(BPT) - The homebuying process is exciting, but can also seem fraught with added costs, like a home inspection, title insurance and closing costs. And if you can’t afford a full 20 percent down payment on a conventional home loan, then you will most likely pay for private mortgage insurance (MI). Some people consider private MI yet another added cost, but it helps creditworthy middle-income homebuyers qualify for home financing sooner with a low down payment. Is it really an added cost if it saves time and money in the long run?

For most people, low down payment home loan options include conventional loans with private MI and government-backed loans like those offered by the Federal Housing Administration (FHA). While comparable, each of these options has important differences. For example, the minimum down payment for an FHA mortgage is 3.5 percent while it’s only 3 percent on a conventional, privately insured mortgage.

Another key feature of private MI is that it can be canceled when a borrower reaches 20 percent equity in his or her home. Borrowers who purchase a home with private MI can typically cancel it within 5 to 7 years, resulting in their monthly bill going down. Private MI’s cancelability makes it a more affordable option over FHA-backed mortgages, which typically require mortgage insurance premiums for the entirety of the loan term. Both are offered by most mortgage lenders, so it’s smart to ask a loan officer for both options so you can compare and do the math.

The myth that a homebuyer needs 20 percent down to obtain a mortgage is simply not true. Low down payment mortgages are widely available and used every day across the country. In 2018, the National Association of Realtors found that first-time homebuyers typically put down 7 percent, while repeat buyers put down an average of 16 percent. Many homebuyers choose a lower down payment option to preserve some savings for home improvements or save for other goals. The time it could take to save up a 20 percent down payment is significant. On average, it could take up to 20 years to save a full 20 percent, plus closing costs, for a $257,700 house — the national median sales price. With home prices on the rise, the amount of time it takes to save up could only increase. Private MI can mean the difference between getting into the home of your dreams sooner or waiting for years.

For over 60 years, more than 30 million homeowners of all backgrounds have used private MI to successfully buy their homes. In the past year alone, private MI helped more than one million borrowers nationwide purchase or refinance a mortgage. According to a study by U.S. Mortgage Insurers, 56 percent of purchase borrowers were first-time homebuyers and more than 40 percent had incomes below $75,000.

For decades, millions of homeowners and prospective homebuyers have relied on private MI to help them affordably and responsibly purchase their homes — in turn helping them build personal wealth. Today’s historically low mortgage interest rates are a good reason to buy a home now. It is estimated that in 2019, the average rate for a 30-year fixed-rate mortgage will be around 5 percent. Borrowers should take advantage of these historically low mortgage interest rates because experts forecast that primary mortgage rates are on the rise.

Getting a mortgage with private MI and keeping more of your hard-earned money in the bank can be a very smart way to invest in your future. Check out lowdownpaymentfacts.org to learn more.

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(BPT) - If you haven't made solid financial plans, now would be a good time to consider a life insurance policy to protect you and your family in your time of need - or protect your loved ones in your absence.


Given the importance of life insurance, it's surprising that 37.5 million American households lack such a policy, according to the 2016 Facts About Life study by the industry group LIMRA. That may be because many people misunderstand how such policies work and how much they cost. For example, recent Insurance Barometer studies by LIMRA and Life Happens found 63 percent of Americans cite expense as the reason they don't carry term insurance, yet 80 percent overestimate the cost - millennials by 213 percent and Gen Xers by 119 percent.


While some Americans hope to rely on other sources to protect their families, they may not realize all the benefits life insurance offers. Every family has different needs, and some life insurance products are flexible enough to offer customizable options to provide a measure of financial security to your spouse and children - the people that matter most.


Consider these other common myths about life insurance:


Myth: Life insurance is only available through financial advisors. In fact, quality policies for your entire family are often available through your employer or your spouse's employer. For example, Boston MutualLife Insurance Company offers a range of workplace solutions paid for by employers, employees or both, including permanent life, term life, critical illness, accident and disability insurance. Talk to your company's HR department about the process involved in securing comprehensive coverage for your family.


Myth: Workplace policies can't offer enough options for your needs. You'll find that well-established life insurance companies understand the market well enough to offer a range of flexible products, including policies that are payroll deductible, stable in cost regardless of your age, portable when you're changing jobs and available with add-on riders or other insurance types through the same carrier.


Myth: Young, healthy people don't need life insurance. The truth is, your health can change at any time and it's best to expect the unexpected. Uninsured people can easily leave behind personal, medical or mortgage debts and/or funeral expenses that end up burdening family members or executors when they die.


Myth: Your life insurance policy only covers you, not your family. Not true. Some products protect you, your spouse, your dependent children and even your grandchildren, often at one affordable cost. That's why marriage and becoming a parent can be excellent reasons for buying new policies.


Investing in life insurance is a crucial step to take to protect yourself and your family from unexpected losses. But it doesn't have to be confusing or complicated. Find more detailed information about life insurance options for you and your family at www.BostonMutual.com.

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(BPT) - Individuals who rushed to prepay property taxes after the passage of the Tax Cuts and Jobs Act may have saved some money in 2018 — but that’s pennies compared to the long-term tax savings taxpayers should take advantage of before the TCJA’s individual tax provisions are expected to expire in 2026, according to Robert Fishbein, vice president and corporate counsel at Prudential Financial.

Also expected to expire in 2026? According to trustees for Social Security, that’s when Medicare’s main trust fund will run out of money. With the increasing likelihood that Social Security and Medicare benefits may be reduced in the future, it’s more important than ever to use every technique available to maximize your retirement savings.

Three outside-the-box strategies could make an enormous difference in your retirement readiness. The sooner you start, the more you may save.

Fund an HSA for retirement health care

Estimates suggest even a healthy 65-year-old couple will need at least $275,000 to cover retirement health care costs. A Health Savings Account, or HSA, provides a way to save that money without paying a dime in taxes. An HSA account is available to individuals enrolled in a high deductible health insurance plan.

First, these individuals can fund their HSA through a tax-deductible contribution or pre-tax payroll deduction. Second, any interest and investment gains are tax-free. Finally, the funds can be withdrawn tax-free to pay for qualified medical expenses— a triple tax advantage over a traditional savings account.

The best part? There is no requirement to use HSA funds in the year of contribution, which means funds can grow on a tax-favored basis for future health care expense needs.

For 2018, family contribution limits are $6,900, or $7,900 if you are 55 or older, and those amounts are indexed for inflation in future years. If you start contributing the maximum even as late as age 55, and earn 3 percent per year, you could have more than $90,000 to pay for your retirement health care by age 65. If you start contributing the maximum as early as age 40, you could have saved almost $270,000. These funds will continue to grow tax-free in retirement until you need them.

If you don’t use HSA funds in full before you die, excess funds are subject to income tax, but will be otherwise available for your heirs.

Consider a Roth IRA conversion

The typical dogma says that converting an IRA or traditional 401(k) to a Roth IRA does not make sense if you expect your tax rate in retirement to be lower than at the time of conversion. However, lesser known benefits of a Roth IRA may make it worthwhile to have at least part of your retirement assets in Roth IRA form.

Start with no required minimum distributions. With a Roth you aren’t forced to draw down your funds once you attain age 70½ and can continue to benefit from the tax-free growth, thereby maximizing the after-tax funds eventually available for you or your heirs.

Another significant benefit of a Roth IRA or Roth 401(k) is tax diversification. For example, you may choose to take taxable distributions up to a certain amount and then tax-free distributions to avoid a higher income tax bracket.

If you are a high-income taxpayer, Roth IRA distributions are not considered income when determining thresholds for increased Medicare premium charges or the 3.8 percent income tax surcharge on investment gain. If your income is more modest, Roth IRA distributions are not considered income when determining whether you are subject to income tax on Social Security benefits.

If anything, a conversion is more attractive now since you have an opportunity to convert and pay income tax with marginal rates that are generally lower than under prior law. Since individual tax law changes are temporary and tax rates will revert to the former higher amounts starting in 2026, you have an eight-year window to benefit from lower rates.

Make “backdoor” Roth IRA contributions

The tax law prescribes income limits so high-income individuals may not make a direct contribution to a Roth IRA. However, there are no income limits on converting traditional IRA funds to a Roth IRA.
Any person under age 70.5 who has earned income by year-end can make an IRA contribution. While income limits may prevent you from making a pre-tax contribution, you can make this contribution even if you have fully funded a 401(k) or another employer plan.

Once you have made your contribution to a traditional IRA, simply convert that amount to your Roth IRA. As long as this is your only traditional IRA and you have made an after-tax contribution, then an immediate conversion will have converted a tax-deferred asset into a potentially tax-free asset. If you have multiple IRAs, the IRAs are aggregated to determine how much is taxable upon conversion.

While we spend much time on our investment strategies to help gain an extra percentage or two of investment yield, these tax planning strategies can be a more reliable way of maximizing your after-tax retirement income and wealth for your family — no matter how Social Security and Medicare turn out.

Prudential Financial, its affiliates, and their financial professionals do not render tax or legal advice. Please consult with your tax and legal advisors regarding your personal circumstances.

(BPT) - Are you feeling good about your finances? Or do phrases like “account balance,” “credit score” and “retirement savings” give you a twinge of anxiety?

Don’t worry, you’re in good company. Only 24 percent of millennials have basic financial literacy, according to the National Endowment for Financial Education. When it comes to getting their financial house in order, most millennials would prefer not to set foot in that proverbial house in the first place. Getting yourself out of debt and building enough savings to cover your expenses in an emergency is a marathon, not a sprint. Small, incremental changes in your financial habits today can make a big difference in your financial health months or even years from now.

Take these steps today to spruce up your money management process and get yourself on the path to financial health.

* Check your credit score. Before you start the work of realigning your finances, you should check your credit score and review your credit report. It helps to know where you stand financially, and the good news is, even if your credit score is not as high as you’d like it to be, you can take steps to improve it. Establishing a history of on-time payments and maintaining a healthy credit utilization ratio are two things that could improve your credit score quickly. One way to access your credit score without any cost is to find out if your bank or lender offers your VantageScore through their website.

* Knock down your debt. Track down all your accounts — checking, savings, investment, credit cards and other loans — and do the math to find out your net worth. That’s your benchmark to help you track your progress. In the beginning, the truth can hurt, however, knowing how much you have in savings and knowing how much you owe gives you a valuable blueprint for where you need to direct your energy. From there, put together a household budget, and figure out where you can trim expenses, so you can pay ahead on your debts, one account at a time.

* Automate your savings. You’re much more likely to accumulate savings when you make the decision once and let the rest happen automatically. Log onto your bank account and set up an automatic transfer from checking to savings, starting with a small amount, preferably timed with your regular pay day. If you can manage to set aside $85 a month, in a year’s time, you’ll have set aside a full $1,000. That’s a decent emergency fund for things like car repairs and doctor bills.

* Open a retirement account. Here’s another way to automate savings. If you haven’t done so already, start contributing to a retirement plan. Even better, if your employer makes a plan and a match available to employees, sign up as soon as you can. If you can’t afford to contribute the full amount to get the full match, start with a small percentage, and slowly add on.

Taking the first steps to gain control of your finances isn’t easy. Setting up good financial habits today can leave you in a better place tomorrow. Test your credit score knowledge at CreditScoreQuiz.org, and be sure to visit VantageScore Solutions to learn what things influence your score, and what you can do to improve it.

(BPT) - You're 10 years or less away from retirement. You can clearly see the next phase of your life down the road and it's coming up fast. Are you ready for it? Do you have a comprehensive plan in place so you don't outlive your savings?

If you're not as prepared for retirement as you should be, you're not alone. The Federal Reserve did a study and found that one-fourth of Americans have no retirement savings or pension. And a Money article reports 56 percent of Americans have less than $10,000 saved.

Why aren't more people prepared? There are myriad reasons. Some people are stretched thin. Credit card debt, student loans, rising mortgage and interest rates all conspire to make it difficult for them to save. Others may lack information on the importance of retirement savings, or lack the financial savvy to be comfortable managing their own investments. And then there's the gap between men and women. The Federal Reserve’s study found that among women with any level of education, investment comfort is lower than among similarly educated men.

Yet, retirement is waiting just around the corner. People need good advice to help them build their nest eggs before "someday" becomes "now."

That's why the National Association of Personal Financial Advisors (NAPFA), a national organization representing Fee-Only financial advisors, conducted a poll of its members to get their top tips and advice for people who are nearing retirement. They want to raise consumer awareness about the urgency of preparing for retirement and the importance of having a comprehensive plan in place.

Here are the best tips, advice and tactics for retirement planning from the top financial advisors in the business.

1. Make a list of retirement “needs” and “wants.” If you do not have enough savings for all of your “needs,” make a ten-year plan to increase your funds.

2. Take a hard look at any major debts you have and develop a plan to eliminate them.

3. Brainstorm any “big ticket” financial commitments (caretaking for a family member, etc.) for the next 10 years and consider how these items might affect your ability to save for retirement.

4. Continually monitor and analyze your asset allocation to make sure it is the right one for you. Understand whether you should move to a more conservative asset allocation or continue investing for growth.

5. Be tax efficient with your investments. For example, you should defer as much of your salary as you can to your defined contribution plans.

6. Save to an emergency fund and stay aware of your company’s financial situation. Companies are prone to reorganizations and layoffs, and older workers can be vulnerable.

7. Ask your HR department about the relationship between your current health insurance and Medicare, as well as what your options are when you reach age 65. Get information about any pension or defined contribution options and any other retiree benefits.

8. Research when stock-based compensation might expire and what stock awards you can retain after retirement.

9. Double check your reported Social Security earnings and resolve any discrepancies now. Explore your Social Security claiming options and make sure you understand the timing of applying for benefits.

10. Make sure that all of your estate documents are up-to-date. Verify that your named executors and proxies know your wishes and are willing to act on them if needed.
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If you think you’ll need help creating and sticking to a financial plan, NAPFA recommends working with a Fee-Only financial advisor who adheres to a strict fiduciary standard. These advisors are required to put your best interest first and don’t accept commissions on the products they recommend, which reduces potential conflicts of interest. For more information and resources on retirement planning, check out NAPFA’s infographic about the poll. To find a Fee-Only financial advisor in your area, visit the NAPFA website at www.napfa.org and NAPFA’s “Find an Advisor” search engine.

(BPT) - As Americans work hard to meet all the obligations that come with work, family and everyday life, many are challenged to find time to manage all the financial elements affecting their health care.

The details associated with health care insurance can be confusing. At the same time, you want to make smart decisions about the quality health care you and your family need.

Out-of-pocket health care spending rose by more than 50 percent between 2010 and 2017, The Atlantic recently reported, partly because half of all health insurance policyholders in the U.S. are dealing with annual deductibles of at least $1,000.

Whether you're uninsured or simply facing a high insurance deductible, you can take several steps to better manage your health care budget. Consider how the following money-saving tips can help control the rising costs of health care.
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* Read bills with a critical eye. Any bill can include administrative errors, and some estimates have indicated errors on as many as 80 percent of medical invoices issued, reports the Medical Billing Advocates of America. That statistic makes it well worth your while to examine and question your expenses before you pay.

* Lower the cost of your meds. The free Inside Rx prescription savings card provides discounts on prescription medications for eligible patients. According to the data, eligible patients have saved an average of 40 percent on the more than 100 featured brand medications included in the program, and even more on generic medications. Inside Rx is an option to help the uninsured, those facing high deductibles or anyone trying to save money on their meds. Inside Rx even offers prescription savings for pets for qualifying medications. The card is free and easy to download, with no registration process.
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* Compare costs whenever possible. Some medical services can be difficult to compare on an apples-to-apples basis, but it’s worth doing your homework before making appointments for more standard services such as annual check-ups, lab work and testing, dental care or dermatology services. Check vendor websites, make phone calls and conduct web searches to find online databases, such as HealthcareBluebook.com, that suggest fair prices for services. If you're insured, your insurance provider can clarify what portion of the bill will be covered.

* Be bold about negotiations. It's OK to speak up. You have nothing to lose by politely asking your health care provider to work with you on the price of an upcoming service, especially when dealing with a private practice. Start the conversation by aiming for the Medicare rate or an amount close to that paid by commercial insurers. As an alternative, ask the office administrator to set up a manageable payment plan.

* Consider paying cash up front. Some vendors offer discounts for simply paying cash for your services without funneling everything through insurance. Even if you're insured, you can still evaluate whether immediate cash payments would be lower than your post-insurance costs.

Keeping a close eye on where you might be wasting money on health care can pay off in a big way — and the remedies don’t have to be complicated. Conduct your due diligence on such costs to protect your financial health as vigorously as your physical health.
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