want to work with it. But, if you click on a link from an independent broker, you may find points that you never considered and will deter you from selecting that policy or working with that company.

This can leave you feeling confused and, at times, stressed about the next steps you should take. Both aren’t necessarily wrong, but which option is better? Don’t worry, we’ve got you covered. The Best Senior Services is an educational hub for seniors to learn about what is their best option for insurance and other financial services in their retirement. We also connect seniors to a local registered agent who will work closely with them to give them the best plans for their future.

Call us today at 855.979.8277 or visit our website to get started with us today!

6 Disadvantages to Reverse Mortgages

It doesn’t take a lot of effort for anyone to become confused about the financial services that are offered to him or her. And when you throw around the concept of a reverse mortgage, you can almost count on uncertainty and doubt.

 

If you need a quick reminder about what the reverse mortgage plan is, be sure to visit our website. There, you can read – and watch a video — about what a reverse mortgage is and how it might be beneficial for you and your loved one.

 

In a recent article, we discussed seven advantages to a reverse mortgage plan and why you might want to consider applying for one. In this article, we are going to talk to you about some of the disadvantages that come alongside having a reverse mortgage that you will want to look out for if you decide that it is a plan you want to utilize.

 

Disadvantages to Reverse Mortgage

Although there are a lot of amazing benefits you will receive as part of the reverse mortgage, you need to know what some of the disadvantages are, too. Understanding both the upsides and the downsides to this plan is necessary for you to make an informed decision about whether applying for a reverse mortgage is the right move for your family.

 

Some of the potential disadvantages to a reverse mortgage is:

  1. Getting a reverse mortgage comes with fees and expensive closing costs. These fees can include home appraisal and origination fees. Some of the things that can be brought into the closing costs include credit report fees, courier fees, document preparation fees, recording fees and more. If your heart is set on getting a reverse mortgage, this may not be much of a hindrance. However, each fee has its own cost, meaning you will have to expense for each individually. So, if you’re currently on a fixed income, these expensive costs may not be what’s in your best interest.
  2. It will accumulate interest. The reverse mortgage is a loan, so eventually, it will have to be repaid. An example of repaying this is if you sell your house and use that funding toward paying off the reverse mortgage. However, in the meantime, the amount of money that you will have to pay back will grow over time as a sort of interest. The interest rate for reverse mortgages also tends to be higher than other mortgages — as of June 2021, the lowest fixed interest rate sits at 3.06%. But rest assured, the amount you owe will not surpass your home’s value when the loan is due.
  3. It’s not the easiest concept to understand. You may have a grasp on what a traditional forward mortgage is. Now it’s time to flip what you know. Easier said than done, right? That’s because grasping a reverse mortgage is confusing. Instead of borrowing money and paying the loan down over time, you’re gathering the loan over time and have to pay it back when you no longer live in the house. In fact, these plans are so tricky that some people go into default. According to the FHA, almost 20% of those who have taken out reverse mortgage loans between 2009 and June of 2016 are “expected to go into default because of unpaid taxes or insurance.” If you decide to apply for a reverse mortgage, make sure you are on the same page with your lender about what your expectations are, and what the government’s expectations are. You do not want to be left in the dark with any loans, so this is an important step to take.
  4. Some heirs have reported difficulty when trying to pay the dues. Everyone is susceptible to making mistakes, including lenders. Typically, when some who have tried to pay off the loan balance have run into issues, it is because some lenders have failed to keep records, shared mistaken information, or simply lacked adequate response times.
  5. It can reduce your net worth. Think about the point of the reverse mortgage that we stated earlier. You are receiving your home equity in the form of money, right? So as soon as you spend that money, your house will not hold the same value it did before you received the home equity. In simple terms: the longer you are receiving money from your reverse mortgages, the more your equity will decrease. This, coupled with the increasing interest, will lower your overall net worth.
  6. The payments will never fluctuate. This is both a good thing and a bad thing. On the bright side of it, your payments will never decrease. The amount you receive in the beginning is the amount you will receive until the end. Unfortunately, on the dark side, it also means that your payments will never increase. If you are of ill-health, and you know that your medical expenses will rise in the future, the lack of additional funding from your reverse mortgage can be detrimental. This is because you are still expected to pay off the taxes and upkeep that are associated with your home. Otherwise, you won’t be able to stay in your home. Managing both these mounting costs and an illness will bring you stress and financial burdens that will become too much to handle.

 

Reverse Mortgage Our advice

Although reverse mortgages are a special type of loan, this does not mean they should be approached any differently than other financial products. Conduct your own research online and speak with a specialist. Luckily for you, you can do both of those right here, at The Best Senior Services. By watching our video over reverse mortgages and sharing your needs through our website’s online form, you can have all of your bases covered.

 

At The Best Senior Services, we pride ourselves in providing seniors with the best tools and resources to stay educated about retirement and finances. That’s why it’s important that we present you with all of the information available about popular plans and products, including reverse mortgages.

 

Key points to keep in mind regarding a Reverse Mortgage

Just like there are downsides to a reverse mortgage, there are also upsides. Like we discussed in our recent article, some of the great benefits that come with this plan is that you never have to repay the loan as long as you are living in the home as the primary residence, and it helps secure your retirement.

If you have any further questions about reverse mortgages, don’t hesitate to reach out to us today. You can contact us on our website, or call us at 855.979.8277, and we will connect you with a local licensed agent who will address all of your questions and concerns.

7 Advantages of Reverse Mortgages

Why you should consider a reverse mortgage

As you get older, you’ll notice a lot of plans and programs you can sign up for. This could be for your health, your retirement, or your home. One of these plans you may hear about is a reverse mortgage, designed for seniors who are 62 and older who have quite a bit of equity associated with their homes.

 

What is a reverse mortgage?

If you need a quick refresher, let’s start with the basic concept: a reverse mortgage is a plan that is made for seniors. It allows seniors to pull from their home equity to fund other retirement needs that they may have. This allows those who qualify to convert their home equity into cash.

 

For a better understanding of what this plan is, and how you may qualify, visit our reverse mortgage page.

 

Why might you need one?

First, know it’s not for everyone. If you plan on moving and/or selling your house to your children, then this is not for you. However, if you’ve run out of outside savings and/or no longer have a source of income, this helps you get the money you need. You may also want to consider a reverse mortgage if you want more flexibility within your income.

 

Advantages

There are a lot of advantages that come with a reverse mortgage. The most obvious advantage? You can stay in your home. Having a reverse mortgage ensures that you have complete ownership over your home, no matter what the circumstances are or how old you are.

 

Other advantages include:

  1. Qualifying for a reverse mortgage is not dependent upon whether you have good credit or a job. Generally speaking, if you have sufficient equity on your home (at least 50%-60%), and you meet the other criteria that is required to have a reverse mortgage, then you don’t need to worry about your credit score or employment status.
  2. It helps secure your retirement. If you don’t have a lot of money in savings, but you do have accumulating wealth on your home, then the reverse mortgage is appropriate for you.
  3. It is federally insured. Because your reverse mortgage is federally insured, you will be receiving the payments as agreed on your loan terms no matter what. This means that, even if your loan becomes more than what the value of your house was when it sold, government insurance will cover the difference.
  4. No points necessary. In a traditional mortgage, points come into play. A point is a fee that the lender charges that is equal to 1% of the loan amount. But, because this is a reverse mortgage we are talking about, points don’t come into play. The only fee that your lender could charge you is the origination fee, which can be negotiated with the FHA because the FHA is what regulates it.
  5. Put it toward whatever you want. Believe it or not, a reverse mortgage doesn’t just cover your housing expenses. Your reverse mortgage can also go toward electricity, heat, vacation funds and other retirement necessities, in addition to many more things.
  6. The reverse mortgage will never go “upside down.” This simply means that your heirs to the home will never have to repay more than what the house is valued at.
  7. You don’t need to repay the loan. We saved one of the best perks for last. As long as you are living in the home as your primary residence, you will not have to repay the loan. Once you pass away, your heirs have the option to buy your home back or sell it. If they purchase it, however, there is a chance they will be expected to satisfy the remaining loan balance. In this event, they will want to contact the HECM lender as soon as they can to determine their next steps.

 

Disadvantages

Although the advantages of reverse mortgages are hard to pass up, reverse mortgages are not invincible to having some disadvantages, and you deserve to know what they are. The disadvantages to consider are the expensive closing costs that come with it and the interest it will accumulate. Not to mention, it is a very confusing concept to grasp. It will take time before you completely understand the obstacles you will have to face when you are trying to qualify.

 

What happens if you pass away?

You may be asking yourself, “What happens if I am living in my house when I pass on? Does that mean I’m no longer living there?” Well, technically, yes. Once the owners pass away or move out of their house, the loan needs to be repaid. If you have an heir that wants to keep the house, he or she can pay off the HECM or take out a separate mortgage that could cover the remaining payments of the reverse mortgage.

 

However, your heir will want to consider applying for a new mortgage immediately following your passing. This is because the Federal Housing Administration (FHA) will only allow your heir six months to pay off the HECM. In this instance, interest on the reverse mortgage will still be accumulating in those six months.

How to get a reverse mortgage

If you’re still reading, it’s likely you’re interested in getting a reverse mortgage for your home so that you can fund the other things that are necessary for your retirement. Before you can get a reverse mortgage, there are a couple of things you will want to do first:

  • Calculate your eligibility. You can calculate your eligibility online by filling out information about the age of the homeowners (you and your spouse), your home value and your mortgage debt. Depending on where you look, you will be able to determine your home equity percentage, the amount in which you are eligible for and the property value search on your home. We can save you a step. Call us or visit our website to get into touch with a qualified agent who will calculate your eligibility for you.
  • Know your rights as an owner. If you’re married, this is important. The loan does not have to be repaid until both you and your spouse are no longer living in the house. That means if one of you must move into a senior care facility, the loan does not have to be repaid until the other passes away or moves. However, this only applies if both you and your spouse are co-borrowers. If not, then your spouse will be expected to pay back the loan if you pass away.
  • Understand what works best for you and your loved ones. If you decide a reverse mortgage is appropriate for you, you will want to take steps in the best interest of your family. This can be exercised two ways: creating a will and deciding the best payment method. Creating a will ensures that the needed payments will go toward the correct person. Deciding the best way to repay the loan is up to you, but options include selling your home to your heirs while you’re living, letting your heir sell the home when you pass to pay off the loan, letting your heir pay back the lender, and more. Make sure you speak with your family to make sure everyone agrees on what should be done. Otherwise, there will be confusion and tension that could have been avoided.
  • Speak with a licensed expert. When you do this, he or she will be able to go over a review of the reverse mortgage at no-obligation. He or she will also be able to go over the application process if you decide that this is the right move for you.
  • You must receive counseling from a Housing and Urban Development (HUD) counselor. This is a certified and trained representative who will assess your financial situation and appraise your home. Before you can begin the application process, you must meet with a HUD expert.

 

If you still have questions on what to do, or where to turn, to get a reverse mortgage, then you’re in luck. The answer is easier than you may think. It starts with visiting us, The Best Senior Services, to get into contact with a registered professional who can help you decide whether a reverse mortgage is the best move for you and how you can acquire one. Get started today on our website, or by calling us at 855.979.8277.

How to Switch to a Better Medicare Plan

Nobody should settle when it comes to health insurance. Your health insurance plan should be chosen based on how well it fits your lifestyle. And sometimes, as your lifestyle changes, your healthcare needs change too. If you are enrolled in Medicare, and you need to change the plan you are in, it may seem like a daunting task to make the switch. Luckily, there are steps you can take to change your Medicare plan, and they make doing so much easier than you would think.

In this article, we have prepared a simple question-and-answer guide below to help you through this process so you can successfully prepare for your future.

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Changing a Medicare Plan: Canceling Your First Plan

When canceling a Medicare plan, do not rush yourself. First and foremost, you can cancel your Medicare Supplement plan at any time. This means that you don’t have to rush around to try to pinpoint an exact date to discontinue it. You can do this by calling your insurance company but, once it’s canceled, you run the risk of not being able to get it back. Additionally, other Medicare Supplement plans will be hard to get without medical underwriting. This means that your medical history will have to be reviewed when applying for another Medicare Supplement plan.

You have a few options as to when you want to cancel your Medicare Advantage plan, too. Many think that canceling a Medicare plan is only possible during certain times of the year, like the open enrollment period that is active every year from October 15th through December 7th. Although you can cancel during this time, there are other options available, too. You can also switch between different Medicare Advantage plans between the dates of January 1st and March 31st.

If you are still needing other options, don’t worry. Other times you can disenroll from your current plan include:

  • Initial Enrollment Period (IEP) allows disenrollment. As you may be aware, your initial enrollment period for Medicare begins three months before your 65th birthday and is open until three months after you’ve turned 65. During this time, you are able to disenroll from the Medicare Advantage plan that you may choose. To do this, talk with a Medicare consultant at 1-800-MEDICARE or contact your plan provider.
  • Manual disenrollment. If you need to manually disenroll, you can get in touch with your plan provider and ask for a disenrollment notice, which is a card that is mailed to you for you to complete and return. You can also call Medicare at 1-800-MEDICARE (1-800-633-4227), where a representative can assist you.
  • Signing up for a new plan earns you automatic disenrollment. You are automatically disenrolled from your current plan whenever you register to a new one. People who cancel the Medicare Advantage plan typically do it because there is a change in their healthcare needs, or the cost of it just isn’t efficient.

If you want to cancel your Medicare Part A, this is where things can get a little difficult. Because Medicare Part A does not cost anything for a lot of seniors, there isn’t a way to cancel it. To unenroll from Medicare Part B, you will have to contact your local Social Security office or call 1-800-772-1213, the national phone number for the SSA.

Changing a Medicare Plan: Switching to a New Plan

There are some ways to change your Medicare plan. Which route you take depends on your current plan and which new plan you choose.

1) Switch to a New Medicare Advantage Plan

If you already have a Medicare Advantage Plan or an Original Medicare plan, you have the option to switch to you’re the new plan you have selected. In this situation, it is not necessary to cancel your old plan. Like we stated before, once you enroll in a new plan, you will be automatically disenrolled from your old one.

2) Switch from a Medicare Advantage Plan to Original Medicare.

You have the option to switch from a Medicare Advantage plan to Original Medicare in one of three ways:

  • Visit your local Social Security Office. You can simply visit or call the office and request to be disenrolled from your current plan. Here, you will be in direct contact with a representative who will be more than happy to help you.
  • Call the Medicare number. Call 1-800-MEDICARE and request disenrollment.
  • Request a disenrollment form directly from your insurer. Your insurer will provide you instruction on how you can fill out the form and return it.

After you complete one of these three steps, you are then eligible to enroll in an Original Medicare plan. A great time to act is during the open enrollment period. You can also switch from Medicare Advantage to standard/Original Medicare) from January 1st to March 31st. However, it should be noted that you can only switch from Medicare Advantage to Medicare during this secondary period, not from original Medicare to Medicare Advantage.

If you want to switch from a Medicare Advantage plan to an Original Medicare one, there is a second option. You don’t just have to do this during AEP. It is your “trial right” period, which is where you can leave your plan after having it for less than one year. Also included in this trial period is the availability to go back to your old Medicare Supplement policy with no medical underwriting required, assuming your old policy is still available. If it isn’t, you will be assisted in choosing a new Supplement policy.

However, you will need to use a “trial right” Special Enrollment Period (SEP) to leave your Medicare Advantage plan during the first 12 months you’re enrolled. This is so you can re-join your Medicare Supplement, or join a new one. You can do this by calling a Medicare representative and asking more about the SEP at 1-800-MEDICARE.

Keep in mind that Original Medicare plans do not include drug coverage. It is recommended by Medicare to get a drug coverage plan, even if you are not currently taking any prescription drugs. If you need coverage for prescription drugs outside of the enrollment period, you will have to pay for your prescriptions out-of-pocket, or you will be charged a late enrollment penalty if you add drug coverage to your plan. You can enroll in a drug coverage plan with the same methods you would use to change your plan.

3) If You Have Additional Coverage

If you have coverage through an employer or other program, it is important to understand their qualifications for continued coverage. In some cases, your program may terminate your coverage if you enroll in a Medicare Advantage Plan. However, it is possible that you can use your Medicare Advantage plan alongside your program’s coverage. It is also important to remember that, if you drop your program or employer’s coverage, you may be permanently disenrolled from that insurance plan.

If you have coverage from Medicare and your employer, there are two types of coverage. Each type of coverage is called a “payer,” with primary and secondary coverage.

  • The primary payer is the insurance that pays first and will pay up to the limits of its coverage.
  • The second payer pays second, and only pays if there are costs that weren’t covered by the primary insurer. But even then, it isn’t guaranteed that all of the costs will be covered.

You will have to understand if your employer is the primary or secondary payer. If they are the secondary payer, you may need to enroll in Medicare Part B.

 

Switching to new Medicare plan is something that could be beneficial to your lifestyle because it will better fit into it. With that being said, however, it can sometimes be a difficult task. That’s why The Best Senior Services are here to help. If you have any questions or confusion, do not hesitate to contact us today. We will connect you with a local licensed agent who will be able to answer everything with you. Call us today at 855.979.8277 or visit our website.

Understanding Medicare is hard. Let’s not make it any more difficult than it has to be.