Financial Planning & Retirement

Don’t Just Think About Retirement – Plan For It Working After Retirement Meet Your Financial Team How your Credit Score Drives your Auto Insurance Rates

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SUNDAY, JUNE 19, 2011

Don’t Just Think About Retirement —

Retirement is supposed to be your golden years.

PLAN FOR IT

Don’t Just Think About Retirement – Plan For It ......................2 Financial Literacy Lessons: A Family Affair .....................................6 How to avoid common Investment Traps .................................7 Working After Retirement....................8 Credit Care Game Plan Offers Route to better Finances for Gen Y..................10 Interesting Financial Facts & Figures ....11 Meet Your Financial Team .................12 Questions to Ask a Financial Planner ....14 How your Credit Score Drives your Auto Insurance Rates................16 Savings Bonds are a Safe Investment Choice.............................18 Life Insurance: Possibilities in A New Complex World .......................19 Baby Boomers Should Plan Ahead........21 Investment and Retirment Glossary ........22 This themed section of The Pilot is printed annually.

For advertising rates, call Perry Loflin (910) 693-2514 or e-mail: perry@thepilot.com

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by Metro Services, ARA Content, NewsUSA, ineedagreatstory.com Bill Eastman - Stifel, Nicolaus & Company, Inc.

The Pilot

P.O. Box 58, 145 W. Pennsylvania Avenue Southern Pines, NC 28388 Copyright 2011

Just a generation ago, planning for retirement was simple. By adding together company pensions and Social Security benefits, most employees could figure out how and when they could retire comfortably.

Today, retirement planning is more complex. It’s also more challenging.

For example, we are all keenly aware of the well-documented shortfalls in Social Security and the disappearance of company pensions. As we look forward to retirement, we must also consider longer life expectancies and a rising cost of living.

For these and other reasons, many of us are compelled to assume more and more responsibility when it comes to ensuring our own retirement goals. For many of us, retirement stands as one of our most important financial objectives.

So whether you’re nearing retirement or simply planning ahead, you’ve probably asked yourself the same question that so many other individuals have asked themselves: “Am I saving enough to enjoy my retirement years?”

By planning now and planning wisely, you can take the steps necessary to finance your retirement. The following six-step process can help you plan for a secure, comfortable retirement.

1. Determine Your Retirement Needs and Goals.

Whether it’s financial security or realizing lifelong dreams, attaining your retirement objectives requires a bit of foresight. Perhaps you hope to travel.

On the other hand, perhaps you’re happy to stay at home, spending time with family and friends. Depending on your plans, your financial needs could range from 70 to 100 percent of your current income to support your lifestyle.

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A time to relax and do all the things you’d like to do. The last thing you want to do is worry about how to afford the lifestyle you’re ready to live.

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THE PILOT — SOUTHERN PINES, N.C.

CONTINUED FROM PAGE 2

ings, you should review your other financial needs for the future.

5. Develop Your Retirement Savings Plan.

To develop a plan, start by estimating how much the retirement lifestyle you envision would cost today. Now, adjust these amounts for inflation. This should give you an idea of your total capital needs at retirement. Next, determine how much you need to save on a monthly, quarterly, or annual basis.

2. Choose the Right Time to Retire.

While most of us hope to retire early, many of us set unrealistic goals. To adequately finance your retirement, you may need to work longer than you would like. Your needs and goals will determine how long you must work to finance your retirement. If you hope to retire at age 50, for example, you might forgo the purchase of a second home. If you retire at 60, that second home might be included in your retirement goals.

3. Estimate Your Current Retirement Benefits.

By analyzing your current retirement benefits, you can estimate how much income you will receive from Social Security and company pension plans.

Such income will help offset the amount of money you need to save for retirement. Of course, you should make sure your estimates are reasonable and

SUNDAY, JUNE 19, 2011

not based simply on current benefit levels.

4. Review Your Current Retirement Savings.

Preparing a net worth statement can help you adequately assess how much you’ve already saved for retirement.

Such a statement is simply a listing of what you own (assets) and what you owe (liabilities), with the difference representing your net worth. Preparing such statements on an annual basis will help you evaluate the progress you’re making toward long-term goals. Also, when reviewing your retirement sav-

6. Review Your Retirement Plan.

By reviewing your retirement plan annually, you can evaluate your progress.

This process also will allow you to make any needed changes to your plan.

Submitted by Bill Eastman, CFP©, Senior Vice President/Investments and Co-Branch Manager at Stifel, Nicolaus & Company, Incorporated, a member of the Securities Investor Protection Corporation (SIPC) and the New York Stock Exchange, Inc. He can be reached by calling (910) 246-5352, or via e-mail at bill.eastman@stifel.com.

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THE PILOT — SOUTHERN PINES, N.C.

SUNDAY, JUNE 19, 2011

FINANCIAL LITERACY LESSONS: A Family Affair

Studies have shown that parents have the greatest influence on their children’s financial habits, and now, more than ever, mothers and fathers are taking the primary role in educating kids about healthy money management.

“Most financial experts agree there is a need for financial discussions among families to avoid or soften potential future economic upheavals,” says Suzanne Poole, executive vice president, retail sales strategy, TD Bank. “According to a recent financial literacy poll by TD Bank, only 50 percent of families report having weekly conversations with their children, even though there are easy ways to incorporate tips about money in everyday conversation.”

TD Bank surveyed 1,637 consumers within the Northeast as well

as in Florida and Washington, D.C. With a little more than half of families having weekly conversations with their children about money matters, it’s important to keep it simple, be honest, and make it fun. Now, let the lessons begin:

Be Open: According to the survey, a majority of parents agree that honesty is the best policy when talking to children about household finances. Perhaps as a result of the recent economic struggles, the sur-

vey found that 55 percent of families say they are talking with their children more often about money.

Set Savings Goals: TD Bank’s survey showed that teaching children to save with a piggy bank is one of the most popular money-related activities. That being said, only one in three parents reports setting a savings goal. If your child is saving, help them set goals and define the steps needed to reach them.

Establish a Family Budget: Despite the evidence that better budgeting can lead to saving, the survey shows that 47 percent of families are still not following or creating a monthly budget.

Financial websites, such as Mint.com, offer free programs and budget templates to develop a financially fit family budget.

Enroll in Financial Literacy Programs: Financial literacy can be a daunting task for parents, but there are educational tools and programs that can help with this process. For example, TD Bank offers an interactive financial literacy program for grades K-12 called “WOW!Zone.” It is available online for free at www.tdbank.com/wowzone and offers advice and resources for parents to teach children and teens about money, savings and banking.

How to avoid common I N V E S T M E N T T R A P S

SUNDAY, JUNE 19, 2011

When it comes to investing, many people approach their initial foray with a degree of trepidation. Much of that is due to the nature of investing, which involves a leap of faith even for the most conservative investments.

The economic downturn that began near the end of the first decade of the 21st century has only added to the fears associated with investing. While investing is a risk, it’s also a necessary step for men and women hoping to secure their financial futures. Whether an investment portfolio consists of just a 401(k) or an IRA, men and women who hope to retire need to find a way to balance their fear of investing with their desire to retire comfortably.

Many of those fears can be countered by watching out for some of these common investment traps. * Environmental investments. The “go green” movement has opened the door for scores of investment traps

THE PILOT — SOUTHERN PINES, N.C.

that prey on an investor’s desire to invest in ways that will improve their bottom line and the environment at the same time. Such traps are especially prevalent in the aftermath of environmental disasters like oil spills. Investors should be wary of e-mail or telemarketing campaigns that promise investors they have the products needed to fix disasters, whether it’s an oil spill or a hurricane. Whenever investing in green technologies, investors should do extensive research before agreeing to invest. * “Hot tips.” Nearly every investor has been offered a “hot tip” at one point or another. Novice and even vet-

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eran investors should be especially wary of such tips, which are often unfounded and could cost investors substantial amounts of money in the long run.

* Special deals. Some private deals are legitimate, though investors, particularly beginners, must be especially wary of “special” investment deals that often prey on unsuspecting investors. Typically framed as a chance to get in on the ground floor and invest in a business that’s trying to raise capital, these “special” deals are often fraudulent and investors could lose a lot of money.

PAGE 7

* Beware of online sales pitches.

Social media has made it easier than ever before for con artists to victimize unsuspecting investors. This investment trap often boasts high-yield returns and might even suggest these returns are tax-free. Any investment that guarantees either of these things is too good to be true, and beginning investors should avoid them.

* Gold scams. Though some investors embraced gold as an investment opportunity during the economic downturn, beginners should be wary of investment pitches that offer to buy gold for investors and then sell it once the value of gold has risen. The North American Securities Administrators Association warns that in many of these instances the gold does not exist.

Investors who want to invest in gold should instead consider a gold fund.

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THE PILOT — SOUTHERN PINES, N.C.

SUNDAY, JUNE 19, 2011

Working After Retirement

There’s no longer a magic number for retirement. Some people find that they want to work past the traditional retirement age, while others discover they need to. In addition, some retirees discover that they actually liked working and want to return to work rather than settle into retirement.

Sixty-five is no longer the required age to stop working. In fact, many people are foregoing retirement and staying with the workforce. Why? No single reason applies to everyone, but finances often come into play.

Thanks to a troubled economy that has carried over into the workplace,

pensions and severance packages are no longer the norm for retiring workers. When faced with the prospect of reduced funds and dwindling Social Security benefits, many choose to simply keep on working. Furthermore, individuals who retire before 65 are often faced with finding their own health insurance plans because Medicare doesn’t start until age 65.

Even still, high prescription costs for chronic conditions can exceed the allowance of Medicare. Employee insurance plans tend to have better options, and that often factors into an employee’s retirement decision.

There are many people who continue working because they actually enjoy it, and not because of some financial necessity.

Working tends to keep the mind

sharp and helps seniors feel like contributing members of society. According to a study conducted by the

WHAT ARE YOUR GOALS AND DREAMS?

CONTINUED ON PAGE 9

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American Psychiatric Association, retirees who continued to work in a bridge job (meaning part time or temporary employment) experienced fewer major diseases and fewer functional limitations than those who fully retired. Researchers considered only physician-diagnosed health problems, such as high blood pressure, diabetes, cancer, lung disease, heart disease, stroke and psychiatric problems.

Those thinking of remaining in the work force can check with employers to see if retirement is mandatory or voluntary. Seniors re-entering the workforce may want to brush up on some skills and reconnect with former employers or colleagues to make the transition easier. Here are some other strategies to consider.

Refurbish your resume.

Focus on what things you can do rather than what you did in the past.

You may be up against younger appli-

PAGE 9

Retire Here, Live Here, Relax Here

cants and will have to make a case for your hire.

Be flexible.

You may need health benefits more so than a high salary. You can work with an employer to develop a compensation package that is mutually beneficial.

Develop computer skills.

Today’s work environment relies heavily on computer skills. It is unwise for you to think you’ll get by on experience alone. Obtain a rudimentary education in computer usage and common office programs, which can set you apart from other older applicants.

Know there’s nothing to prove.

Retirees have the benefit of taking their time and finding the right fit in a post-retirement job. Unless money is an issue, shop around until you find the job that appeals to you, even if it’s part-time or for a lower salary.

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Prudential Gouger O’Neal & Saunders knows that decisions involving selling your home are difficult. And, if you haven’t been in the real estate market in the last ten years, the many changes which have occurred, especially those affecting the way you plan for your future property sale, may be perplexing. Our Seminar “Selling Your Home in a Tough Market” will help you assess your home by understanding the factors affecting its value. We look forward to seeing you at our seminar…and, along with your coffee, you’ll get a lot of “food for thought!”

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SUNDAY, JUNE 19, 2011

CREDIT CARE GAME PLAN Offers Route to Better Finances for Gen Y

America’s Gen Y – 87 million people age 18 to 34 – are stressed out over finances, according to Western Union Payments MoneyMindset Index survey. The survey reports that half of Gen Y respondents feel increased stress about financial obligations; 40 percent say their financial situation

has worsened in the last six months.

However, the survey, conducted quarterly by Javelin Strategy & Research, also has good news.

“In spite of the difficult economy, Gen Y is engaging in smart financial behavior to help build their better future,” says David Shapiro, senior vice president, Western Union. “This survey shows Gen Y using tools such as online banking and online bill pay to manage their budget and credit standing.” Here are some tips to get you started:

Credit and Debt Game Plan:

1. Establish the Base. Open a bank account, and start saving and paying down debt: online banking, online bill payment, automatic deduction and mobile banking are helpful tools.

2. Establish a Budget. Check out on-

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line budget management tools to get your budget started. Also check the applications available for smart phones.

3. Establish Credit. Approximately 30 percent of your credit score is based on bill payment history. Look into

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scheduling automatic payments through your banks or biller.

4. Establish Credit – Part II. Even if it’s just one bill payment, establish credit in your name.

5. Check Your Credit Scores. Know how to obtain your credit scores and read them. Forty percent of Gen Y-ers have not seen their credit scores in the past year, and 44 percent have never seen them. Check sources such as annualcreditreport.com and myfico.com for how-to’s.

6. Set up an Emergency Fund. Set up an automatic rainy-day savings plan now.

7. Work It Both Ways. Understand there are two paths to financial success. Make more money and save it. Or spend less money and save it. Or do both.

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THE PILOT — SOUTHERN PINES, N.C.

PAGE 11

I nt e re s t i n g FINANCIAL FACTS & FIGURES

The general public often gets conflicting information about the state of the economy. Some news reports say that people are doing well, while others say the collective public is barely scraping by. Though it might seem impossible to get a straight answer on the economy, there are certain trends that may be indicative of how the country is faring in these trying times. The following are some financial statistics that may reveal how healthy or unhealthy the economy is. * Six in 10 homeowners wish they understood the terms and details of their

mortgage better. (Freddie Mac/Roper poll of 2,031 U.S. homeowners, conducted 2005.)

* 43 percent of American households spend more than they earn each year. (Homeownership Preservation Foundation data of 60,000 homeowners.)

cluding IRAs. Most cannot support daily living for three months with these assets. (Asena Caner and Edward N. Wolff, “Asset Poverty in the United States: Its Persistence in an Expansionary Economy,� Levy Economics Institute of Bard College, 2004.)

* More than 6 in 10 homeowners delinquent in their mortgage payments are not aware of services that mortgage lenders can offer to individuals having trouble with their mortgage. (Freddie Mac/Roper poll of 2,031 U.S. homeowners, conducted 2005.)

* 52 percent of employees live paycheck to paycheck. (MetLife Study of Employee Benefit Trends: Findings from the 2003 National Survey of Employers and Employees, November 2003.)

* 46 percent of American households have less than $5,000 in liquid assets, in-

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THE PILOT — SOUTHERN PINES, N.C.

TEAM

By Taniesha Robinson - CTW Features

Personal finance can be a source of stress, which is why a lot of folks like to rely on a professional when it comes to crunching numbers.

Whether the goal is to dig out of debt or to get ahead on retirement savings – and stay there – turn to someone trained and qualified to offer professional guidance in matters of saving, investing and planning to get on the road to financial balance.

Read on to learn more about the pros to recruit for a top-notch

personal finance team.

FINANCIAL PLANNER/ADVISER Financial planners help clients invest and increase capital at an acceptable level of risk. “I look at my role as being the quarterback of the financial team, bringing all the other financially related people who a client interacts with together,” says Paul Winter, president of Five Seasons Financial Planning in Salt Lake City.

CONTINUED ON PAGE 13

SUNDAY, JUNE 19, 2011

SUNDAY, JUNE 19, 2011 CONTINUED FROM PAGE 12

To do this, planners attempt to obtain a comprehensive look at clients’ entire financial situation – bank

accounts, brokerage accounts, retirement accounts and other investments.

Winter refers to himself as “a conduit of information” and formulates plans for his clients based on the information he collects regarding the client’s assets and goals. Interview a few planners before committing to one, and be sure to find out if the planner’s services are commission-based or fee-based.

STOCK BROKER A broker isn’t just the person that carries out desired investment transactions. According to the Financial Industry Regulatory Authority, a broker’s role is legally defined as a person or company that buys and sells stocks, bonds, mutual funds and other securities on behalf of customers and/or for its own account. Brokerage firms fall into two categories: discount and fullservice. Transaction services from discount brokers are usually cheaper but come with little advice. For investment counsel, investors can employ a fullservice broker. To learn more about how to find a qualified broker go to www.finra.org and click on “Investors.”

Use the FINRA BrokerCheck tool to track down background information on brokers.

INSURANCE AGENT Licensed insurance agents are essentially salespeople who provide clients with life, health or property insurance policies. FINRA outlines two categories for agents: an independent insurance agent who may represent multiple companies to find the best coverage for an individual client; and a “captive” agent who only recommends policies from one company. Agents are licensed by the state. Find financial and disciplinary information on insurance companies nationwide on the National Association of Insurance

PAGE 13

Commissioners website, www.naic.org.

CERTIFIED PUBLIC ACCOUNTANT Those who are self-employed or simply have complex tax situations should consider employing the expertise of a CPA. CPAs undergo rigorous certification and licensing procedures in most states. As a result, they can handle the nuances of self-employment and can also provide some financial planning advice. Their services can be expensive.

A cheaper option may be an enrolled agent, says Lauren Lyons Cole, financial planner in residence at LearnVest.com, a personal finance website.Estate LawyerShockingly, simply signing away worldly possessions on a cocktail napkin doesn’t pass muster for a will. That’s where a lawyer schooled in estate planning comes in.

This specialized attorney will draft proper wills, living wills and trusts, which dictate how property and assets will be distributed upon death or in the event one becomes incapacitated. The more complex familial circumstances are – multiple marriages or children, for example – the more critical it is to have plans in place.Personal BankerThe friendly faces at the bank are not just there to transact deposits and withdrawals all day. Personal bankers can review accounts to determine eligibility for a higher-yielding account and if there are new credit or debit cards available that offer better rates or rewards. They will also field questions regarding mortgages or car loans and can put individuals in touch with the appropriate loan officer.At-Work Human Resources ProfessionalLyons Cole says that HR managers are some of the most underutilized financial resources. They know the details about the company’s insurance policies and 401(k) or other retirement programs sponsored by the company.”That’s really their job, to provide for their employee in many financial spheres so employees can go to work, be productive and not have to worry about benefits,” Winter says.

For a list of questions to ask your financial advisor see page 14.

PAGE 14

SUNDAY, JUNE 19, 2011

Questions to Ask a Financial Planner

There始s no substitute for a face-to-face chat to decide if a professional financial planner is right for you.

Among the questions you should ask:

What is your area of expertise?

What is your educational background?

What financial planning credentials have you earned?

What further education in financial planning do you plan to pursue?

Are you a member of any professional financial planning association?

How long have you been offering financial planning services?

Will you provide references?

Have you ever been cited by a professional or regulatory governing body for disciplinary reasons?

In the last year, how many clients have stopped using your services? Why?

Do you do the work or will I be turned over to another employee in your firm?

How are fees calculated?

What is your approach to saving and investing?

Will you provide an individualized financial plan? Can I look at a recent example of a plan prepared for someone in similar financial circumstances?

What kinds of communications can I expect from you on an ongoing basis (account statements, newsletters, etc.)?

How often will you review my portfolio?

How are you compensated for the services you provide?

On average, how much can I expect to pay for your service? What do I receive in return for that fee?

What, if anything, do you expect of me during our relationship?

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theodore.2.hicks@ampf.com clay.s.johnson@ampf.com ameripriseadvisors.com/theodore.2.hicks

Ameriprise Financial welcomes clients of diverse religions and cultural backgrounds and provides investment advisory services without any regard to any religious affiliations.

Brokerage, investment and financial advisory services are made available through Ameriprise Financial Services, Inc. Member FINRA and SIPC. Some products and services may not be available in all jurisdictions or to all clients. Ameriprise Financial cannot guarantee future financial results. Š 2011 Ameriprise Financial, Inc. All rights reserved.

PAGE 16

THE PILOT — SOUTHERN PINES, N.C.

How your credit score drives your auto insurance rates

You know that where you live, what you drive and how you drive can affect how much you pay for auto insurance. But did you know that your credit score can also influence how much your insurance company charges you for coverage?

Most vehicle insurers now use your credit score as one of many factors when determining your level of risk, and how much to charge you for insurance. Generally, the higher your credit score the more likely you are to be eligible for an insurer’s best rates.

CONTINUED ON PAGE 17

SUNDAY, JUNE 19, 2011

BENEFITS BALANCE HAS ITS MANAGE YOUR INVESTMENT

RISKS THROUGH DIVERSIFICATION

When the market fluctuates, a diversified* portfolio may help smooth out the effects that can impact differing investment classes. By developing customized solutions that address your needs and concerns, we can help balance the risks of investing through asset allocation. Please call us today for a no-obligation consultation.

* Diversification does not ensure a profit or protect against loss

SUNDAY, JUNE 19, 2011

If your credit score is low, you could get auto insurance quotes that are thousands of dollars higher than those given to consumers with high credit scores.

THE PILOT — SOUTHERN PINES, N.C. CONTINUED FROM PAGE 16

If your credit score is low, you could get auto insurance quotes that are thousands of dollars higher than those given to consumers with high credit scores.

While some consumer advocacy groups object to the practice, insurance companies say research supports the use of credit scores as a predictor of potential risk. The practice is rooted in the idea that people who manage personal finances responsibly are more likely to be responsible in other areas as well - including behind the wheel.

If you plan to buy a car, apply for new insurance or just want to lower your auto insurance rate, here are some things you should know about vehicle insurance and credit scores:

* Most vehicle insurance companies do consider your credit score when determining your auto insurance quote. Don’t forget, however, that your credit score is just one factor; your driving record, the type of vehicle you drive, where you live, how many miles you drive each year, your gender and age, even your education level are all other factors that insurance companies consider. * A vehicle insurer looks at your credit score differently than the way a potential lender might. For example, an insurer is likely going to be more interested in how reliably you pay your bills than in how many different types of credit are on your credit report. Insurance companies try to use your financial reliability and sensibility, as reflected in your credit score, to

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PAGE 17

predict how reliable and sensible you’re likely to be as a driver and vehicle owner.

* Your credit score is a fluid number that changes. Whenever a change occurs in your credit report, your score can change - going up or down, depending upon the change and its impact on your finances. If your score has improved significantly since the last time you applied for auto insurance, it may be worth it to see if your improved score will qualify you for a better rate. The Motley Fool website recommends you check your credit score to see how it might be affecting your auto insurance rates.

* Checking your credit score is fast and easy, thanks to online resources like Freecreditscore.com. The website allows you to access a credit score when you enroll in credit monitoring membership. While this score is not the specific scoring model an auto insurer may look at when reviewing your policy application, it can help educate you about your credit standing. By monitoring your credit you’ll be able to see how changes in your credit report can affect your score, and you’ll receive credit score alerts whenever your score changes.

One of the main complaints consumer groups have made about the practice of using credit scores to set auto rates is that credit reports may contain errors. By monitoring your report regularly, you can help ensure it remains error-free and that your insurance company is looking at the most accurate possible snapshot of your credit history.

PAGE 18

THE PILOT — SOUTHERN PINES, N.C.

SUNDAY, JUNE 19, 2011

Safe Investment Choice SAVINGS BONDS ARE A

Savings bonds are a government-issued means of saving and investing that are generally secure and offer a decent rate of return. Depending on the bond purchased, maturity rate of the bond and the interest earned can vary.

Series EE and I bonds for individuals are the ones most commonly offered in the U.S. Series I bonds are also known as inflation-linked and are issued by the U.S. Treasury. Ibonds’ interest rates are protected against inflation because their interest rate adjusts with the rate of inflation. Series I bonds can be purchased in increments of $25.

Series EE bonds are purchased at half of face value if paper certificates are bought, meaning a $100 bond is purchased for $50. Electronic Series EE bonds are bought at face value. There is a maximum purchase of $5,000 for these bonds per social security number. Series EE bonds purchased after May 1, 2005 earn a fixed rate of return.

Earlier EEbonds are based on 5-year Treasury security yields and earn a variable market-based rate of return. It can take up to 20 years for Series EE to mature. The maturity is based on the issue date.

Bonds are considered very safe investments because they are backed by the government. They offer very little risk and are an ideal way for the conservative investor to earn some return on his or her investment. Bonds offer a small interest rate, which investors often accept in return for the security of the investment.

To purchase a bond, an individual can either go to a financial institution like a bank or purchase them online electronically through the U.S. Treasury (www.TreasuryDirect.gov). They can be redeemed in the same fashion. Individuals who redeem bonds earlier than maturity may have to pay an interest penalty.

There are many other bond series and specially issued bonds that can no longer be purchased but may be in one’s possession. They can be cashed in or potentially turned into a more recent series of savings bond.

Savings bonds can be good gifts for young children. They serve as a stable form of savings, and upon maturity – and the child’s maturity – they can be cashed in to pay for schooling, a car or other items a young adult would desire.

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THE PILOT — SOUTHERN PINES, N.C.

Life Insurance: Possibilities in A New and Complex World

According to a recent study published by the Life Insurance and Market Research Association, last year only 44 percent of U.S. households had individual life insurance, and 30 percent of U.S. households had no coverage at all.

These statistics come at a time when using life insurance for both its protection benefit and as a way to build cash has never made more sense. Once pillars of financial stability, home equity, defined benefit plans, 401(k) matches and social security are now under threat. Under these circumstances, funding a college education, launching a new business or meeting an unexpected health emergency are daunting and cannot easily be resolved with many of yesterday’s financial solutions.

A permanent life insurance policy that is reviewed and updated on a regular basis protects more than just assets. It brings stability and can help

you take advantage of so many of life’s possibilities.

If you are thinking about buying life insurance or increasing the amount of coverage you already have, here are some common misperceptions you should know: Life insurance is a death benefit only.

In addition to a death benefit, permanent life insurance offers cash value accumulation. This money can be used to cover all kinds of life expenses for you and your family, or, small business.

Buying term insurance with a minimum amount of death benefit and putting the rest of your money in other investments is the way to go. While death protection is important, permanent life insurance offers that protection and cash accumulation, thereby meeting your needs as they evolve throughout your lifetime.

Life insurance matters only when

you have children. Life insurance can fulfill many different needs aside from protecting children. For instance, you can access the cash value of a permanent policy to help grow a business or fund a favorite philanthropy.

Life insurance is a monthly bill.

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Premium payments on a permanent life insurance policy are an investment in your future. A permanent policy is like paying yourself, as the policy accumulates cash value over time that can be used when and however needed.

At Wells Fargo Advisors, we’re committed to doing what’s right for our clients.

the T o s a y w e ’ r e c o m m i t t e d t o p u t t i n g cInc., l i e nclients t s ’ i nrated t e r e sWells t s f i Fargo r s t i sAdvisors e a s y . T(formerly o h a v eWachovia y o u r c l iSecurities) ents # 1 U.S. investment firm for doing what’s best for them.

So when we say we put s a y it on y ou r be h a l f is me a ning fu l. And t h e y h a ve . A cc or di ng t o a r e ce nt na t io na l , you first, we mean it. With nearly 16,000 Financial Advisors and offices nearby i nde p e nde nt r ep o r t , W e ll s F a rg o Ad vi so r s is a l e a de r a mo ng U . S. inv e st m en t f ir ms and nationwide, we’re with you when you need someone who has the expertise w h e n i t c o m e s t o d o i n g w h a t ’ s b e s t to f oaddress r c l i e ntoday’s t s . unique challenges.

In fact, according to an independent May 2009 report by Forrester Research,

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Wachovia Securities is now Wells Fargo Advisors.

Wells Fargo Advisors - Pinehurst Branch Financial Advisors 110 Turnberry Way Pinehurst, NC 28374 910-692-3000 • 800-955-2528 www.home.wellsfargoadvisors.com/001_so * WO UOFNUTF EOBTOJSVOBFDQ PS VEUDT NOT FDIC-INSURED NO BANK GUARANTEE MAY LOSE VALUE 8Wells MFTM Fargo PHSB'Advisors, PTJWE" TS $- LLC, CNF. SF4 $1* TJB JHFS EFSFUT PSC FE SFL SFMB B EOB BQFT BSFU PO BC O LO GB MÜBJUF PG MF8 MT ' PHSB $P QN ZOB

Member SIPC, is a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company.

Wells " < W > " LLC. All rights reserved. 0211-4469 [76765] A1445 Š2010 Fargo Advisors,

PAGE 19

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SUNDAY, JUNE 19, 2011

Baby Boomers

THE PILOT — SOUTHERN PINES, N.C.

Should Plan Ahead

The senior population is growing by leaps and bounds. According to the United States Census Bureau, by 2011 there will be twice the amount of seniors that there were in 2000. That’s because the first Baby Boomers will turn 65 that year. Boomers should start thinking about estate planning now if they haven’t already.

Estate planning is the process of dissolving the items and property owned, as well as making end-of-life arrangements. Taking steps while one is physically and mentally able ensures that plans will be carried out as a person desired. It can also alleviate some of the burden on surviving family members when the time comes.

There are a number of things individuals can keep in mind when planning their estates and making other

important decisions.

* An estate plan is important regardless of personal wealth. A person with only $10 to his name can still draw up a plan.

* It’s never too soon to start estate planning. While it’s hopeful to expect a long life, sudden illness or other conditions are impossible to predict. Taking the time now to create an estate plan ensures that desires will be met and family will be left knowing how to carry out a person’s wishes.

* Estate planning involves a number of components: - will - power of attorney/executor of estate - living will or healthcare proxy - trust

* A will is perhaps one of the most important estate planning documents to draw up. It wills where assets will go and who will be in charge of financial and personal affairs when a person dies. It is inexpensive to draw up a will (there are even legal forms a person can purchase to do it oneself) even if an attorney is hired. At the least, everyone should have a will.

* Compile a list of all personal assets and account numbers. It will help others sort through personal effects when the time comes.

* Boomers should talk about their plans. Inheritances and wills can be tricky business and one that causes heated debate during a time of great emotion. Talking about plans before-

PAGE 21

hand allows surviving family and friends to be aware of what lies ahead.

* Consider reducing your estate.

Individuals can give up to $13,000 per year ($26,000 if gifting as a couple). This can reduce the potential tax burden on a spouse or a family member if estate funds are given to them after a person’s death. Unlimited medical and educational bills can be paid if they are made payable directly to the institution where the expense was incurred.

Baby Boomers in the prime of life may not want to think about estate planning and end-of-life issues.

However, it’s never too soon to set a plan in motion to protect loved ones.

PAGE 22

THE PILOT — SOUTHERN PINES, N.C.

Financial jargon can make the process of getting one’s finances in order and making smart economic decisions a bit of a challenge. To the average person, figuring out terminology can be a stumbling block and a hassle some want to avoid.

However, it’s important to know some of the lingo associated with financial planning to ensure money is being saved and spent in a responsible way.

401(k): In the United States, a retirement plan where money is diverted into an account and then invested. Current income tax is deferred until the money is withdrawn upon maturity.

Amortization schedule: A comprehensive schedule of payments determining the breakdown of the mortgage amount, interest,

Pinelake

principle received, and balance due through each period of the loan until the loan balance reaches zero.

Annuity: A stream of fixed payments that is generally paid as part of a life insurance policy or retirement fund.

Appraisal: An estimated value of property used most often in real estate transactions.

Bankruptcy: A legally declared inability of an individual or organization to pay their creditors.

Dividend: A portion of a company’s profit paid to common and preferred shareholders. The dividend is paid in a fixed amount for each share of stock held, whether in cash or more stock.

Hedge fund: An aggressive investment fund generally open to a

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limited number of investors.

Interest: Fees paid on borrowed assets.

IRA: Individual Retirement Accounts were initially set up in 1974 to provide a retirement option for individuals who were not covered by an employer-sponsored plan. Eventually it was opened up so anyone under the age of 70 could donate up to a certain amount of income a year.

Liquidity: The ability to turn assets into cash without losing a lot of value.

Longevity risk: The risk a pension fund or life insurance company takes on when offering its plans, due to the increasing life expectancy rate.

Pension: A deferred compensation scenario by where an employer pays

SUNDAY, JUNE 19, 2011

an employee a portion of income based upon length of service and employee age. Some pensions can be contributed to by the employee himself, with the employer matching the contribution.

Portfolio: Collection of stocks, bonds and money market instruments owned by an individual or company.

Prime Rate: A term applied in many countries to a reference interest rate used by banks.

Principal: The original amount of debt on which interest is calculated.

Rollover: This term is used for moving a retirement plan into a different one, generally when leaving a job.

Usually there is a set time period in which the rollover must occur so that a penalty isn’t issued.

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We have special pricing available on a variety of living accommodations. Here you’ll be greeted by a neighborhood of caring residents and new friends, plus, a carefree lifestyle, peace of mind, and lots of opportunities to pursue your interests. No wonder so many residents choose to move to our continuing care retirement community.

To learn more about our incentives and living options, call (910) 692-0386 or (910) 692-0382 today. Visit us at www.penickvillage.org.

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