November 5, 2013 – About a decade ago, someone came up with a novel way for people to promote a particular belief or to advance a personal cause or organization about which they felt strongly.

Silicone wrist bands.

Part fashion statement and part statement PERIOD, wearing one was a creative way to tell others how you felt about something without being “too preachy” while also helping you identify kindred spirits along the way with whom you held shared experiences or convictions.

I personally never jumped on that bandwagon (pun intended) even though I appreciated the sentiment behind its creation.  Heck, I rarely ever even wear a watch!

But one particular silicone wrist adornment has really been on my mind quite a bit of late.

Event + Response = Outcome

The Ohio State Buckeye football team is presently the No. 4 ranked team in the nation.  The team currently boasts the longest winning streak in the country going 17 games in a row (two years) without a loss.

If a few more things fall into place for them during  the next few weeks, Ohio State could end up playing for the 2014 BCS National Championship in January.

(Full disclosure:  Ohio State is this author’s alma mater and he wouldn’t mind seeing OSU play Oregon in a Big Ten/Pac-12 match-up at the Rose Bowl for old time’s sake.)

The bigger story that seems to be gaining more traction with every passing week, though, may not be the team’s ranking at all. But rather the E + R = O silicone wrist bands some of the players are boasting and the story behind them.

Second year head coach Urban Meyer is not just teaching football X’s and O’s.  He’s fostering leadership on his team by adopting a simple formula that is a popular topic on the motivational speaking circuit:  E + R = O.

E + R = O stands for for Event + Response = Outcome.

The philosophy goes something like this:

You cannot control an Event that comes your way

You CAN control your Response to that event

Your Response to the Event determines your Outcome

And at Ohio State, one leader’s R becomes another player’s E which then creates a new leadership opportunity.  The cycle continues feeding upon itself as one success begets another success.  And so on.

Next thing you know, the Buckeyes are undefeated and contending for a championship despite having a relatively young group of players.

Beyond Football

Short, sweet and a lot of fun to think about, this formula has implications well beyond the football field, however.  In our practice, we can find applications nearly everywhere we turn.

In mediation:  How will Party A respond to Party B’s “unreasonable” offer/demand (the Event)?  How will the mediator’s Response influence the Outcome?

In settlement discussions:  Will a plaintiff choose a structured settlement if offered (the Event)?  Or reject it (the Response) out of hand despite strong anecdotal evidence that all cash settlements can dissipate very rapidly (the Outcome) leaving them without money after a short while?

In retirement decision making:  Will someone getting ready to retire (Event) roll his/her 401k balance into some type of annuity (Response) that will provide guaranteed cash flows they can never outlive (Outcome)?  Or will they have a different response?

For more than 20 years, I have personally assisted people who Responded to the unplanned Event in their lives (an accident) by choosing a structured settlement when their claim resolved as a means of helping to secure their long-term financial Outcome.

Spend enough time thinking about it and you can see the formula’s impact on almost every facet of your own life.

So whatever your profession or status in life, next time something unexpected comes your way, think about how your response, not the event itself, will ultimately determine what happens next.

And if you’re so inclined, go ahead and yell “Go Bucks!” while you’re at it.  Some of us will get it.

“O – H . . . “

October 25, 2013 – In just about eight more weeks, the 2013 calendar will be ready for the recycle bin.

For contingency fee-based plaintiff attorneys who’ve had a successful year, recycling one of the best-ever tax deferral strategies is also on their minds as 2013 winds down:  Structured Attorney Fees.

Since the passage of the American Taxpayer Relief Act of 2012, our firm has experienced an EXPLOSION of requests from attorneys inquiring about structuring their fees.

Add to that the impact of Proposition 30 in California and similar tax increases in other states across the nation and the importance of effective tax planning for successful plaintiff attorneys becomes clearer.

These various tax hikes have combined to affect so many practitioners this year that structured attorney fees account for approximately 36% OF ALL OUR FIRM’S ACTIVITY so far in 2013.

Structuring fees just makes so much sense for those who qualify.

Yet surprisingly, attorneys who would never dream of leaving money on the table during a negotiation for one of their clients do it all the time when it comes to their own finances.

That’s where we can help.

With the right amount of analysis and planning, attorneys can arrange to structure their fee so that they credit the income in a future year (often, when an anticipated tax bracket will be lower) to maximize tax efficiency.

Add some pre-tax interest earned and most conclude that they simply cannot pass up such a money saving strategy.

So don’t leave YOUR money on the tax table.  Put it in your own pocket instead.  Call us for an analysis BEFORE you finalize your client’s settlement.

October 10, 2013 – With all this talk about quantitative easing, shutdowns, debt ceilings and similar esoterica, it’s easy to lose perspective about interest rates.

True, interest rates might seem low by historical standards but it really depends on your frame of reference.

That’s why we created this one-page flyer for you:  Historical Long-Term Interest Rates

Taking a broader view of history, many people are shocked to learn that precedent exists which makes very real the possibility that interest rates probably aren’t going to be heading too far north anytime soon.

Oh, sure, they’ll probably go up.  Then again, they may go down.  But whatever they do, history is telling us there’s a very good chance they’re going to remain in their current range for awhile.  Possibly for an entire generation.  “Bond King” Bill Gross recently said as much. 

Truthfully, though, only time will tell.

But while bond traders may obsess about interest rate changes, making and losing small fortunes along the way, people who have the opportunity lock into one of the most highly secure, tax-advantaged opportunities ever conceived (aka a structured settlement annuity) should ask themselves one very important question:

“What else am I gonna do with this money?”

If your needs are very short term, then choose cash.

But if you’re seeking safety, security and superior COMPARATIVE rate of return for long-term financial stability, nothing can match the benefits of structured settlements.

When put into place for a personal physical injury, all principal AND interest is 100% income tax-free making the comparative yield significantly better than most bonds.

When a structured settlement is chosen for a personal non-physical injury, all proceeds, principal and interest are taxable; however, because interest is earned on pre-tax dollars otherwise lost in the year of dispersal, the comparative yields can be up to 4-times better than anything else the individual can find without assuming significantly more risk.

This is why so many smart attorneys choose to regularly structure their attorney fees, by the way.

So I hope you find our flyer helpful as you plan for your future.  While you’re at it, check out the entire new BROCHURE section of our website where you can find lots of helpful information in easy-to-read pamphlets.

    “Substitute me for him – Substitute my coke for gin – Substitute you for my mum – At least I’ll get my washing done”

– Pete Townshend –

October 4, 2013 – Ever try to find a good substitute for security?

Betcha can’t.

At least not on synonym.com you can’t.  I tried but all I got was this message:

“Sorry, I could not find synonyms for ‘security’.”

I had to smile when I saw the website’s somewhat allegorical response since it contains meaning beyond its literal apology.

After all, when you’re talking about security, whether physical or financial, is there really anything else that can compare to “the state of being free from danger or threat?”

Structured Settlement Security

Individuals who choose structured settlements when resolving their personal physical or non-physical injury claims are choosing one of the most secure settlement options available.

The entire structured settlements industry was founded with safety and security in mind.  Structured settlements add stability to an unsettling process and provide people with the peace of mind necessary to resume as normal a life as possible following an injury or loss of a loved one.

JUST ADDED TO OUR WEBSITE:

Check out the new BROCHURES section of our website featuring a variety of pamphlets touting the security of structured settlements.

Moral of today’s story:  There is no substitute for security.

So don’t fight the truth.  Just call us next time you have a need to secure your financial future.

October 2, 2013 – For years, I have been working hard to help clients temper their enthusiasm about the prospects of interest rates rising significantly anytime soon.

Even though I wish the message were different, it’s somewhat gratifying when a world renowned “bond king” finally seems to agree with what I’ve been saying for some time:

Interest rates are pretty much going to linger in their current comfort zone for some time.

Here’s the headline and link to the article about the bond, not James Bond, king’s views on the subject from today’s CNN/Money:

Bill Gross: Get used to low rates ‘for decades’

You heard the man. For decades!

Regular visitors to our website and subscribers to our newsletter may recall us sounding this bell four years ago in our September 24, 2009 newsletter with the rather straightforward caption, “Historical Interest Rates.”

You’re a little late to this party, Bill.

When I founded Finn Financial Group in 2009 with the commitment to helping clients achieve long-term financial security, I knew I wanted to do more than simply give someone a structured settlement or annuity policy every once in awhile and send them on their merry way.

I wanted to be a source of trusted advice based on sound, quantifiable research and analytics so they could feel confident when making choices about their future.

In truth, I’m no more or less prescient than the next person since nobody can ever really know what the future holds.  Bill Gross has sure been wrong before.  But I do firmly believe more information is better than less information and I work hard to help people plan for a safe and secure future.

Impact on Structured Settlements and Annuities

Though it may seem counter-intuitive, all this actually bodes quite well for the structured settlement and annuity industries.

In fact, here are two important take-aways from today’s lesson as it relates to these two themes if you accept, as I do, rates are in the range they’re likely to remain for awhile:

Lesson One:  Don’t reject a structured settlement or annuity simply because you believe rates are “too low.”  Factoring in safety, security and tax advantage, the rates are superior to everything else out there of comparable risk in most instances.  And anything you’ll likely be able to find as an alternative in the near future.  (“Near” being relative if we’re talking about decades)

Lesson Two:  If you are anticipating a taxable settlement or attorney fee of any meaningful size, you can be EVEN MORE CONFIDENT that structuring makes sense for you.  That is, unless you enjoy giving away money you could easily keep for yourself.

All this, by the way, assumes the only reason to choose a structured settlement or annuity is rate of return.  When factoring in happiness, peace of mind, security and other more subjective benefits, the desirability of these options becomes even more pronounced.

But that’s a conversation for another day.

Meanwhile, Bill, if you’re reading this, maybe you and I can get together for lunch one of these days to compare notes on this and similar subjects?  Since your PIMCO headquarters is walking distance from mine, we could pull it off pretty easily.

Heck, I’ll even spring for the Bill if you agree to get the TIP. 

(All puns in this post inspired by Leonard Pinth-Garnell)

October 1, 2013 – Day One of the Affordable Care Act mandated Insurance Exchanges.

I am a licensed life and health insurance agent.

Although the majority of business I have conducted since forming my own company in 2009 has involved structured settlements and fixed annuities, I have had one client who, each year, chooses to buy a health insurance policy from me.

His name is Dan Finn.

That’s right.  I sell myself my own health insurance policy.  I do not have coverage provided by an employer or access to any group plans that I’ve tried to find so I need individual coverage.

As one who likes to choose his own doctors but also believes health insurance should be more like car insurance (pay the small stuff yourself, have the insurance for the catastrophes and major expenses), I prefer a high deductible PPO policy linked to a Health Savings Account (HSA).

This risk sharing just makes financial sense to me.  For both sides.

I can keep premiums a little lower, pay expenses I do owe out of a tax-advantaged HSA, see the doctors I want (mostly) and if anything terrible ever does happen, I limit my out of pocket risk and can rest assured I’ll be taken care of.

Up until today, that policy was pretty expensive though.  Truthfully, I was actually lucky I could even get it at all.

That’s because of a certain baggage I bring with me to the health insurance application process.

Having had a few skeletal makeovers in recent years, I fell into the “we really don’t want you here because of your stinkin’ pre-existing conditions” category and had to pay a higher premium for the privilege of the coverage I’d always enjoyed when I was part of a group plan.

Even though my bilateral total hip replacement and double-level cervical fusion surgeries were successful (Steve Austin’s got nothin’ on me!), to the health care actuaries, I was a mere pariah who carried such an increased risk of siphoning off resources from the system that they had no choice but to raise the price of my personal membership dues.

This happens to individual policyholders.  At least, it used to.

Now that the Exchanges are open for business, I just priced a new policy for myself with essentially the same coverage.  Slightly higher deductible, slightly lower total out of pocket maximum but comparable co-pays and benefits.

And guess what?

My insurance premium will be ALMOST HALF of what I have been paying these past few years.  For the same coverage!  45% less to be precise.

As evidenced by the goings-on in Washington this past week, opinions about the viability of “Obamacare” vary considerably.  It’s far too soon to tell how successful the law will or won’t be.  But from my seat, based on my own personal experience, I’m kind of OK with it.

September 25, 2013 – From the time a person enters the workforce until one’s last day on the job, nearly all the emphasis on retirement planning centers around what a person should do to amass as much money as possible.

For essentially one’s entire work life, the goal is the same:

Save as much money as possible and, along the way, find a way to make it grow as large as possible.

Unless your company offers a Defined Benefit plan that will pay you a monthly retirement income based on years of service, you probably spend your career trying to ACCUMULATE retirement wealth.

Read any financial text or listen to any financial talk show and most of the time the conversation revolves around some variation of this general theme:

How to turn some money into MORE money.

Changing Speeds, Gears and Directions

But a strange thing happens on the way to the rocking chair making it wise not to get too comfortable with this pattern of behavior. As Jerry Garcia once sang, “When life looks like Easy Street, there is danger at your door.”

When you hit retirement, the need to AC-cumulate wealth shifts to the need to DE-cumulate what you’ve saved.

In other words, you’ve earned it. Now, spend it.

And . . . (oh, by the way) . . . make it last a lifetime.

But achieving success in this area requires a philosophical and behavioral shift that many find exceptionally difficult to make.

Unfortunately, the financial community has generally done a poor job helping the public understand the concept of decumulation.

Fortunately, there is a solution.

Annuities Work!

While not the only solution, annuities offer perhaps the best solution to addressing the decumulation challenge everybody will face eventually.

According to one excellent research paper, Rational Decumulation, lifetime annuities are the most cost-effective and least risky asset class for generating retirement income for life.

But old habits die hard as evidenced by the fact that too many people still prefer clinging to the seemingly sensible notion that “what got me here will serve me well going forward.”

Such dangerous thinking can backfire, though, as traditional investing carries the risk of loss since financial markets always fluctuate.

Annuities, on the other hand, overcome this risk and can provide steady guaranteed payments ensuring you’ll have money to spend when you need it. Life annuities keep paying for as long as you live – a claim no other financial option can make.

Granted, retirement planning isn’t a whole lot of fun and many allow the fear of making the wrong decision prevent them from making any decision.

But investing a few minutes to see why annuities are such an attractive option can go a long way toward helping you secure your financial future.

September 4, 2013 – Sales of deferred-income annuities, the exchange of a lump sum today for a future guaranteed fixed cash flow at some point in the future, have increased 151% in the first six months of 2013 versus the same period a year earlier.

The total deferred premium sales ($930 million) is still less than 3.0% of the total premium of fixed annuity sales ($34.5 billion) during the same period but the increase has prompted one life market, Lincoln National, to jump into this re-growth area according to an InvestmentNews report.

Most fixed annuities are still “immediate annuities” which require guaranteed cash flows to commence within 13 months of date of purchase.

If you think about it, the reemergence of deferred annuities makes sense:

Baby boomers are coming to the end of their normal work life

But many of them had their retirement plans permanently altered by The Great Recession

Now many of them need to work longer before retiring

For those lucky enough to have seen their retirement balances rebound, they sure don’t want to risk losing it again.

There is (or should be) a distinct different between how you approach money during your retirement accumulation phase and when you’ll actually start using it to live on

Add to this the numerous studies showing how people like the safety and security of receiving guaranteed cash flows they can never outlive and the increasing popularity of deferred annuities is not surprising.

We have a variety of retirement options for those seeking to convert their retirement savings to guaranteed lifetime income.

Let us help you sleep better at night by securing your future with guaranteed income you can never outlive.  Call anytime we can help.

August 29, 2013 – On the heels of the Supreme Court’s June decision to repeal a key provision of the Defense of Marriage Act (DOMA) which barred recognition of gay marriages, the U.S. Treasury and the Internal Revenue Service announced today that same-sex married couples will be indistinguishable from opposite-sex married couples for Federal tax purposes.

And on the heels of THAT important news, we haves some structured settlement news of our own we’re happy to impart.

One of the life companies we represent, Berkshire Hathaway, is on record as stating they will now write joint-and-survivor annuities for same-sex couples who are legally married and otherwise entitled to compensation stemming from a personal, physical injury claim.

As a reminder, joint-and-survivor annuities provide guaranteed lifetime income for as long as BOTH spouses are living.

These “J&S” plans have long been a popular choice with married couples seeking to ensure long-term, uninterrupted financial security for the surviving spouse upon the death of the other since the cash flow can never be outlived.

In keeping with the new IRS policy, it’s important to note that, as of today, this option is only available to “legally married couples, and not to registered domestic partnerships, civil unions or similar formal relationships recognized by certain states.”

We are pleased to add this heretofore unavailable settlement option to our complement of products and services for those clients of ours who qualify and can benefit from joint lifetime income.

Please call anytime we can be of service.

August 28, 2013 – As we celebrate today’s 50th anniversary of the March on Washington for Jobs and Freedom, I’m honored to be able to say I have a friend in Congress who has a very personal connection to this historic event.

Congressman John Lewis (D-GA 5th District), Chairman of the Student Nonviolent Coordinating Committee ( SNCC) in 1963, was the youngest of the speakers to join Martin Luther King, Jr. on the steps of the Lincoln Memorial that day.

He was 23.

Rep. Lewis, recipient of the Profile in Courage Award in 2001, was in Washington again today to remind America of Dr. King’s vision and to reflect upon the issues of the day.

Along the way, in a long and distinguished career fighting for what’s right, Congressman Lewis became a natural advocate for structured settlements.

A leading voice for the benefits of structured settlements, Rep. Lewis addressed the National Structured Settlements Trade Association (NSSTA) at its annual meeting in 2010.

In honor of his many years of dedicated support to this industry, NSSTA created a special brochure to pay tribute to this fine man entitled:

An American hero on civil rights & structured settlements

How can I consider this living legend a friend?

Because, in his closing comments to our industry, this great, humble public servant, pledged his unwavering support of structured settlements by saying:

“you always have a friend in John Lewis as long as I’m serving in the Congress.”

Thank you, Congressman Lewis, for your tireless efforts to ensure the goal of justice for all is never forgotten and for your commitment to the structured settlements industry.

You’re a terrific friend!