The Alewife

Nesting by Howard Sorett

Getting your financial start

[For more information, please contact North Cambridge resident Howard Sorett, Agent, New York Life Insurance Company, at (781) 504-1557.]

Moving out of your parents’ house and having a go of it on your own can be a shock to the system. After decades of living in the comfort of family, you’re suddenly faced with the harsh realities of life — bill, bills, bills. How does one deal with these newfound responsibilities? You can start by building a sound financial foundation. Acting discerningly on these matters could make the difference between making it on your own, or moving back with the folks. Choose wisely.

Banking — Shop around. You shouldn’t necessarily stick with your current bank just because you’ve been with them a long time. You may want to open both a savings account to earn interest, and a checking account for paying the bills. It’s important to compare interest rates, but you also should be wary of charges for services (banks commonly charge customers for ATM use, check writing, etc.).

Howard Sorett

Some banks allow you to “link” your accounts to reduce fees. Many local newspapers run a “scorecard” of bank rates, which can be helpful. Although deposits up to $100,000 are federally insured, you’ll still want to choose a financially strong institution. If possible, have your employer “direct deposit” your paychecks into your bank. It’s a great convenience.

Health Insurance — With medical costs spiraling upward, having sufficient health insurance is a necessity. If you’re job hunting, you should take a serious look at the medical benefits offered by prospective employers. If you’re fortunate, your employer will offer a group health plan. If not, it’s essential to obtain some type of individual health insurance. Major Medical Plans typically offer a fee-for-coverage arrangement for a range of services including physicians’ costs, medical tests, hospital fees, etc. With some plans, you may go to a doctor of your own choice and your insurer reimburses you a predetermined percentage of cost.

Most plans have deductibles, which is the amount of money you must pay out-of-pocket before the insurer begins paying for some of the expenses. Health Maintenance Organizations have become a popular option because of their minimal out-of-pocket cost. Generally, members must visit only doctors affiliated with the HMO; however your co-payment could be as low as $10-$15 per visit. When evaluating different plans it’s important to consider what services are covered, and the co-payments and deductibles that are involved.

Life Insurance — If you think it’s just for “older people,” think again. If you have student loans from your college days, you may want to consider having some life insurance to help cover them, in the event of premature death. It may be a good idea to purchase a policy now, because generally the younger you are, the lower the premium will be.

Two of the basic types of life insurance are whole life and term life. Whole life is permanent insurance — it’s yours for as long as you continue to pay the premiums. The premiums are fixed and the policy cannot be canceled by the insurer if you continue to pay premiums. Over the long-term, the policy accumulates cash values.

This cash value may be borrowed* against to help meet your financial needs.
Term insurance can provide affordable coverage over a predetermined period of time — 5 years, 10 years, etc. It is pure protection and does not build cash value.
One type is not necessarily “better” than the other, and you may find that a mixture of the two may best suit your needs.

Nesting by Howard Sorett

Insuring your wedding dreams come true

[For more information, please contact North Cambridge resident Howard Sorett, Agent, New York Life Insurance Company, at (781) 504-1557.]

From the very moment of your engagement, your and your future spouse’s lives change forever. There are decisions to make, compromises to reach, families to mesh. With all the excitement and joy comes an assumption of new financial responsibilities as well. Being prepared for the financial changes a marriage will bring can only increase the comfort with which you adapt to your new role. Taking care of certain things early on can help you start off your married life on the right foot.

Wedding and Honeymoon Expenses: Weddings can be expensive. When you and your spouse return from your honeymoon, set up a timeframe in which any remaining expenses from your wedding –– such as those on credit cards –– can be paid off, whether with gifts received or otherwise.

Changing Beneficiaries: It’s important to dig out any old insurance policies, as well as documentation for your 401(K) and/or other retirement plans and update the beneficiary information on each.

Existing Bank Accounts: To some extent, you and your spouse will probably consolidate your finances. Review the terms of your existing bank accounts. Should you keep them? Close them? Open a joint account at the same bank?

Health and Auto Insurance: Assess your existing health and auto insurance. In many cases it will save you and your spouse a significant amount of money to obtain joint coverage.

Name Change: If you or your spouse change your last name, make sure it’s done on your credit cards, tax forms, driver’s license and passport, Social Security card, and voter registration card, as well as on bank accounts and insurance policies.

Nesting by Howard Sorett

[Howard Sorett is a licensed agent with New York Life in Waltham. He can be reached at (781) 398-9198.]

Should you buy insurance on the Internet?

Since the onset of the Internet, there has been a tremendous increase in the number of people who opt to buy products online.

This can be convenient when you know exactly what you want, but may not always be the best route when more information—or even advice—is needed.

While many consumers frequently buy commodities like CDs, books and clothing on the Internet, some shoppers harbor concerns about purchasing financial products, such as life insurance, online.

While the Internet can be a valuable resource for information and comparison shopping, it does not replace a face-to-face meeting with a trusted insurance professional.

The Value of a Relationship

In general, many people have mixed emotions when it comes to inputting personal information into the Web, especially information pertaining to insurance and financial products.

Some people worry that their privacy will be violated once their information is entered into a Web site.
An additional issue for people is accountability: In the event that a claim is made and not satisfactorily met, whom can one talk to?

With an Internet purchase, there is not always an identifiable person to back up the sale—nor a salesperson to stand behind that purchase.

Insurance and financial professionals are trained to build strong bonds with their clients.

They offer guidance and make specific recommendations, as well as provide up-to-the-minute information about new insurance and financial products.

The Internet as a Research Tool

This is not to say that the Internet can’t be a valuable resource for research and comparison shopping. In fact, the Internet is emerging as a major educational tool for consumers, presenting the opportunity to learn about insurance and financial products and prices online—and at your own leisure.

Nesting by Howard Sorett

[Howard Sorett is a licensed agent with New York Life in Waltham. He can be reached at (781) 398-9198.]

Do Money and Happiness Go Hand-in-Hand?

How many times have you said to yourself: If I only had a few extra thousand dollars a year, all my problems would be solved? The truth is that money usually has very little to do with your personal level of happiness. In and of itself, money possesses no value. It's not the money – it's how you use it that determines its worth. It’s important to realize that achieving your goals lies in your ability to see money for what it really is—a tool, no more, no less. Just as your car gets you from one destination to another, money is a financial tool that, when used correctly, can help you reach your goals.
Establish a “Wish List”

Deciding what is important to you is the first step to effective money management. Make a wish list of what you want for yourself and your family. Items such as a new home, new car, vacations, funding retirement or future college costs, or charitable donations may appear on your list. Next, prioritize your goals by deciding what is most important to you. Why? Because in a world of unlimited choices, you may have only limited resources. Finally, put a realistic price tag on each of your goals. For example, you may want $100,000 for college in 20 years. Or, you may like to retire with a $500,000 nest egg in 30 years.