Resident Lunch and Learn Key Aspects of Financial Wellness - - PowerPoint PPT Presentation

Resident Lunch and Learn Key Aspects of Financial Wellness

Financial Wellness Financial decisions (or lack thereof) made now last forever

• Higher rates on loans (including mortgages)
• Denial of loans
• Stress
• Lowered productivity on the job
• Lowered credit score
• Denial of housing or employment
• Future relationship problems

Financial Definitions

• A qualified plan established by employers to which eligible

employees may make salary deferral (salary reduction) contributions on a post-tax and/or pretax basis. Employers

• ffering a 401(k) plan may make matching or non-elective

contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.

401(k)

• The nonprofit’s equivalent of a 401(k). Because of that

status, the fees associated with managing the program are less.

403(b)

Financial Definitions

• A Roth IRA differs from a traditional IRA because you pay

the taxes now at your current tax rate. This means you do not pay taxes on it when you are eligible to make withdrawals from the account (because it was already taxed).

Roth IRA (Individual Retirement Account)

• A Traditional IRA is one where your contributions are not

taxed until you retire. Contributions are also tax deductible, so if you contribute the maximum ($5,500 for the 2013 tax year; $6,500 if you're older than 50) your income is reduced by $5,500/$6,500, which, along with

• ther deductions, could reduce the amount of taxes you

have to pay this year.

Traditional IRA (Individual Retirement Account)

Financial Definitions

• Stocks: When you buy a stock of a public company, you

become a partial owner of the company. In some cases, you can even vote on company rules. You can buy stock in any company that is publicly traded on exchanges (such as the New York Stock Exchange or the NASDAQ).

• Bonds: When you buy a bond, you basically lend money

to a government or business, and they pay you back with

• interest. Bonds can be bought at all levels: national, state,

county, municipal, and even from private businesses.

Stocks /Bonds

• Groups of stocks (or bonds) that financial management

companies might choose to diversify your investments and lower your risk. However, there can be hefty fees associated with managing these accounts.

Mutual Funds

Financial Definitions

• A tax-advantaged savings plan intended to help save for
• college. A 529 can act like an IRA, compounding interest

year after year to help families set aside funds for their children's college education. There are additional advantages in some states.

529 Plan

• The interest rate and expenses for the whole year,

representing — in a single number — the fees associated with paying back a loan. In general, the lower the number, the better.

APR (Annual Percent Rate)

Managing Your Money

Do Your Homework

• Loans
• Benefits

Make a Budget

• Fixed Expenses
• Variable Expenses

Goals

• Savings
• Emergency Fund
• Retirement Savings
• Specific Project

Be Proactive

• Work with your lenders

Managing Your Money

• 1. www.mint.com
• 2. Excel templates (like the one below)
• 3. www.quicken.com

Managing Your Money Federal Loan Resources  Toll-free telephone: 800-4ED-AID (1-800-433-3243)  StudentAid.ed.gov - U.S. Department of Education Federal Student Aid student gateway – find information on federal student aid, the

• ffice of the Ombudsman, and repayment plans for federal loans

 Studentaid.ed.gov/publicservice – PSLF Employment Certification Package  Fafsa.ed.gov - FAFSA (Free Application for Federal Student Aid)  NSLDS.ed.gov – National Student Loan Data System – the U.S. Department of Education’s central database for student aid

Managing Your Money Federal Loan Resources www.PIN.ed.gov – retrieve the pin you need to complete the FAFSA

• r access NSLDS

StudentLoans.gov – information from the U.S. Department of Education about managing your Federal Direct Loans Loanconsolidation.ed.gov - information from the U.S. Department

• f Education about consolidation loans

Myedaccount.com – manage your Federal Direct Loans online Don’t know who services your Federal Student Loan any more? http://www.accessgroup.org/servicers

What affects your credit score

Get your credit report at least once a year Lock up cards, but don’t cancel them Watch how many “hard inquiries” you have Pay on time Keep your balances low

What affects your credit score

• Get a credit card if you don’t have one
• Add an installment loan into the mix
• Pay down your credit cards
• Use less than 25% of your available credit
• Check your limits
• Dust off an old card
• Get some goodwill
• Dispute old negatives
• Fight significant errors

What affects your credit score

• Paying late
• Not paying at all
• Having an account charged off
• Having an account sent to collections
• Defaulting on a loan
• Filing bankruptcy
• Having your home foreclosed
• Getting a judgment

What affects your credit score

• High credit card balances
• Maxed out credit cards
• Closing credit cards that still have balances
• Closing old credit cards
• Closing cards with available credit
• Applying for several credit cards or loans
• Having only credit cards or only loans

What affects your credit score

• Bank overdrafts
• Your income
• Insurance payments
• Child support and alimony
• Utility and cell phone payments
• Rent payments
• Checking your own credit
• Your interest rate
• Credit counseling
• Your age

What Products Should You Consider

• Life Insurance
• Disability
• Personal Lines (Auto &

Renters)

• Dental Insurance
• Travel Insurance
• PDA Insurance
• Medical Insurance
• Pet Insurance
• Debt Consolidation
• ID Theft

Insurance Definitions

• The process of selecting risks for insurance and classifying

them according to their degrees of insurability so that the appropriate rates may be assigned. It also includes rejecting applicants.

Underwriting

• The right to purchase insurance without physical

examination; the present and past physical condition of the applicant are not considered.

Guarantee Issue

• An insurance offer that only requires the applicant to

answer a small number of medical and/or lifestyle questions to determine eligibility to purchase. On occasion, additional underwriting is required.

Simplified Issue

• Insurance salesperson or company that searches the

marketplace in the interest of clients, not insurance

• companies. An agent can represent either the insurance

company or the insured.

Broker / Agent

Understanding Insurance

• Coverage issued to and underwritten for an individual.

Individual Coverage

• A policy issued through a group entity, usually an
• association. Individuals cannot be singled out for an

increase in rates (aka a rate action).

Group Coverage

• A demand made by the insured, or the insured's

beneficiary, for payment of the benefits as provided by the policy

Claim

Insurance Definitions

• The MOST significant term to understand.
• IF you are unable to do your specific job, then you

are eligible for benefits.

Own Occupation

• This means that once you are able to return to

work in ANY capacity, your benefits may reduce or stop.

Any Occupation

• The length of time before benefits are payable on a

claim.

Waiting Period

• The ability to continue receiving part of your

monthly benefit while returning to work after a disability.

Residual/Partial Disability Benefit

• Protects your monthly benefits against inflation by

steadily increasing it at scheduled intervals.

Cost of Living Adjustment

Insurance Definitions

• The person who you designate to receive the proceeds of

the policy if you were to die.

• May help with avoiding certain estate taxes or probate

depending on state laws.

Beneficiary

• This means you are not liable to pay the premium should

you become disabled, however the coverage remains active.

Waiver of Premium

• If you are terminally ill under the policy provisions, you are

eligible to receive part of your death benefit early to help cover costs/expenses.

Accelerated Death Benefit

• If a claim occurs due to an accident, AD&D coverage will

provide additional benefits in addition to your life insurance face amount.

Accidental Death and Dismemberment

Understanding Insurance

Ensure your children have funds for college Make sure the mortgage and other bills get paid Cover your student loan debt

Understanding Insurance

Coverage for a specific length of time Life insurance

• nly, no cash

value – lower cost Much like renting an apartment

Term Life

Coverage for your entire life Builds cash value, can borrow against the policy – higher costs Much like buying a house – return

• n investment

can vary

Universal / Whole Life

Understanding Life Insurance

How Much Do you Need? http://www.aapinsurance.com/insurance-calculator.html

Who is The AAP Insurance Program

 A resource to members for over 60 Years  Insurance product offerings with discounts and plans only available to members and their families  A partnership between the AAP, New York Life and USI Affinity  New in 2013: An educational resource for financial wellness

Graduating Resident Complimentary Insurance Program

Residents under age 45, active member $100,000 one year complimentary life insurance $1,000 a month disability benefits Ability to add to both policy amounts with limited or no underwriting Continue coverage without underwriting

See marketing materials for actual offer details Please see marketing material for exact

• ffer and eligibility details

Who is The AAP Insurance Program

www.aapinsurance.com

Who is The AAP Insurance Program

Questions?

Call us at 1.800.257.3220 www.aapinsurance.com Text me (David at USI Affinity) at 1-312-608-4913 Email david.thomas@usiaffinity.com