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!

From our August 19, 2013 Newsletter:

 We’re Published Again

“Taxable damage awards and the use of structured settlements”

appears in the August, 2013 issue of:

“The magazine for Northern California Plaintiffs’ Attorneys”

Click [HERE] to read the article online

In 2013, our firm has been exceptionally focused on the the topic of structuring taxable settlements, verdicts and attorney fees for one very simple reason:  Recent changes to top end tax brackets, particularly in California and other high income tax states, have elevated the importance of this subject to unprecedented levels. Another way to look at it:

Taxable $ x (^ Tax %) = < $ 4 u

To better serve you, we have researched the subject extensively and developed some proprietary analytical tools designed to specifically help address the impact of Proposition 30 and the American Taxpayer Relief Act of 2012.

We invite you to contact us anytime for a complimentary and confidential demonstration so we can help you make more informed decisions about these taxable matters in advance of settling any of your pending cases.

BONUS: Schedule Your MCLE Session TODAY

As a service to the California legal community, we even created a FREE seminar/webinar based on this timely topic which has been APPROVED by the State Bar of California for 0.50 hours Minimum Continuing Legal Education (MCLE) credit.  If your law firm, bar association or other attorney group wants to learn more, just let us know.  Designed to conveniently fit into a “lunch-n-learn” session to accommodate your busy schedules.  Or, the perfect complement to a lawyers’ convention agenda!

I hope you enjoy the article and find it helpful in your practice.

Thank you for the opportunity to be of service and best wishes for continued success!

Dan Finn

August 16, 2013 – Remember our blog post from January when we cheered the fact that the 10-Year Treasury closed above 2.0% for the first time in almost six months?

Dramatic Interlude:  That’s OK, that’s what we’re here for.  Here you go: 10-Year Treasury Closes Above 2%

Back then, we gave you three reasons why we saw that particular benchmark as important.  It’s gratifying to look back now and see that we were spot on with every observation we made.

Well that, as the Monkees-minus-Mike-and-Davy once sang, was then and this is now.

Now, things are even BETTER!

Today’s close of the 10-Year, often a benchmark for the direction of structured settlement rates, at 2.83% is meaningful for a few reasons:

Treasuries are yielding nearly TWICE what they were at their nadir of 1.43% in August of 2012.

2.83% is within a gnat’s eyelash of 3.0%.  We’re almost to the next big hurdle folks!

Ergo, most structured settlement payouts are better than they’ve been in quite some time.

Choose Your Stations Wisely

While many financial and money “experts” may groan about this being bad news, keep in mind these folks will be viewing bonds as investments.

But for those receiving structured settlement offers from casualty companies TODAY or anyone choosing a structured attorney fee or fixed annuity product TODAY, they need not worry because they are not investors.

They are people looking to convert a given lump sum into the best possible tax-advantaged future cash flow option possible.

For those listening to that station, today’s close is outstanding news.

Where To Next?

While we’d like to think that a year from now or sooner, structured settlement and annuity rates will be double what they are now, we’re not convinced that will happen.

Our crystal ball works about as well as everyone else’s.

Could it happen?  Absolutely.  Will it?  Nobody knows.

For our part, we won’t be surprised if it’s a very long time, possibly a decade or more, before rates approach or exceed 4.0%.

So for now we’re celebrating the fact that our clients lately have been the beneficiaries of this very positive market upswing.  We’re always happy to be of service and especially thankful when we can pass along some good news as we’ve just done.

August 12, 2013 – If you were hosting a party and wanted to make sure your guests left your house with great memories of fun times and plenty of belly laughs, the American Academy of Actuaries likely wouldn’t top your list of potential entertainers.

Real or imagined, this group has the reputation of being nothing more than a collection of boring, bean counting duds.

If, on the other hand, you were hosting an event designed to provide your guests with reliable, factual data about their probable life expectancy and some advanced statistical models and projections designed to help them make the smartest possible choices about their retirement and injury settlement options, these guys would be your first choice.

And thanks to a public policy discussion paper published in June by the Lifetime Income Risk Joint Task Force of said American Academy of Actuaries, you don’t even need to host such a party.

Just point your friends, relatives, associates and clients here:

“Risky Business: Living Longer Without Income for Life”

The paper itself is a call to action regarding the challenges, both individual and societal, created by lack of sufficient lifetime income for those heading toward or already into retirement.

 “Lifetime income risk, or the risk of running out of income due to living longer than a retiree initially planned, is not just a personal financial issue but a societal one as well since public safety-net programs can be strained if expected to cover large numbers of individuals who have not addressed their lifetime income risk.”

The problem is compounded when individuals receive money for the settlement of a personal injury claim and the settlement is designed to to supplement their income for a lifetime.

Fortunately, Congress continues to support the tax laws that make structured settlements desirable for those who face the dual challenges of diminished retirement income options at the same time their ability to earn a living may be compromised.

We have been focused on the issue of longevity risk for years.  Check out some of our earlier blog posts and newsletters on the topic:

Live Longer . . . Buy Annuities

Annuities are the New Black

Why You Should Consider a “Personal Pension”

Retirement Goggles

Pension Choices

We’ll continue to beat the retirement security longevity risk drum and serve as your trusted source of information to secure your financial future.  So check back often and please call anytime we can help.

For Immediate Release:  August 7, 2013

Newport Beach, CA – The Finn Financial Group proudly announces that it has been honored with a 2013 APEX Award for Publication Excellence in the Education & Training Electronic Media category.

” . . . based on excellence in graphic design, editorial content and the ability to achieve overall communications excellence.” 

Among the notable organizations vying for an award in the various categories this year were:

The Walt Disney Company
Ernst & Young LLP
Jackson National Life Insurance
American Cancer Society
Cleveland Metroparks Zoo
American Airlines
Ford Motor Company
The Vanguard Group

The Award of Excellence further distinguishes Finn Financial Group as a:

Best Structured Settlement Resource.

“We are extremely proud to have been selected from among over 2,400 entrants for this unique honor, especially in a category we’ve worked hard to differentiate ourselves in,” said founder, CEO and President Dan Finn.

“Our firm was founded with a commitment to helping clients achieve long-term financial security and success using structured settlements, tax-advantaged annuities and related products and services.

“Providing timely and relevant educational content using a variety of educational media helps us fulfill that pledge and this award acknowledges our commitment to helping those we’re dedicated to serving.”

APEX Awards for Publication Excellence, now in its 25th year, is an annual competition for publishers, editors, writers and designers who create print, Web, electronic and social media.

Mobile users: Click Here

July 26, 2013 – A.M. Best interviewed me last week as a featured expert for their Insurance Legal Podcast Series, a series that “examines timely and important legal issues affecting the insurance industry from an attorney’s point of view.”

Even though I’m not an attorney, my firm interacts with and provides support to many lawyers across the country.  So this podcast seems a natural fit.

The podcast was an outgrowth of an article I recently wrote as a service to the California legal community which appeared in Advocate, a publication of the Consumer Attorneys Association of Los Angeles (CAALA).  That article, “Taxable Damage Structured Settlements,” expounds upon the theme this podcast touches on.

Since the podcast takes about eight minutes to listen to, I’ll let you get right to it.  I hope you enjoy the interview and look forward to answering any questions you might have on this or any related subject.