Greg Nicholaides

By Dinah Wisenberg Brin – ThinkAdvisor

August 10, 2022

The consumer price index data for July, released Wednesday, shows 8.5% inflation over the past 12 months before a seasonal adjustment and was unchanged from June to July on a seasonally adjusted basis. In June, prices rose by 9.1% over 12 months and 1.3% from May.

Based on this data, the Senior Citizens League estimates the Social Security cost-of-living adjustment, or COLA, for 2023 could be 9.6%, lower than the 10.5% it predicted last month. A 9.6% COLA would be the biggest increase since 1981. The adjustment would increase the average retiree benefit of $1,656 by $159, according to the league.

If inflation runs “hot” or higher than the recent average, the COLA could be 10.1%; if inflation runs “cold” or lower than the recent average, the COLA could be 9.3%, according to the advocacy group.

Mary Johnson, the league’s Social Security and Medicare policy analyst, bases monthly COLA estimates on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, known as the CPI-W.

“A high COLA will be eagerly anticipated to address an ongoing shortfall in benefits that Social Security beneficiaries are experiencing in 2022 as inflation runs higher than their 5.9% COLA,” Johnson said in a statement. “A $1,656 benefit is short about $58 a month and by a total of $373.80 year to date.”

The annual COLA underscores the financial pressures that many Social Security recipients face.  Thirty-seven percent of participants in the Senior Citizens League’s new Seniors Priority Survey reported they received low-income assistance in 2021. This appears to be more than double the 16% receiving needs-based assistance before the pandemic, as reported by the U.S. Census Bureau, according to Johnson.

“This suggests that the pandemic and inflation have caused significantly higher numbers of adults living on fixed incomes to turn to these programs to supplement their Social Security and Medicare benefits as prices have continued to climb,” she said.

“This group of older and disabled Social Security recipients are at risk of experiencing low-income assistance benefit cuts when the COLA boosts their Social Security income … in 2023. In 2022, when the COLA is 5.9%, some 14% of survey participants said their low-income assistance was reduced due to their COLA, and another 6% reported losing access to one or more programs altogether when the COLA boosted their income over the limit,” Johnson explained.

The league surveyed more than 2,557 participants from May through July 2022.

When Will the 2023 Social Security COLA Be Announced?

There are only two months of consumer price data left to go before the Social Security Administration announces the COLA for 2023. The Senior Citizens League expects the SSA to announce it on October 13, 2022, after the release of the September consumer price index data.

The Social Security Administration uses average inflation in the third quarter, based on the CPI-W, to calculate the benefit adjustment for the following year. 

Medicare Part B premiums may not grow by very much next year, according to Johnson, who doesn’t expect an announcement until mid-November.

July Inflation Numbers

The gasoline index fell 7.7% in July after an 11.2% increase in June, offsetting increases in the food and shelter indexes, which resulted in the all-prices index being unchanged for the month, the BLS reported. After rising 7.5% in June, the energy index fell 4.6% in July; the gasoline and natural gas indexes declined while the electricity index rose. 

The food index increased 1.1% in July after a 1% gain the previous month, the seventh straight monthly rise of 0.9% or more. The food at home index rose 1.3% in July, with all major grocery food group indexes climbing, led by non-alcoholic beverages, the bureau reported.

The index for all items excluding food and energy rose 0.3% in July, a smaller increase than seen in April May and June, the BLS reported. Indexes for shelter, medical care, motor vehicle insurance, new cars, recreation and household furnishings and operations increased over the month, while the airfare, used vehicle, communication and apparel indexes were among those registering declines.

For the 12 months ended in July, inflation on items excluding food and energy increased 5.9%, the same increase logged for the year ending in June.

The BLS stated that over the past 12 months the energy index rose 32.9%, a smaller increase than the 41.6% rise for the year ended in June. The food index gained 10.9% over the same period, the largest increase since the period ending May 1979.

The shelter index rose 0.5% in July, slightly less than the 0.6% in June. For the last 12 months, the shelter index increased 5.7%, contributing about 40% to the overall increase in all items excluding food and energy.

By Alyssa Place, Editor Employee Benefit News

August 02, 2022

Parents are attempting to push their adult children out of the nest – but they’re not budging, and it’s coming at a cost. 

At the peak of the pandemic, 52% of young adults between 18-24 years old moved back in with their parents, according to data from the Pew Research Center. But more than two years later, 40% of parents are still hosting their adult child in their home, and in many cases, financially supporting them. 

The rising costs of rent, along with the need for financial support, are the top reasons young adults are struggling to make it on their own. Yet parental support may be threatening the financial security of older generations, especially when it comes to their nest egg for retirement. 

 “A lot of parents were in the sandwich generation, where they were taking care of older parents while also caring for their younger children,” says Delvin Joyce, a financial planner at Prudential. “Now, their parents are getting older and their health is fading, and their older kids are moving back into the house. It’s having a compounding effect on the lack of preparedness for retirement, because people are feeling pressured to reach into their retirement savings for their younger kids as they move back in.” 

A survey by Thrivent, a financial services firm, found that 35% of parents with adult children at home have compromised their retirement savings to help their children financially. Separate research from Savings.com found that 50% of parents give their adult children $1,000 a month in financial support, and 25% are willing to dip into their savings and retirement to cover the expense.  

“Because most people are not really prepared for their own retirement, having to dip into some of those limited retirement savings to support an older kid is not really something that most Americans are prepared to do,” Joyce says. “It’s just having a disastrous effect on people in their retirement readiness.” 

That miscommunication could be due in part to the stigma around discussing financial matters among family members: the Thrivent data found that 70% of parents have not discussed money management or asked their children to chip in while living at home with them. Meanwhile, though 72% of kids who moved home believe their parents can financially support them, just 21% of parents agree, Pew Research Data found.

The guilt many parents feel that their children may be struggling financially also keeps parents and children from having honest conversations around money, Joyce says. 

“In our country, we make people feel terrible if they’re not paying for their kids’ college 100%, or if they make their grown kids pay rent in their house,” he says. “A lot of people feel that they owe their children and don’t necessarily want to have to take resources away from them as they’re just getting started in life.” 

In order to preserve their own financial wellness, parents need to get vocal about their financial situation, and figure out ways to offset the cost of supporting an adult child. Joyce recommends asking adult children to chip in with things like landscaping or house cleaning if they can’t afford to make a monetary contribution to the bills. 

If a parent or child is in dire financial straits, taking out a 401(k) loan could be less damaging to a person’s savings, since they won’t be penalized or taxed like they would if they used their distributions, Joyce says. However, both parents and their children should work together to find a solution that puts both parties’ financial health at ease. 

 “As children, our parents are superheroes and so of course we overestimate how well they’ve done financially,” he says. “As parents, we don’t want to tell our kids, ‘Hey, maybe we haven’t done as well as you perceive.’ If you’re a parent who has a grown adult child moving back into the home, it’s a fantastic opportunity for you to help them clarify their own goals and objectives.”  

Joyce also recommends involving children in financial planning conversations before they head back into the home. He often advises clients to bring their children to meetings where their finances are discussed, which can help them start to understand money and build their own financial habits at a young age. 

“When I meet with clients in their 60s, the number one thing they always say is, ‘Wow, I wish I had started this process in my twenties,’” Joyce says. “Being able to set that foundation at a young age really gives them an opportunity to get a head start on their financial wellness.” 

Norwegian cheese Jarlsberg has been found to have unique properties to prevent bone thinning.

By Josephine Joly  •  Health Magazine

Updated: 04/08/2022

Eating small amounts of a particular Norwegian cheese may actually help stop bones getting weaker without boosting cholesterol, a new study has found.

Researchers from Norway have found that eating a daily portion (around 57 g) of Jarlsberg could help stave off bone thinning without boosting harmful low density cholesterol, and that the health benefits are unique to this very particular cheese.

Jarlsberg is a mild and semi-soft, nutty flavored cheese made from cow’s milk, with regular holes. The cheese originates from a town of the same name in eastern Norway.

The Norwegian team hopes that the cheese may help stop osteoporosis and even prevent diabetes, but further research is necessary.

Previous research suggested that it may help boost levels of osteocalcin – a hormone associated with strong bones and teeth – but that it was not clear if this effect is specific to Jarlsberg or any type of cheese.

Jarlsberg vs Camembert

In a bid to find out, the academics studied 66 healthy women who either ate a daily portion of Jarlsberg or 50g of Camembert cheese every day for six weeks.

Both cheese have similar fat and protein levels, but Jarlsberg is rich in vitamin K2 – also known as menaquinone – unlike Camembert.  One form of menaquinone is found in animal products such as liver, while others come from bacteria and fermented foods such as cheese.

At the end of the six-week period, the group consuming Camembert was allowed to eat on Jarlsberg for another six weeks.  All the participants were healthy women with an average age of 33 and an average weight.

Every six weeks, blood samples were taken from all the participants to check for important proteins, osteocalcin, and a peptide (PINP) which helps bones renew themselves and stay young.

The samples showed key signs of bones renewing themselves and of vitamin K2 having increased after six weeks among people who ate a serving of Jarlsberg cheese daily, whereas for those who ate Camembert, PINP levels stayed the same while other indicators of bone health fell slightly.  However, levels of both PINP and the chemical and biological indicators rose significantly after these participants switched to Jarlsberg.

Blood fats increased slightly in both groups, but cholesterol levels fell significantly in people once they made the switch from Camembert to Jarlsberg.

The amount of glucose in red blood cells fell by three per cent in people who ate Jarlsberg but rose by two per cent in people who ate Camembert. Once the Camembert group switched to Jarlsberg, the glucose levels fell again.

Calcium and magnesium levels fell in the group who ate Jarlsberg but remained unchanged in the group who ate Camembert.  After switching cheese, calcium levels dropped in this group too, possibly reflecting increased uptake of these key minerals in bone formation, according to the researchers.

The bacteria in the cheese also produces a substance called DNHA which earlier studies have suggested could reduce bone thinning and increase bone tissue formation.  This could explain the rise in osteocalcin, researchers say.

“Daily Jarlsberg cheese consumption has a positive effect on osteocalcin, other markers of bone turnover, glycated haemoglobin and lipids,” the report reads, concluding that the effects are indeed specific to this cheese.

The findings further suggest that Jarlsberg cheese might therefore help to prevent osteopenia – the stage before osteoporosis – as well as metabolic diseases, such as diabetes, although further research would be needed to confirm this.

“This study shows that while calcium and vitamin D are known to be extremely important for bone health, there are other key factors at play, such as vitamin K2, which is perhaps not as well known,” said Professor Sumantra Ray, Executive Director for the NNEdPro Global Centre for Nutrition and Health, which co-owns the BMJ Nutrition Prevention & Health journal in which the study was published.

“Different methods of preparation mean there are key differences in the nutrient composition of cheese which has often been regarded as a homogenous food item in dietary research to date. This needs to be addressed in future studies”.

“As this is a small study in young and healthy people designed to explore novel pathways linking diet and bone health, the results need to be interpreted with great caution as the study participants will not necessarily be representative of other groups. And it shouldn’t be taken as a recommendation to eat a particular type of cheese,” Ray cautioned.

Greg Says is especially pleased to know about the apparent health benefits of Jarlsberg cheese consumption as it has been Greg’s favorite cheese for years.

 By Christopher Cheney  | healthleaders |  March 28, 2022

Impact of coronavirus pandemic accelerated national health spending growth to 9.7% in 2020.

National health expenditures are expected to be influenced significantly by the coronavirus pandemic from 2021 to 2024, then typical factors that drive changes in health spending such as demographics are expected to influence spending trends from 2025 to 2030, a new analysis indicates.

The new analysis was conducted by the Centers for Medicare & Medicaid Services’ Office of the Actuary. The analysis features expected annual health expenditures and projected hospital spending growth.

The analysis includes chronological healthcare expenditure projections.

• In 2020, unprecedented financial stimulus from the federal government and insurance market upheaval drove national health expenditure growth to a nearly two-decade high of 9.7%. In 2020, the health spending share of the gross domestic product (GDP) increased 2.1 percentage points from 2019, to 19.7%.
• In 2021, national health expenditure growth is expected to decline sharply to 4.2%, largely due to reductions in federal coronavirus relief funding. The slower growth rate in healthcare spending combined with growth in GDP, which rebounded to 9.6%, is expected to result in a 0.9-percentage point drop in the healthcare spending share of GDP to 18.8%. Healthcare spending is expected to total $4.3 trillion.
• In 2022, national health expenditures are expected to increase at 4.6%, driven in part by higher healthcare prices linked to inflation in the economy. Healthcare spending is expected to total $4.5 trillion.
• National health expenditures are expected to increase 5.0% and 5.1% in 2023 and 2024, respectively. These growth rates are tied to an expectation that patient care patterns will return to pre-pandemic levels. From 2022 to 2024, healthcare spending’s share of GDP is expected to be just over 18%.
• The healthcare spending impact of the pandemic is expected to wane progressively from 2021 to 2024.
• From 2025 to 2030, traditional drivers of healthcare system trends such as economic, demographic, and health-specific factors are expected to return to prominence. During this period, healthcare spending is expected to increase at an average rate of 5.3% annually, reaching a total annual spending level of $6.8 trillion by 2030. Healthcare spending’s share of GDP is expected to be 19.6% in 2030.

The analysis also includes projections for hospital spending growth.

• In 2021, hospital spending growth is expected to decline 0.7 percentage points to 5.7%. The primary reason for this drop in spending growth is a decrease in federal coronavirus relief funding. In 2021, total hospital expenditures are expected to reach $1.3 trillion.
• In 2022, rebounding demand for care and hospital price growth linked to inflation are expected to drive hospital spending growth upward sharply to 6.9%.
• In 2023 and 2024, hospital spending growth is projected to decrease to 5.6%, with a normalization of pandemic-related effects such as utilization, federal stimulus funding, and insurance market disruptions.
• From 2025 to 2030, hospital spending growth is expected to decrease slightly to an average of 5.5% annually. Influencing factors are expected to include reduced Medicare and private health insurance spending for hospitals.

Projections Dependent on Pandemic

The projections presented in the analysis are based on the assumption that the effects of the pandemic will wane through 2024, the co-authors of the analysis wrote. “As the severity of the COVID-19 pandemic and its related health and economic impacts are projected to lessen during the next few years, it is anticipated that the health spending and enrollment trends observed in 2020 will unwind as well.”

Traditional factors are expected to influence healthcare spending trends from 2025 to 2030, but there is considerable uncertainty associated with the pandemic, the co-authors wrote.

“Economic and demographic factors are anticipated to reemerge as the most influential drivers of health-sector trends, resulting in more stable health spending trends and a slowly increasing share of the economy devoted to healthcare. However, this outlook is contingent on a virus that has evolved and surprised at every turn – and could do so again. So although a normalization of health spending and the economy underlie this projection, only time will tell how normal the next decade is,” they wrote.

Did you know you can sell all or a portion of a life insurance policy, even term insurance?

For some people, selling a life insurance policy that no longer fits their needs is a good financial option. If you choose to sell a life insurance policy, you will be selling it to a life settlement provider. These are companies that purchase life insurance policies from policyholders. Most settlement providers buy policies on behalf of their investors or other financial institutions, and some keep them as an internal investment. When deciding to sell a life insurance policy, you want to make sure you know the best company to sell your life insurance policy to.

Benefits to the Buyer

The policy owner gets a lump sum payment when they sell their policy, but what’s in it for the party who buys life insurance policies? Buying life insurance policies is considered a stable investment with predictable returns, and so is desirable for some investment portfolios. 

When an investor purchases a life insurance policy, they pay less than the death benefit, but significantly more than the policy owner would get by simply surrendering the policy to the insurance company, and the investor becomes the beneficiary. They continue to pay the policy’s premiums, and after the death of the original policy owner, that investor receives the death benefit payment. For example, if an investor purchases a $750,000 policy for $150,000, the $600,000 difference is the potential return on their investment. The negatives to them are that they will continue to make payments on the policy until the original policy owner’s death, which represents an unknown cost, and there is the possibility that the life insurance company could go bankrupt or refuse to pay for some other reason, although this is very uncommon.

Direct Buyer vs Broker

Because selling a life insurance policy is such an important and highly-regulated process, there are usually multiple people involved other than just one person selling their policy and one person buying it. An important distinction to make is between the direct buyer (maybe the life settlement provider, maybe not) and a life settlement broker. 

The life settlement broker is not the one buying the life insurance policy, but rather is representing the seller.  Because of the complex nature of life insurance beneficiary rules and other regulations, working with a broker with specialized knowledge can ensure you get fair market value for your life settlement. In cases where the life settlement provider is not the direct buyer, they represent the buyer in the same fashion. 

Do Life Insurance Companies Buy Back Policies?

Let’s look at another group that people often think about as buying life insurance policies – the life insurance company itself. There are some cases when the life insurance company that issued the policy will pay money to a policy owner in exchange for the policy.  However, it’s not exactly “buying back” and not the same process as a life settlement. Here are 2 examples of when that might happen:

Cash Surrender Value

Some insurance policies may have a cash surrender value, available if enough premiums have been paid over enough time. This will depend on the specific life insurance policy. There will be substantial fees associated with surrendering a policy, and the amount possible from a life settlement is often at least 4 times greater than a cash surrender value.

Return-of-Premium Term Policies

This specific type of policy does include your insurance company paying back the premiums you have paid. These return-of-premium term policies (or riders added to a regular term policy) are advertised as such when you originally purchase them. If you have purchased this specific kind of policy and outlive the term, the insurance company will pay back the amount you have paid them in premiums, without interest. This amount is not taxable, since it’s just returning back to you the money you have paid for the coverage which you didn’t use. 

Policy Owner’s Check List

There are many places online that have a list of companies that buy life insurance policies. But choosing a company to work with for such a complex transaction should be more than just picking one from a list. The best companies that buy life insurance policies are going to have several very important qualities that you need to be looking for. Here’s a list of such qualities to be looking for:

• Education Services – helping customers understand exactly what their options are
• Experience – having done it long enough to have developed superior competence with the process
• Reputation – testimonials from clients and word of mouth confirmation of their skill
• Efficiency – ability to move through the process efficiently for timely results
• Transparency – keeping the client informed all the way through the process
• Responsiveness – responding to questions quickly and thoroughly
• Free Consultation – they don’t get paid until the work is done

If selling a life insurance policy that you no longer need is something in which you have an interest, Greg Says can recommend:

Leo LaGrotte

Life Settlement Advisors

llagrotte@lsa-llc.com

888-849-0887