Category Financial Planning Topics

Feb 3 2024

Do you need life insurance?

Think about your age, your financial situation, and if you have loved ones who depend on your income. If you do decide to shop for life insurance, here are some things to consider.

  1. How much life insurance do you need?

Life insurance helps your loved ones with financial needs when you die. Consider your mortgage and other debts, how much income would need to be replaced, money to cover a funeral, and college for the kids. Add those up, and you’ll have a good idea of how much insurance you’ll need.

2. Term or permanent?

There are two main categories of life insurance:

Term life insurance is the simplest and least expensive option. It covers you for a set period of time. You might consider term life insurance when you have a family that depends on your financial support or while you have a mortgage. For example, you may want a term life policy that lasts until your children are out of school.

Permanent life insurance provides coverage for your entire life as long as you keep up the payments. Because of the length of coverage, it costs more than term life insurance. These policies may have features that offer a cash value that can be used to invest or pay some of the premiums later in life. Permanent life policies are complicated so it’s best to talk to a financial planner when deciding if one is right for you. If you do buy a permanent life policy, make sure to check with your agent each year to see how the policy is doing and if you need to adjust your payments.

3. How much will it cost?

Insurance companies consider things like your age, health, job, and tobacco and alcohol use when setting prices. It will cost more to purchase life insurance as you get older and if you have health problems. Some companies may require a medical exam before selling you life insurance.

4. Who will benefit?

You can leave money to a spouse, children, other family member, or friend. This is known as the policy’s beneficiary. You can also name an institution as your beneficiary, such as a business or charity. And you can choose more than one beneficiary and specify how the money will be divided.

For more information, click here.

Teaching Suggestions:

  • Have students create situations which point out the different reasons for buying Life Insurance.
  • Have students survey several other people to determine their reasons for buying Life Insurance.

Discussion Questions:

  1. What is the relationship between age and the amount a person pays for life insurance?
  2. What personal, social, and financial factors should influence the amount of life insurance a person might desire?
  3. Why might many insurance agents dissuade you from buying low-cost-term insurance?
Jan 20 2024

Money in Retirement

Is your money going to run out in retirement?  If you don’t plan ahead you could face some financial challenges in retirement. The best way to make sure you have money for the long-term to live the life you want to lead in retirement is to get an early start by setting goals and creating a saving and investing plan that will help you achieve those goals. If you’re getting a late start, don’t lose hope. There are ways you can make up some ground.

Start Early

The earlier you start, the less money you’ll need to invest to reach your financial goals. And, there’s a great feature that really helps build wealth. Through the power of compounding, you can earn interest on the money you save and on the interest that money earns. You can watch your money grow over time even if you only put a small amount of money into savings right now.

Set Goals

Consider the lifestyle you want to lead. Here are some important questions to ask yourself as you plan your retirement:

  • Have you thought about major living expenses related to housing, healthcare, food, clothing, and transportation?
  • Do you like to spend money at will or are you the type of person who always lives within a budget?
  •  What types of leisure activities and hobbies do you hope to pursue in retirement?

Make a Plan

Now that you’ve considered your lifestyle and goals, it’s time to make a plan. Investor.gov has free financial planning tools and resources that can help. It’s saving and investing roadmap and Savings Goal Calculator can help guide you as you create a plan that helps you reach your goals. Whenever you’re creating a plan, it’s important to consider your risk tolerance, investment options, fees/costs involved in investing, your debt, and keeping money into an emergency fund.

Contribute to Your Employer’s Retirement Accounts

Contribute to your employer’s retirement accounts, such as a 401(k), 403(b) or 457(b) plan. Most importantly, if your employer contributes to these accounts, take full advantage of these matching funds. Suppose, your employer contributes 50 cents for every dollar you save up to five percent of your salary. If you make $50,000 a year, and contribute at least $2,500 to these accounts, your employer will add an extra $1,250 to that amount. That’s an immediate 50 percent return. Take advantage of the “free money” as no other investment will give you that kind of guaranteed return. Also, start your own Roth or a traditional IRA.

Make Up Ground

If you’re getting a later start, there are ways you can make up some ground. If you’re over 50, you can consider contributing more to your workplace and individual retirement plans. The IRS allows investors to contribute $22,500 per year to a workplace retirement plan, like a 401(k), but will allow you to make an additional $7,500 in “catch-up” contributions if you are over the age of 50. Similarly, you can contribute $6,500 per year to an IRA that you set up yourself, but investors over 50 can contribute an additional $1,000 per year. 

Enough Money

Starting early, setting goals, creating a diversified plan for the long term, making regular contributions to your retirement accounts, and sticking to your plan all adds up to helping to make sure you have enough money in your retirement to live the life you want to lead.

For More Information, click here.

Teaching Suggestions:

  • Have students suggest actions that can be taken at different stages of the adult cycle to have financially successful retirement.
  • Ask students to create a list of non-financial actions that a person can take to plan for a fulfilling retirement.
  • Create a list of factors that influence the spending patterns of retired individuals.

Discussion Questions:

  1. What financial and personal difficulties are associated with inadequate retirement planning?
  2. Why is an IRA still beneficial for retirement planning even for individuals who may not qualify for the contribution deduction?
Jan 6 2024

Artificial Intelligence in Forecasting Severe Storms, Hurricanes, Floods, and Wildfires

Government Accounting Office (GAO) found that machine learning, a type of artificial intelligence (AI) that uses algorithms to identify patterns in information, is being applied to forecasting models for natural hazards—such as severe storms, hurricanes, floods, and wildfires—that can lead to natural disasters. A goal is to improve the warning time for severe storms.

 GAO identified potential benefits of applying machine learning to weather forecasting, including:

  • Reducing the time required to make forecasts.
  • Increasing model accuracy.
  • Reducing the uncertainty of model output.

Forecasting natural disasters using machine learning GAO also identified challenges to the use of machine learning. For example:

  1. Data limitations hamper the training of machine learning models and can reduce accuracy
  2. A lack of trust and understanding of the algorithms as well as concerns about bias
  3. Limited coordination and collaboration create challenges for fully developing some machine learning models.
  4. Workforce and resource gaps also create challenges.

For More Information, click here.

Teaching Suggestions:

  • Make a list of potential benefits of machine learning to weather forecasting in relation to insurance costs.
  • Make a list of potential dangers using machine learning in forecasting natural disasters in relation to insurance costs.

Discussion Questions:

  1. Do you believe that insurance premiums should be calculated based upon forecasting models for natural hazards. such as severe storms, hurricanes, floods, and wild fires? 
  2. What are some challenges to the use of machine learning in forecasting natural disasters?
Dec 23 2023

Global Consumer Protection

In late 2023, the Federal Trade Commission (FTC) signed a cooperation agreement with the consumer protection authorities of the four Latin American countries–Chile, Colombia, Mexico, and Peru– to combat fraud both inside and outside the United States.

The Multilateral Memorandum of Understanding (MMOU) promotes cooperation across Latin America, including information-sharing to further investigations and policy development, as well as other types of assistance on cross-border enforcement matters.

Low-cost online communications allow scammers to target consumers regardless of where they live. The increasingly global nature of commerce—and fraud—poses an enforcement challenge for consumer protection authorities around the world. From 2019 to 2022, fraud reports against companies in Chile, Colombia, Mexico and Peru more than doubled, from 6,103 to 12,869. At the same time, total losses reported by consumers skyrocketed—from $39.4 million in 2019 to $237.9 million in 2022. Reports about online shopping were the top complaint during this same period, with losses increasing from $3.8 million in 2019 to $49.5 million in 2022. Social media was the top contact method consumers cited at 41 percent of reports in 2022. These four countries represent about 225 million people and combined make up the eighth biggest economy in the world.

In signing the MMOU, the FTC and consumer protection authorities in these countries agreed to cooperate in investigations related to violations of consumer protection laws. Specifically, the MMOU encourages participants to:

  • Share complaints submitted by consumers;
  • Provide investigative assistance, with appropriate safeguards, including sharing of information relating to defendants, their assets and/or their deceptive conduct;
  • Coordinate enforcement actions against cross-border violations of law;
  • Provide other practical case assistance, where appropriate, in the enforcement of consumer protection laws, such as gathering evidence;
  • Participate in econsumer.gov, which allows consumers from around the world to report fraud and provides consumer protection agencies around the world with access to important data about potential violations;
  • Cooperate on non-investigatory matters such as exchanging approaches to consumer protection policy issues and participating in staff exchanges, joint training programs and workshops.


For More Information, click here.

Teaching Suggestions:

  • Ask students to debate the issue “Should governmental agencies be involved in protecting consumers”? Why or why not?
  • Ask students to make a list of national and international consumer protection agencies where they can report international and national scams and to learn about other steps they can take to combat fraud.

Discussion Questions:

  1. What actions can consumers take to protect themselves from national and international scams?
  2. How can your complaints help consumer protection agencies around the world to spot trends and work together to prevent international scams?
Dec 9 2023

Avoid Cryptocurrency Scams

How much do you know about cryptocurrency? If your answer is “not much,” that’s exactly what crypto scammers want to hear. And that’s exactly who Celsius Network, LLC company targeted with its false and misleading claims, according to a lawsuit filed by the Federal Trade Commission (FTC).

According to the FTC, Celsius marketed and sold financial services using YouTube and Twitter, now X, to promote marketing videos that were full of false and misleading claims. For example, Celsius claimed its crypto platform was safer and more stable than a bank. (It wasn’t.) And it told people that depositing crypto onto its platform came with a “no risk” promise that they’d earn high interest on their deposits. (A lie.) Even worse, the FTC claims the company used people’s crypto deposits without permission to spend, trade, invest, or pay business expenses. When Celsius started running out of money, it blocked people’s account access, preventing them from withdrawing their crypto. Now, Celsius is in bankruptcy, and consumers are unlikely to get all their crypto back.

Here’s how to avoid a cryptocurrency-related scam:

  • Don’t trust people who make big promises or guarantees. Only scammers promise “no risk” and guarantee high returns.
  • Research the company or cryptocurrency platform. Search online for the company or crypto platform name, plus “review,” “scam,” or “complaint” to see what people say.
  • Know that cryptocurrency accounts are not backed by a government like traditional FDIC-backed bank accounts.If something happens to your crypto account or funds, the government may not have an obligation to step in and help get your money back.
  • Learn about cryptocurrency and scams. Scammers take advantage of people’s understanding (or not) of cryptocurrency and how it works. Visit ftc.gov/cryptocurrency to learn more.

Using a crypto platform that isn’t living up to its promises or guarantees? Tell the FTC at ReportFraud.ftc.gov.

For more information, click here.

Teaching Suggestions:

  • Ask students to create a list of factors to consider before investing in cryptocurrencies.
  • Have students prepare a short paper describing a portfolio of cryptocurrencies they might consider now or in the future.
  • Have students suggest exceptions to the disadvantages of investing in cryptocurrencies.

Discussion Questions:

  1. Are there any attractive aspects of investing in cryptocurrencies?
  2. What economic and other factors would be the main concerns when investing in cryptocurrencies?
  3. What actions can you take to avoid cryptocurrency scams?
Nov 25 2023

FINANCIAL SUCCESS FOR CHILDREN   

Money troubles often start as bad habits when young. Since only about half of the U.S. states offer financial literacy education, guidance from parents is vital. To avoid a life of money difficulties, consider these strategies to develop financial competency among young people:

  • Connect money lessons with daily activities. Talk to children about money decisions when shopping and paying bills. Provide hands-on learning activities, such as making a shopping list or creating a family budget. Be a good financial role model by planning ahead, practicing self-control, disciplined spending, and ongoing learning. When shopping, talk about needs and wants, have children pay for low-cost items, and discuss package sizes and brands.
  • Make use of money jars. At every age, three jars labeled SAVE, SPEND, and SHARE can provide a hands-on and fun experience for learning wise money management. Allowances, money gifts, and pay from a job can be divided among the jars.  If some money is kept in a bank account, instead of in the jars, slips of paper with amounts can be put in the jars as tangible proof of available funds for each category.
  • Encourage entrepreneurial activities to earn money. Starting a business or working part-time can teach creative thinking, problem solving, resiliency, and curiosity.
  • Start a savings account. Connect children early to saving for wise money management and to practice delayed gratification. Start with a basic savings account. As they get older, teach them about other savings plans (money market account, certificate of deposit) and other banking services. Connect savings to various goals. Research indicates that young people with a savings account are three times more likely to attend college, and four times more likely to graduate.  

Children with a strong financial foundation will be on a path to avoiding future money stress and obtaining long-term security.

For additional information on the financial success of children, click here.

Teaching Suggestions

  • Have students talk to others to learn about actions people have taken to teach children about wise money management and smart shopping.
  • Have students demonstrate (role play) how to teach wise money management or smart shopping to a young person.

Discussion Questions 

  1. What did you learn about wise money management and smart shopping when you were young?
  2. What actions might be taken with children to help them learn wise money management and smart shopping?  
Nov 11 2023

What is the Senior Medicare Patrol (SMP)?

The SMP is a national program to educate Medicare beneficiaries about Medicare fraud, errors, and abuse.  Medicare loses an estimated $60 billion each year due to fraud, errors, and abuse, though that number is sometimes impossible to measure. Every day, issues related to these problems affect people across the country, often costing them time, money, and well-being.

Medicare-related errors contribute to this annual loss even though errors can be honest health care billing mistakes. However, repeated errors by a doctor or provider could be considered a red flag of potential fraud or abuse if not corrected.

Some common examples of fraud, errors, or abuse could include:

  • Charging for services or supplies that were not provided
  • Misrepresenting a diagnosis, a person’s identity, the service provided, or other facts to justify payment
  • Prescribing or providing excessive or unnecessary tests and services

How to stop Medicare fraud?

If you are a Medicare beneficiary, start by learning how to read your Medicare statements! Read your Medicare Summary Notice (MSN) or Explanation of Benefits (EOB) in the paper form that is mailed to you, or go online to Medicare.gov and review claims digitally.

Caregivers, help by educating yourself and your clients or loved ones on how to prevent and detect health care fraud, errors, and abuse. Be on the lookout for things like boxes of knee braces (known as durable medical equipment, or DME) lying around the house. This is a common scam and may mean your client or loved one has been a victim. Remind your clients or loved ones to never give out their Medicare number or other personal information over the phone.

Families, help by talking to your loved ones about protecting their Medicare number just as they would a credit card number. Encourage them to check their Medicare statements for fraud, errors, or abuse and never give out their Medicare number over the phone for any reason. Help your loved ones create a Medicare.gov account to access their Medicare claims online or remind them to open and review their statements when they come in the mail every three months.

Partners and professionals, help by sharing SMP information on social media, referring clients and consumers to the SMP, and inviting the SMP to speak during a shared event. Identify ways to collaborate on mission-related topics and information.

Health care providers, help by talking to patients about health care-related scams such as those related to durable medical equipment, genetic testing, or new, plastic, or chipped Medicare cards. Reassure them that your office and their other doctors’ offices are not going to call to offer them services or equipment.

Lastly, as a community, help by looking out for your older neighbors. If you overhear someone talking about Medicare, don’t be afraid to give information about the local SMP and SHIP. Encourage those you know to talk to a trusted source about their Medicare questions and tell your neighbors about the most recent Medicare scams. Consider volunteering with your local SMP!

For more information, go to: https://smpresource.org/medicare-fraud-prevention-week-week

Teaching Suggestions:

  • Ask students to make a list of the common examples of Medicare fraud or abuse.
  • What are some actions all of us can take to stop Medicare fraud?

Discussion Questions:

  1. What is the Senior Medicare Patrol? How does it help in preventing Medicare fraud?
  2. How can Medicare beneficiaries, caretakers, families, partners, and professionals, healthcare providers, and the community help in preventing Medicare fraud?
Oct 28 2023

The Future of Social Security

In the annual Trustees Report, projections are made under three alternative sets of economic, demographic, and programmatic assumptions. Under one of these sets (labeled “Low Cost”) in the 2023 Trustees Report, the combined trust funds would be temporarily depleted before returning to positive levels by the end of the 75 year projection period. Under the other two sets (the “Intermediate” and “High Cost”) in the 2023 Trustees Report, the combined trust fund reserves become depleted within the next 15 years. The intermediate assumptions reflect the Trustees’ best estimate of future experience.

Some benefits could be paid even if the trust fund reserves are depleted. For example, under the intermediate assumptions, annual income to the trust funds is projected to equal about eighty percent of program cost once the trust fund reserves become depleted. If no legislation has been enacted to restore long-term solvency by that time, about three-quarters of scheduled benefits could be paid in each year thereafter.

The Trustees believe that extensive public discussion and analysis of the long-range financing problems of the Social Security program are essential in developing broad support for changes to restore the long-range balance of the program.

For more information, go to: ssa.gov/OACT/ProgData/fundFAQ.html

Teaching Suggestions:

  • Ask students if the Social Security and Medicare programs will continue to face significant financing issues.  How can these issues be addressed now to mitigate future problems?
  • Under current law, how are the Social Security and Medicare programs financed?
  • Research project: Ask students to research how large are the assets reserves currently in the trust funds.

Discussion Questions:

  1. What are the annual income and costs for the Social Security trust funds?
  2. Currently, do the Social Security trust funds have an annual surplus or deficit?
  3. How does 2023 outlook for Social Security compare to last year’s outlook?
Oct 14 2023

Planning for Retirement

Do you have a retirement plan? It is never too early or too late to plan for your future. Even if you don’t have a plan in place, taking small steps now can make a big difference for your future retirement. Benefits.gov can help you plan and find retirement benefits. This article will share tips for savings and benefits that may be able to help you through retirement.

What should I do first?

Start saving money. If your employer offers a retirement savings plan, like a 401(k), sign up and contribute what you can. If your employer does not offer a retirement plan, you can put money in an Individual Retirement Arrangement (IRA).

What are Social Security retirement benefits?

The U.S. Social Security Administration (SSA) manages Social Security retirement benefits. The monthly payments are based on how much you earned when you worked. Social Security payments can help in retirement, but it may not be enough to cover all your expenses. SSA’s retirement estimator tool can estimate how much you will get in benefits at different ages.

Am I eligible for Social Security retirement benefits?

When you work and pay Social Security taxes, you earn credits for Social Security benefits. The number of credits you need to get retirement benefits is based on when you were born. If you were born in 1929 or later, you need 40 credits. Usually, this is 10 years of work. If you never worked, you may be able to get spouse’s retirement benefits if you are at least 62 and your spouse gets retirement or disability benefits.

When should I retire?

Choosing when to retire is up to you and will depend on your financial situation. You will receive less in your Social Security benefits if you retire before full retirement age. Find your full retirement age in the retirement age chart.

Are other benefits available?

Supplemental Security Income (SSI) helps people with little or no income and who are 65 or older, blind, or have a disability. SSI benefits are paid monthly. The amount you get is based on your income, living arrangements, and other factors

You may be eligible for benefits from the Federal Employees Retirement System (FERS) if you are a federal employee.

To find out more about retirement benefits you may be eligible for check out the Benefit Finder.

For more information, go to:  Planning for Retirement | Benefits.gov

Teaching Suggestions:

  • Ask students to debate the issue–“It is never too early or too late to plan for your future”.
  • Ask students to outline steps they can take now to secure their retirement?
  • Should you take Social Security benefits before your full retirement? Why or why not?

Discussion Questions:

  1. How can taking small steps now make a big difference for your future retirement?
  2. What steps can you take to save your retirement if your employer does not offer a retirement plan?
  3. Who is eligible for Social Security benefits?
Sep 30 2023

MUSEUM OF SAVING

With an increasing influence of finance, credit, and business on our lives, the Museum of Saving is an innovative, entertaining location. Families, adults, teens, and children are provided with a clear-and-simple approach to saving and investing for improved financial literacy. The museum’s mission is “to contribute to spreading financial education to help people make rational and informed decisions and act in ways to achieve the priorities of their lives.”

Through a combination of education and entertainment, the learning through play approach of the museum uses technology and interactivity to offer:

  • An introduction to economic history that includes the role of money, trade, loans, early banking activities, and major financial crises.
  • An overview of the most common financial instruments. 
  • Themed tours with audio-visual and interactive labs.
  • A multidisciplinary (economics, literature, cinema) view of famous people.
  • Gamification videos and apps to test and reward money management knowledge and skills.

While the Museum of Saving is based in Italy, you can access the exhibits online.

For additional information on the Museum of Saving, click here.

Virtual Tour:  

Teaching Suggestions

  • Have students talk to others to obtain advice on how to best learn about saving and investing.
  • Have students take a virtual tour of the Museum of Saving. What features do students consider to be most interesting and informative?

Discussion Questions 

  1. What actions do you recommend for a person to learn more about successful saving and investing?
  2. Describe factors a person might consider when evaluating different savings and investing alternatives.