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| PARAGON Perspectives:
2nd Quarter 2010 | | Greetings!
Happy Spring! After a long and cold winter all across the country, it seems that the warmer weather has finally arrived.
PARAGON is pleased to share our 2010 second quarter newsletter with you.
Jon Castle has prepared a timely article on the recently passed healthcare legislation, to help clients understand what the changes likely mean to them.
Michelle Ash provides information and details about PARAGON's new Investor Education Series - evening workshops, economic briefings, and portfolio commentary - occurring every six weeks exclusively for clients and their guests.
Mike Carignan discusses ways to "get a deal" on anything from dining out to cars. As we've all likely heard in the media, the recession may technically be over, but many people's wallets are still feeling a pinch. Mike discusses ways to keep more money in your pocket.
We hope you'll find this edition interesting and informative.
~PARAGON Team |
De-Mystifying Obama-Care
by Jon Castle, CFP, ChFC
It has been said that there are two things that you do not want to watch being made - sausage and legislation! Boy, has that been the case with the recent Health Care Reform legislation that has just been enacted! While certainly an historic event, I believe that all of us, no matter what our personal political views may happen to be, can agree that it was painful and sometimes ugly to watch. Misinformation, spin-doctoring, mud-slinging, and in many cases, outright lying have accompanied the creation of this bill.
Well, it ain't over yet! Here's where we are right now: On March 23, 2010, the President signed into law the Patient Protection and Affordable Care Act (H.R. 3590) - otherwise known as the "Reform Act." HOWEVER - another bill - called the Health Care & Education Affordability Reconciliation Act - has been approved by the House and is expected to pass in the Senate. It modifies many issues and concerns in the Reform Act; it has not yet passed, and the Republicans are expected to mount strong opposition to it.
Even if it passes - there are no less than 11 States that oppose the bill and are going to fight it in court, as there are some provisions in the Reform Act that really do appear to be highly questionable as to their constitutionality. It appears that it will be a long, ugly fight - both on Capitol Hill, as well as in the Supreme Court. Needless to say, it will be interesting to watch - as it unfolds - but in general, definitely a new direction in our Health Care System.
Like everyone, I have my own opinions as to whether the Reform Act is good or bad. However, I would like to share with you some of the provisions in the Act that, if they come to fruition - will likely have an impact upon your retirement planning. There are many, many more parts of the bill - but below are some of the provisions.
Where appropriate - I have inserted my thoughts and opinions as to how these provisions may effect 1) patients, 2) insurance companies, 3) the medical industry, and 4) the economy in general. For these provisions to be a "good" thing for America - they essentially have to be a win-win-win-win for all involved.
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A temporary national high-risk pool will go into effect within 90 days. This means that previously uninsurable people with no employer provided health insurance will be able to get insurance. (At what cost? Unknown at this time. But it will be available.)
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Insurance companies will be restricted regarding excessive waiting periods (over 90 days), cancelling your insurance, and excluding pre-existing conditions for children. (In general, I think this is certainly good for just about everyone - and insurance companies should be able to compensate for this and still be ok.)
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Limitations on insurance companies' ability to impose annual limits on the dollar value of coverage. (Insurance companies will likely reprice and compensate for this based upon claims experience - sort of like being forced to buy the highest coverage available on your car, I would think...)
- Children can stay on their parents' insurance policies until they are 26. (Given the current difficulty with even top graduating students finding jobs - makes sense to me. If they could find jobs, they would be insured otherwise anyway - so this should be a wash for most everyone but good for the kids.)
- New insurance must pay the full cost of specified preventive care. (Now this seems to be plain common sense! In the long run it will probably be good for everyone as the initial cost of preventive care will likely reduce the cost of later emergency treatments.)
- Starting in 2011, health insurers must make rebates to enrollees if medical loss ratios are lower than specified levels. (Wow. Now I do worry about this one. This concept undercuts how insurance was designed to work in the first place. If you rebate non-loss profits - how do you insure the losses that you do suffer and still remain profitable?)
- Effective January 2011, contributions to employee flexible spending accounts will be limited to $2500 per year and you won't be able to use these accounts for non-prescription drugs.
- The Reform Act requires employers with more than 200 employees to automatically enroll them into health plans unless the employee already has coverage from another source.
- Employers will be taxed on Medicare Part D subsidies they receive for maintaining retiree drug coverage for Medicare-eligible retirees. (This will likely deter employee sponsored retiree drug coverage).
- Medicare tax will increase from 1.45% to 2.35% for individuals with annual income over $200K and for couples with income over $250K. For these couples - net investment income is included in the Medicare Tax Base. (This is new - previously only W-2 wages were included. Bad for the wealthy and high income - good for Medicare).
- There are NEW TAXES levied on the health insurance industry, pharmaceutical companies, medical device manufacturers, and LARGE employers who do not provide health insurance to their employees. SMALL businesses (under 50 employees) do not appear to be directly affected at all.
What will be the likely consequences of all these changes? That remains unknown. It is likely that it will be decades before economists can truly assess the positive and negative impacts of these changes. What we do know is that the stock market did not react negatively to the passage of the bill, and other developed countries that have instituted health care reform of a simliar nature have continued to enjoy economic growth over the years, even within the health insurance, medical, and medical-related industries. I remain optimistic that America, the heart of Capitalism, Entrepreneurship, Innovation, and Freedom - will remain so, and continue to heal and grow as the pinnacle of liberty and prosperity for many years to come.
This newsletter is intended for informational purposes only. All information contained herein is obtained from sources deemed reliable but not guaranteed. No specific tax or legal advice is given nor intended. ALL investing involves the potential of loss - including invested principal. Indices quoted are general barometers of security price movement. You cannot invest directly in an index. Past performance is not a guarantee of future performance. This message is NOT personal investment advice and should not be taken as such, nor is it a recommendation to buy or sell any security. | |
Introducing our Investor Education Series
by Michelle Ash, CFP, CDFA
 We at PARAGON have been pleased to introduce out Investor Education Series, which began in January of this year. I'd like to take a few moments to share with you more information about why we hope you'll join us for as many of these events as possible. In 2010, the Investor Education Series is a series of eight workshops occurring approximately every six weeks, exclusively for clients and their guests, to discuss various topics. There are several reasons PARAGON has chosen to host these regular evening events.
Economic and market conditions over the last two years have taught all of us a lot. Since the majority of our clients are in or nearing retirement, we realize that the "Great Recession" was a concerning time for many. And while unfortunately none of us has the crystal ball to see the future, history offers us many clues regarding what one might frequently expect during both positive and negative market conditions. One of the most important lessons this recent recession offers us, like many other major life events, is that what happens is often less important than how you react to it. To that end, PARAGON's Investor Education Series will include topics at each workshop to help clients be more successful investors. Being a successful investor often has more to do with an investor's behavior, than it does any particular investment or time frame of the market. Each workshop will feature information to help clients have better insights into their own thoughts and actions related to their money, and ways to be more successful. Each workshop will likely have a very different feel, as some are geared towards being more technical while others are geared more towards investor psychology.
Our first workshop, "Myths versus Realities" was an example of a very technical workshop. We realize that some clients enjoy
the technical aspects of investing and financial planning, while others clients might find it boring or feel it is over their heads. Our second workshop, "Your True Purpose for Money" was entirely different and was entirely about investor psychology and was geared at helping clients examine the underlying reasons they make and are satisfied with, or are frustrated with, their money decisions. Some clients really enjoyed this approach and felt they benefited greatly from it, while others felt that it was too "touchy-feely" and not really how they look at financial matters. Future workshops may be a blend of these approaches, or may take an entirely different approach. Ultimately, though, we would encourage every client to not draw a conclusion about future workshops based solely on having attended one. As we make these a more regular feature of our relationship with clients, we hope to find a balance of topics that will cause all presentations to have something appealing for everyone.
To that end, e ach quarter our workshops will include an economic outlook and portfolio commentary component. Our hope is that this forum will give clients the opportunity for a more frequent update about our views on current events and how they are affecting portfolio management. Since each of these sessions will also include a Question and Answer segment, clients will also benefit from getting to hear the questions other PARAGON clients are asking.
Finally, we look forward to seeing clients at events for the opportunity to stay more current in clients' lives than is otherwise possible when just meeting in the office a couple of times per year. We encourage you to call us for a personal meeting anytime life events bring changing circumstances for which we need to update the financial planning work and assumptions we've made. But during those times where life seems relatively routine and a client might otherwise not particularly prioritize meeting, we hope you'll take advantage of these workshops as a way to stay abreast of current topics and conditions, and our recommendations on how to be as successful as possible.
Please mark your calendars for the remaining events in 2009:
- Thursday, April 22: Are you a Biased Investor? And Economic and Portfolio Updates
- Tuesday, June 8
- Tuesday, July 13
- Wednesday, September 1
- Tuesday, October 19
- Wednesday, December 1
(Topics for June - December workshops will be published closer to the event.)
Please watch your e-mail for invitations and further details. |
How Do I Get a Deal?
by Mike Carignan, CRPC
 Over the course of the last year I have heard one question more than any other from a variety of sources, "How do I make my money go further?" We naturally gravitate to answers that have to do with rates of return, withdrawal schedules and tax rates now and in the future, especially for those in retirement. What if you're still working, between jobs, or still in school? There are some smaller day-to-day ways to help reduce spending without reducing your lifestyle.
Let's take a look at some of the ways to save a little money while still being able to enjoy the things you are already doing. Whether it's saving on small expenses such as office expenses at home, saving on dinner out with your spouse or buying a new car there are ways to find a deal just a mouse click away. With a little research and a moderate amount of time you can keep some more of that hard earned money in your pocket. As the old saying goes "a penny saved is a penny earned".
Let's start with one of the smaller expenses. If you have a home office you probably hate having to go out and buy ink. It seems that the cost of ink keeps going up to the point where some of the cartridges actually cost more than the basic printers. Ordering cartridges online can save money with just a little bit of planning. Saving ink, which has the added benefit of being good for the environment, may be as easy as changing the font you use. Apparently not all fonts are created equal. It is surprising that you could save ~$20/year by just changing your font. For more information, go to www.printer.com/news/42010-146/Printing-Costs-Does-Font-Choice-Make-a-Difference.html.
If you want to save on dining expenses but still like to go out to eat try some of the sites that allow you to print coupons directly from the web. There's no need to sort through the Sunday paper looking for the one hidden coupon for your grandkids' favorite restaurant. Just Google restaurant coupons and you'll see listings for printable coupons from a wide variety of restaurants from North Beach Bistro to Nineteenat the TPC Sawgrass.
If you are looking for vacations and entertainment, there are savings in this category too. For example, there are sites that allow you to golf at a discount (www.golfnow.com), go Kayaking in Amelia Island for $15, or maybe on a 4 day cruise for under $330 (www.vacationstogo.com).
What about big ticket items like a car or boat? These are a little tougher, but with some research you'll either be able to buy them right there from your computer or be able to walk into a dealership knowing the exact cost to purchase your desired car from carmax.com. They'll even figure the taxes and transport charges for you. Carmax may not be the best deal, but it certainly gives you a ceiling to work with. Maybe you bought your first car through the classifieds in the local paper but you wonder why the selection is so sparse now. Try www.craigslist.com. This is where you'll find classified listings for almost anything, and they're listed by city to make it easier. Speaking of Craigslist and classified ads, if you need to sell something on Craigslist, you can post an ad for free. This is the reason the printed Classifieds have become so limited.
As with anything new, there may be a certain amount of anxiety the first few time you buy online. For those of you that are like me and hate spam, make sure you set up a free e-mail account just for signing up to these sites. Just go get a google or yahoo e-mail account for free and you'll never have your day to day e-mail account clogged with endless spam. One thing to always keep in mind, be careful with your personal and banking information when buying online.
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PARAGON is still accepting clients who care deeply about their financial futures and desire comprehensive Wealth Management or Retirement, Income, or Estate Planning.
Please feel free to introduce us to those who might be a match!
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Investment advisory services provided by Paragon Wealth Strategies, LLC, a registered investment advisor.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP(R), CERTIFIED FINANCIAL PLANNER(tm) and federally registered CFP (with flame logo) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. |
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