Saving for Retirement: Are you Ready?

Presented by: Matt Clayson

It’s Never Too Late to Get Started

Will I have enough money to retire? It’s a common question and one that has increased in magnitude lately — especially for people in their 40s and 50s.

Indeed a MassMutual study in 2018 found that the greatest worry for those on the edge of retirement was not having enough money to enjoy themselves.

This can generate a feeling of frustration. You’ve been working hard for over 20 years. You’ve been saving as much as you can. Then, the market crashes, and your savings disappear. It’s not too late to bounce back. Even if you’re 55 years old and decide that today is the day to begin saving in earnest, you still have time to build up income for retirement.

On your mark, set your priorities, go

Determine what you want out of your retirement…what are your priorities? Sit down with a pen and paper and start a list. Empower yourself to make the important decisions today that will set tomorrow in motion:

  • When do you want to retire?
  • Where do you want to live?
  • What kind of lifestyle do you want to lead?
  • Consider your current lifestyle. Can you cut back to save more for retirement?

These are just some of the questions you should be asking — and answering — yourself. So take the first step and start making some decisions.

Save more, spend less

The most obvious advice still applies: save more, spend less. But there’s more to it than that.

Create a budget to help you stay on track — and actually stick to it. Decide where you can trim your expenses. What can you live without now so you can have more later?

If your budget isn’t working, you may want to consider downsizing to a smaller home or a less expensive location to help maintain your standard of living. This may be a difficult exercise, but remember you’re trying to catch up.

Speaking of catching up, if you will be age 50 or older at the end of the calendar year, you can take advantage of catch-up contribution options to accelerate the growth of your retirement accounts. The bottom line: make the maximum contributions possible to your employer’s retirement plan, including any available catch-up options.

Think outside the box

There are certain financial products and savings instruments that you may not be familiar with, but that may help you get more out of your money. Many people opt to consult a financial professional to help become aware of options and lay out a plan.

Delay retirement (The beach will wait for you)

People are working longer than ever before. Delaying your retirement by three years from age 62 to 65 can boost your assets significantly — thanks to the combination of making extra contributions to your employer-sponsored retirement plan, not taking withdrawals and allowing your funds more time to grow.

In addition, if you anticipate receiving Social Security retirement benefits, it’s important to understand that monthly benefits differ substantially based on when you start receiving them and the filing option you choose. For every year you postpone collecting benefits beyond your full retirement age (typically 66 or 67), you can earn an annual delayed retirement credit of up to 8 percent.

On the flip side, filing for benefits before your full retirement age can permanently reduce your monthly income. Benefits will decrease based on how early you retire..

The bottom line is that there are real steps and strategies you can take today to help secure your future. It’s never too early or too late to evaluate your current retirement savings plan — or create a new one.

This Old House, Needs Some Updates

 

Staring at the same four walls for the past year may have triggered you to start thinking about making some changes. Many of us have taken the opportunity to tackle home projects this past year. In 2020, Farmers Insurance surveyed homeowners and found that 62% of those polled are planning renovation or maintenance on their homes. Of those planning renovations, only 28% said they understand their homeowner’s policy. If you have already completed or are thinking about making changes, here are a few insurance considerations.

  1. Additions
    • Your home insurance provides coverage for the home as it stands today. Increasing square footage, adding a garage or pool increase the value of your home beyond your coverage limits.
  2. Improvements
    • The most common, and costly, improvements are made when updating bathrooms or kitchens. Upgraded finishes such as countertops, cabinets and fixtures may leave a gap in coverage. This is especially important for condo unit-owners. As a unit-owner you may be responsible for any improvements made after the purchase.
  3. Faulty Work
    • Your policy most likely wont supply coverage for faulty work. For instance, if you update your electrical system and down the road it leads to a fire, there may be coverage for damage caused by the fire, but the cost to correct and replace the electrical components would be out of pocket.
    • When choosing a contractor, always request to see their certificate of insurance. Contractors should have coverage for liability, property, and workers compensation. In the event they do not have adequate insurance, you may want to consider a different contractor. If a contractor causes damage to your home, their insurance should be the primary option for recovery.

In summary, its important to ensure you have adequate coverage in place and are clear on the risks that come with home improvement. If you are planning or recently completed a renovation, please contact us to ensure your new investment is adequately protected!

Protect Your Business in a Worsening Pandemic: 3 Things You Need to Know

Over the past year, COVID-19 has totally transformed the way that businesses operate. We’ve weathered the initial storm of uncertainty and ushered in a new normal for risk management. But as the pandemic continues to evolve in 2021, many small business owners are still unsure of the implications for their insurance policies.

You probably have a lot of questions. Are you covered? What happens if you’re not?

To help you navigate this unprecedented landscape, we’re sharing the top three things business owners need to know right now to protect their business.

3 things you need to know about business insurance during the pandemic

 

1. Know That You May Not Be Covered

Don’t assume that your current insurance policy covers all of the possible scenarios that you’re facing today. Some disasters, namely pandemics, are not covered by business interruption insurance. (Learn why this is actually a good thing for policy holders.)

Other types of risks might be newly relevant for your business. Even if there are policies that can cover them, you may not have opted to purchase those policies when they were less likely to affect you. Keep reading for our recommendations on which policies to ask your provider about.

 

2. Know the Three Levels of Risk Mitigation

Even during the best of times, operating a business means taking on risk. Running a business during a global pandemic comes with even more risk. Your insurance provider’s job is to help you assess those risks and mitigate them.

When assessing risk, think about bucketing them into three categories:

  1. Risks from third parties: Movers, cleaners, meeting planners, and many other vendors all expose your business to risk. Make sure that they have proper insurance, and in many instances, name your company as “additionally insured” on their
  2. Risks that don’t require coverage: You might be surprised to hear an insurance provider tell you not to get a policy, but we believe that businesses should only pay for the coverage they need. Take a closer look at these three policies to see if they’re necessary for your company or not.
  3. Risks that require coverage: This is the bulk of risk inherent in doing business. But think beyond simple liability insurance.  Consider other exposures, such as mistakes (errors and omissions) and an umbrella policy to better cover all your liabilities.  More on this below.

 

3. How Can I Get Covered?

Take these questions to your insurance broker and find out if you’re covered. If your current policy doesn’t cover you, they can help you identify the best way to mitigate your risk.

Business Interruption Insurance

If your business needs to shut down at any point during the pandemic, you need to know what is and isn’t covered by your insurance policies.

  • Do you have business interruption insurance?
  • If you do, do you know what is included? Keep in mind that you most likely will not be covered for pandemic-related losses. For a refresher on what is typically covered by these policies, check out our recent blog on business interruption insurance 101.

If you don’t have business interruption insurance, consider getting it. Fires and floods are much more likely to happen than another pandemic, so it’s wise to be prepared for these more commonplace disasters.

General Liability

When you originally set up your general liability policies, your business’s operations likely looked very different than they do today. We recommend taking another look at your business liability insurance to ensure it covers the risks you’re experiencing today.

  • Do your general liability and workers compensation policies cover employees when they’re working from their homes?
  • Are you taking on any extra cybersecurity risks when your employees are conducting business online, on their home wifi networks?

Health Claims

The pandemic is first and foremost a health crisis, so your employees’ health should be top of mind. Take a closer look at your health insurance policies and make sure to address the following questions:

  • Do you have short term / long term disability insurance? Does it adequately cover your employees’ welfare? Does it reduce risks and costs for the business?
  • If your employees test positive for COVID-19 and need to take sick leave, is that covered under your current policy?
  • If COVID-related leave is not covered, what sort of risks will you be taking on? What will it cost you? Are you at risk for lawsuits?

Errors and Omissions

Errors and omissions policies are a type of professional liability insurance that protects your business against lawsuits for negligence or mistakes in client work. With employees working from home instead of the office, many of the oversights against mistakes may be harder to administer. It’s best to take the extra step and mitigate this risk.

  • Do you have an errors and omissions policy?
  • Does it cover you when employees are working remotely?
  • What kind of mistakes are covered? What is unique to your business?

Umbrella Policy

Commercial umbrella insurance policies supplement your other liability coverage. If you go over your coverage limit, your umbrella insurance policy will kick in to make up the difference. Having this extra layer of coverage can protect you from large lawsuits or scenarios where multiple claims exhaust your base policy’s limits.

  • Do you have an umbrella policy?
  • What is included in the umbrella policy? What is excluded?
  • What is your umbrella limit? Are you carrying the right amount of coverage?

 

Cleary Insurance is committed to helping small businesses identify, offload, and mitigate risks. If you’d like to speak with a representative, we can help you find exactly the right level of commercial insurance coverage for your business needs during the pandemic and beyond.

Taking Care of Your Mental Health

2020 has been a long year. COVID has changed our family & social landscape, Old man winter is settling in, days are shorter, nights are longer and this time of year carries its own stresses for many. Mental health and wellness should be a top priority and many people may not realize the signs and maybe uncertain where to get help.
What is mental health?
Your mental well-being includes how you think, act and feel. It also helps you cope with stress, relate to others and make decisions. Mental well-being includes mental health, but goes far beyond treating mental illness. For example, you could go through a period of poor mental health but not necessarily have a diagnosable mental illness. And your mental health can change over time, depending on factors such as your workload, stress and work-life balance.
What is mental illness?
Mental illness refers to a variety of conditions that affect your mood or behavior, feelings or thinking. Mental illnesses can occur occasionally, while others are chronic and long-lasting. Common mental illnesses include anxiety, depression, schizophrenia and bipolar disorder. 1 in 5 U.S. adults will experience a mental illness in any given year, and more than 50% will experience mental illness at some point in their life.
Why is mental well-being important?
Mental health is extremely important and doesn’t just affect the mind, but can also have affects on your physical well being causing weight gain, heart attack or stroke. Because it’s such a crucial component of your health, it’s important to focus on maintaining or improving your mental health. While it’s not always easy, there are ways to help improve your mental health. Here are three simple ways to do so every day:
  1. Express gratitude. Taking five minutes a day to write down the things that you are grateful for has been proven to lower stress levels and can help you change your mindset from negative to positive.
  2. Get exercise. You probably hear all the time how beneficial exercise is to your overall health, but it’s true. Exercising can improve brain function, reduce anxiety and improve your self-image.
  3. Get a good night’s sleep. Strive for seven to eight hours of sleep a night to improve your mental health.
If you or someone you know is feeling off, not like yourself/themself or sad please know that you are not alone. There are resources available to you. You should contact your primary care physician for guidance or the National Suicide Prevention Lifeline which is available 24/7/365.
National Suicide Prevention Lifeline at 800-273-8255
website: https://suicidepreventionlifeline.org

Want to lower your tax bill?

 There are a number of opportunities to offset prior-year income and capture credits.

Areas to look at include:

  1. Retirement plan contributions
  2. Deductions
  3. Penalties
  4.  Credits

Retirement plans: Retroactive contributions

Your traditional Individual Retirement Account, or IRA, offers the biggest potential bang for the buck.

The Internal Revenue Service (IRS) allows taxpayers to make deductible prior-year contributions all the way up to the tax-filing deadline.

For tax year 2020, total contributions to all of your traditional and Roth IRAs for taxpayers under age 50 cannot be more than either $6,000, or your total compensation for the year if you earned less than that amount. Those 50 and older can make an additional $1,000 catch-up contribution, for a total of $7,000.1

Your actual tax deduction, however, may be limited if you or your spouse are covered by a retirement plan at work and your income exceeds certain levels.

Eligible taxpayers can also make retroactive contributions to their Roth IRA until April 15. Different phaseout limits apply for Roth contributions.

Because Roth IRAs are funded with after-tax dollars, your contribution will not yield a current-year tax deduction, but it could potentially produce a better investment return since earnings upon retirement can be distributed tax free.

Tax deductions: Roll up your sleeves

Most taxpayers take the standard deduction, a fixed dollar amount set forth by the IRS that reduces the amount of income on which they are taxed.

Why? Because it’s a lot less work. You don’t have to keep track of your expenses, or individually deduct them on IRS Schedule

As a result, many taxpayers who previously itemized deductions may find it more beneficial to claim the standard deduction this year.

Tax penalties

The only thing worse than giving Uncle Sam his due is leaving him a tip.

To avoid a potentially hefty late-filing penalty, you must submit your income tax return on time, regardless of whether or not you can afford to pay.

Indeed, the failure-to-file penalty can be as much as 5 percent of your unpaid taxes for each month or part of a month that your tax return is late, up to 25 percent of your unpaid taxes.

Submitting your tax return electronically ensures greater accuracy than mailing it in since the IRS e-file system flags common errors and kicks back returns for correction.

Tax credits

When it comes to lowering your taxable income, you are your best advocate.

Tax deductions, which reduce the amount of your income subject to tax, are great, but tax credits, which reduce your tax bill dollar for dollar, are even better. So don’t leave any tax credits or deductions for which you are eligible on the table.

Families with dependent children may be eligible to claim a credit of up to $2,000 per qualifying child under the Child Tax Credit.

If you paid for someone to care for your child, spouse, or dependent so you could work or look for a job, you may be able to claim the Child and Dependent Care Credit.

Similarly, those paying for higher education expenses may be able to claim one of two tax credits: the American Opportunity Tax Credit, or the Lifetime Learning Credit. You cannot claim both credits for the same student in the same year.

If you haven’t yet filed your tax return, there’s still much you can potentially do to minimize the amount you may owe.

By taking advantage of tax-favored retirement tools, filing an accurate return, and educating yourself on available deductions and credits, you might just save enough to pay off your credit card debt or catch a flight somewhere warm

Preventing Frozen Pipes for Business

Cold temperatures can reach areas of your facility that you seldom visit or cannot see, such as:

  • Crawl spaces
  • Closets
  • Enclosed spaces (e.g., attics, lofts, roof spaces)
  • Warehouses
  • Isolated storage areas

Strategies to Help Prevent Frozen Pipes

Some prevention strategies to consider:

  • Properly insulate and/or provide approved heat tracing for water-filled pipes located in exterior walls or unheated spaces.
  • Drain any piping that is not required during the winter months.
  • Maintain a minimum temperature of 40° F (4.4° C) in building areas with processes susceptible to freezing, wet-pipe sprinkler systems, fire pump houses and dry-pipe valve enclosures.
  • Ensure that anti-freeze sprinkler systems have sufficient concentration (appropriate specific gravity readings) of antifreeze to withstand freezing weather.
  • Inspect dry systems to help ensure air settings are correct, air maintenance systems are in good operating condition, and any pipe closets are well insulated. If any heat tape or heating systems are being used, ensure that they are UL-listed for this specific purpose and are in good operating condition. Dry-pipe sprinkler systems low points and auxiliary drains should be opened and drained of any water or condensation.
  • Any branch lines on wet sprinkler systems exposed or subject to extreme cold weather should be insulated and heat traced. Electric heat tracing products should be UL-listed for this specific purpose.
  • Fire pump test headers should be checked to ensure they have been properly drained.
  • Fire pump and dry-pipe sprinkler system equipment rooms should be checked routinely to ensure the heaters are in good operating condition.
  • The use of low temperature supervision can help to ensure rooms are being properly heated.

 

https://www.travelers.com/resources/facilities-management/preventing-frozen-pipes-for-businesses

Client Spotlight: GreenRoots

GreenRoots
COVID19 Response in Chelsea and East Boston

As an environmental justice organization serving some of MA’s most vulnerable residents, GreenRoots has trumpeted for years that our neighborhoods would be hit first and worst by a disaster. However, we anticipated that the crisis would be climate-related, not the COVID19 pandemic that is ravaging our communities.

Chelsea and East Boston continue to be the hardest-hit communities in MA. In the first pandemic wave, Chelsea’s infection rate was 6x higher than Massachusetts’ rate and higher than the hardest hit boroughs in New York City. Our neighbors fell ill and were dying to a devastating degree. Now, in the newest surge, Chelsea continues to have a consistently high infection rate. East Boston is identified as the hardest hit Boston community, with rates equaling or surpassing those in Chelsea. We are just seeing the beginning of the long-term impacts, both health and economic, of COVID19 in both these communities.

GreenRoots responded to the crisis swiftly and decisively, and continues to play a leadership role in the pandemic response for all of our neighborhoods on both sides of the Chelsea Creek.
Building systems to address community needs was a key initial focus of GreenRoots. On March 11th, GreenRoots coordinated a call of numerous Chelsea stakeholders to plan a coordinated response for the COVID-19 pandemic. This initial call turned into Chelsea’s Pandemic response team, with over 75 stakeholders, 10 working groups, with over 65 days of daily calls. GreenRoots was also instrumental in developing and implementing the East Boston Mutual Aid Network. Both in Chelsea and East Boston, these two systems provided the backbones for community-led responses. In addition, GreenRoots’ coordinated effort around public health (including a letter to Governor Baker with 47 community signatories) led to increased testing and National Guard support for food distribution.

GreenRoots was a founding partner of the One Chelsea Fund, a cash assistance program facilitated through the United Way in collaboration with the City of Chelsea, The Neighborhood Developers and La Colaborativa.  Together, we raised more than $1.3 million for distribution to Chelsea residents. To learn more about the fund, check out a One Chelsea Fund Video. GreenRoots distributed approximately 1,700 checks ($425,000 in total) to residents. We are now launching phase II of the fund which will be directed to address anti-displacement efforts in Chelsea. In East Boston, our staff collaborated with Centro Presente which distributed $155,000 to local residents; and weekly boxes of food to food insecure families.

In addition to the aforementioned activities, GreenRoots helped with food distribution, diaper donations, funds for funerals, distributing PPE and multi-lingual message and much more.
To learn more, visit www.greenrootschelsea.org.

Stop Leaks Before It’s Too Late

Fire might be a homeowner’s greatest fear, but some insurance company will tell you that water is the far more common cause of property damage, even if you don’t live in an area subject to flooding. And it can come from many sources: A failing water heater, a burst pipe, a broken supply line under your sink, a clogged toilet, or even a split hose connected to your washing machine.

Just as it’s essential to have a smoke detector in each of your home’s bedrooms and common areas, you’d be wise to install leak detectors in places where water damage could start: The laundry room, water heater closet, the bathroom, under your kitchen sink, and so on.

Water shut-off devices are installed by a plumber directly onto your water line, a flow-based water leak detection device monitors the flow of water throughout your home. If an unusual activity or flow of water is detected – probably caused by a leak somewhere in your plumbing or pipes – the device will alert you first and then shut off your water supply to help minimize damage.

Many insurance companies also offer a break on your home insurance if you install water leak detection systems.  A one-time investment can end up paying for itself over time.

 

 

Tips to Avoid Finacial Stress

Whether you worry about contracting COVID-19 or not, chances are you share in the financial stress felt by millions during the last few months.

There are steps you can take today to help put some of your fears to rest. But first, a look at why controlling stress is important.

Tips to manage stress

In the case of the pandemic, the CDC suggests strategies for relieving stress. These include meditating, volunteering, taking breaks from reading the news, eating well, exercising, and using counseling or therapy services if needed.

If you are currently experiencing cash flow challenges and haven’t done so already, reach out to your creditors, and any other financial institution with whom you do business to discuss payment leniency.

The financial checkup

Your next move is to review the money that comes in and goes out every month to make sure you have a firm handle on your cash flow situation to possibly uncover some ways to reduce expenses.

Investors should ensure that their portfolios are well-balanced and reflect their financial goals, time horizon, and risk tolerance. Many investors rely on guidance from a financial professional.

Retirees can create dependable income streams (Annuities, Pensions, in addition to Social Security) to help shelter themselves from volatility. Those in the accumulation phase can establish an emergency fund of 3-6 months worth of expenses held in cash.

While it’s critical to review your financial position, it’s imperative to also address your risk management and estate planning needs.

This includes Disability Insurance, to protect your income if you become too ill or injured to work. If you have coverage through your employer, make sure you’re absolutely certain how the plan works – what % of your income it would replace (60% is most common but can be less) and if it would be taxable. The last thing you need at that point is an unpleasant surprise.

Life insurance is also of critical importance, to protect those who are financially dependent upon you. Be sure to review the coverage you have in place (if any) and make sure it’s up to date. Many times, people set up coverage early on, but don’t update it as life events occur, such as marriage, children, buying a house, etc.

The same concept pertains to updating the beneficiary designations on your retirement accounts, insurance policies, and address overall Estate Planning needs.

Being proactive with your finances puts you back in the driver’s seat, which may not solve all your immediate challenges, but can reveal a path forward to restoring financial wellness and help to manage stress.

5 Summer Wellness Tips

Summer is an exciting time of the year that is typically filled with cookouts, outdoor activities, and other events.  To promote a happy, healthy summer, try following these five wellness tips:

  1. Drink plenty of water.  Dehydration in the summer months can make you more susceptible to heat exhaustion and heatstroke.  To avoid symptoms of dehydration such as dizziness, weakness, and fatigue, try to drink at least eight to ten glasses of water throughout the day.
  2. Watch what you eat at summer cookouts.  Common cookout foods like burgers and hot dogs are full of fats that can make you feel lethargic.  Sticking to lighter more refreshing foods like fish, pasta salads and watermelon can give you more energy while still satisfying your appetite.
  3. Protect yourself from the sun.  Protect yourself from the harmfulness of UV rays by wearing protective clothing, staying in shaded areas during the sun’s highest points (from 10 a.m. to 4 p.m.) and using a sunscreen with an SPF of at least 15.
  4. Exercise safely outside.  Exerting high amounts of energy in the heat raises your body temperature, making you more at risk for heat exhaustion and stroke.  Make sure to drink lots of water, wear breathable clothing and have healthy snacks to fuel your body.
  5. Take a vacation to prevent burnout.  Reduced productivity, exhaustion and decreased engagement are all symptoms of burnout.  Taking time away from your work responsibilities to get your mind and body in check is essential to keep up work performance and overall health.