A while back, my parents and I had a conversation about long-term care (LTC) insurance. Talking about the possibility of one or both of them needing this kind of care wasn’t fun for any of us, but that made it no less important.
It’s one of those decisions many people put off until they urgently need it. Unfortunately, with LTC insurance, waiting too long can make a policy significantly more expensive or even unavailable. Determining whether LTC insurance is right for you isn’t simple. There’s no one-size-fits-all answer. When evaluating it, several key factors must be considered. For example, what is your family’s health history? Do you have close relatives who’ve experienced Alzheimer’s, Parkinson’s, or strokes? If so, you may be at increased risk, and LTC coverage could be a wise move. Another major consideration is your financial situation. LTC insurance isn’t cheap, and it typically becomes more costly as you age. You must weigh whether you can afford the premiums now, and whether you’ll still be able to afford them when you’re most likely to need care. At the same time, consider the alternative: potentially paying $50,000–$100,000 per year out of pocket for care, something that can quickly erode savings and retirement assets leaving a healthy spouse high and dry. You should also examine your support system. Do you have family members who are willing and able to provide care? And what are your intentions regarding leaving an inheritance to a surviving spouse or children? These and many other questions should be addressed before making a decision about purchasing LTC insurance. But even after obtaining a policy, many people don’t realize that coverage isn’t static. Insurance companies are likely to present you with new options throughout the life of your policy as an alternative to increased premiums. For instance, due to rising claims and an aging population, many insurers offer a buyout option, where the insurance company pays you a lump sum to cancel the policy, or may propose benefit reductions, which keep your premiums steady but reduce inflation protection or daily benefit amounts. While these alternatives to rate increases might seem like an opportunity to save money or simplify your financial plan, they can have major long-term consequences. Accepting a buyout or reducing coverage may leave you underinsured in your later years. On the other hand, accepting continued premium increases might make the policy unaffordable just when you need it most. That’s why, whether you’re purchasing your first policy or reevaluating an existing one, it’s critical to work with a fiduciary, someone legally required to act in your best interest. A fiduciary can help assess not only your current circumstances, but also your evolving financial needs and goals, to ensure your coverage remains aligned with your overall plan. In my parents’ case, we ultimately decided that LTC insurance wasn’t the right fit for them at this time. But for many, it isn’t just a good idea, it’s essential. If you’d like help determining if LTC is right for you, or if you already have a policy and need help navigating the range of options your provider is offering, we’re here to help. At Stewardship Capital, we work as fiduciaries to provide honest, objective advice so you can make informed, confident decisions that are right for you and your loved ones. (Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)
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Many years ago, I had a conversation with a coworker that has stuck with me ever since. They had just purchased a brand-new truck that cost nearly twice their annual salary, all while still living with their grandparents. I questioned the wisdom of that choice, and their response was something I’ll never forget: “You can live in your car, but you can’t drive your house.”
I couldn’t argue with the logic, at least as a factual statement, but it struck me as both a shortsighted and unwise viewpoint. I said no more and never offered them financial advice again. While that may be an extreme example of misplaced priorities, many of us fall into similar traps in our own financial lives. In her landmark book A Framework for Understanding Poverty, Ruby Payne describes what she calls the “hidden rules among classes,” including how people in different economic groups tend to view money. According to Payne, those living in poverty often see money as something to be spent immediately, either to meet urgent needs or to provide joy in the moment. The middle class tends to see money as something to be managed carefully so it doesn’t run out. The wealthy, however, see money as a tool to be grown, and ultimately passed down to future generations. If I had to guess, most readers of this column probably identify as middle class. And that raises an important question: what are the things we spend money on that actually shrink in value rather than progressing us toward greater wealth? Vehicles are probably the biggest and most common culprits. AutoNation USA reports that the average new car loses 20–30% of its value in the first year and up to 60% in the first five years. Boats, ATVs, and other motor vehicles follow similar patterns of steep depreciation. Electronics are another money pit. Smartphones, tablets, and computers can lose 30–50% of their resale value almost instantly when a new model hits the market. Televisions and home electronics often lose more than half their value in just a few years as technology improves, and production costs fall. Then there’s clothing, another area where our money evaporates quickly. Aside from a few rare, collectible brands, most apparel loses almost all its value the moment you take off the tags. If you doubt that, visit a thrift shop and see the high-end suits and shirts selling for just a few dollars each. Of course, not all consumer goods are destined to lose value. Some hold their worth surprisingly well. Professional-grade musical instruments like Steinway pianos, Gibson guitars, and Stradivarius violins are examples of purchases that can appreciate over time if properly cared for. Firearms also tend to retain value, particularly those from established makers or that are no longer in production. And as one might expect, high-quality jewelry with rare gemstones or precious metals often appreciate, especially when connected to sought-after brands. The lesson is simple: while spending money on depreciating items may bring short-term satisfaction, it rarely builds long-term wealth. If our goal is to strengthen our financial footing, and perhaps even leave a legacy to our kids or grandkids, the wiser path is to focus our spending less on the things that lose value the moment we buy it, and more on the assets that grow in worth over time. (Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations)
Recently, MSN published a story by Ana T. Sola reporting a survey by Empower, a 401k provider, that most Americans now think age 58 should be the appropriate time to retire. I would say that the 1,001 responders undoubtedly included a high percentage of younger workers. From my own experience with clients and others is that most people in their 50’s or older say they plan to retire in their mid-60’s or older. Many admit they did not begin to save early enough in their working lives and are playing catch-up. However, a young couple amazed me with their willingness to start in earnest to prepare well for their future. In their early 20’s, he was already well aware of the power of compounding and the tax benefits of having a Roth IRA. One of the best explanations of a Roth versus a traditional IRA comes in a question: Would you rather be taxed on the acorns of an oak tree early on or on the full giant tree in a few decades? The next item of discussion was the Rule of 72. What? The number of years required for a dollar to double is the number produced by dividing the interest rate into 72. Thus using 9 for an assumed long term interest rate and 8 years for a doubling, any 22 year old will be shocked by seeing a $64 total in their 60’s. For each and every dollar saved in the Roth. I know of some high school students that are funding their Roth accounts from part-time jobs. My next encounter was a young Missourian of 58 years who actually did retire from a materials company last month. How did he do it, I asked? In his 20’s, he began saving 15 percent a year and stuck with it. He worked for the same company while a college student and began to receive its match of 4 percent. It was fantastic how fast the total of 19 percent grew during 39 years. So much for the money; but what are you going to do with an extra 40 hours a week? Those who retire successfully have a great reason—in their minds at least—to continue to live with a mind toward the future. In the last case, he has been wanting to volunteer in disaster relief efforts but work prevented that until now. Here he is in western North Carolina, helping build a new house for an older couple whose home and all their belongings floated down the river 11 months ago. We have an opportunity to try new things, study subjects of special interest at free or reduced rates, or volunteer at an animal shelter or one of dozens of worthy charities always in need of experienced help. Some of us will need to work part-time to remain engaged socially. Others I know are helping their children with providing childcare for their grandchildren. It certainly helps to keep your day job if you love what you do, but unfortunately many do not. That is a big part of my own reason not to retire. Plus it allows us to give more to our favorite charities than we would otherwise would be able. But retirement is not just about the money. Plan ahead to have money, but focus upon retiring to something, not just from something.  Editor's Note: We are pleased to welcome Stewardship Capital Financial Advisors as a new content contributor, sharing articles on financial planning and financial health.
This year has been a roller coaster for investors. From steep losses in the early months to meteoric gains since April, 2025 has tested investors’ nerves. With a positive swing of nearly 30% in the last six months, it’s easy to feel tempted to take on more risk with your investments. Wall Street trumpeting record highs, friends sharing big wins, and social media proposing “can’t-miss” stock tips. That fear of missing out (FOMO) often convinces investors to abandon their usual risk tolerance and buy at precisely the wrong moment. Morningstar’s latest “Mind the Gap” study shows investors earned, on average, 1.2% less per year than their funds over the past decade, mostly from buying after rallies and selling during declines. This “behavior gap” often reflects enthusiasm that builds late in bull markets, pushing some investors to take on extra risk just before valuations peak. Getting in late can also magnify losses when markets inevitably pull back. Many novice or risk-averse investors panic-sell after a drop, locking in losses and widening the gap between market returns and their own results. To stay disciplined, even when markets tempt you to chase gains, keep these principles in mind: First, stick to your risk profile. Your tolerance for risk doesn’t change as often as market headlines do. Constantly shifting from aggressive to conservative is a recipe for disappointment. Second, while reallocating your portfolio may make sense from time to time don’t chase. Successful investing is less about finding the hottest stock and more about avoiding the trap of arriving late and leaving early. Lastly, remove emotion from the investing process. A qualified investment manager can offer objective, level-headed advice and help you stay steady, whether you fear losses or missed gains. History shows that periods of euphoria and ill-advised aggressiveness, especially among do-it-yourself investors, often precede market pullbacks. It’s tempting to assume recent trends will continue, but markets rarely move in straight lines. The safest way to build lasting wealth is to follow a thoughtful strategy, keep your risk aligned with your true tolerance, and let patience—not emotions—guide your decisions. By resisting FOMO and focusing on discipline, you give yourself the best chance to weather volatility and capture the market’s long-term rewards. (Past performance is no guarantee of future results. The advice is general in nature and not intended for specific situations) Stewardship Capital is a Registered Investment Advisor Firm that focuses on building lasting relationships to help clients achieve their goals in life. For more information, visit www.stewcap.com.  by Lorne Meinershagen, Floyd, Meinershagen, & Co.  Nobody looks forward to estimated tax payments, but paying more than necessary is even worse. When freelancers and business owners miss or underestimate their tax liability, the IRS charges them interest and penalties.
The penalty for estimated tax underpayment is calculated and assessed separately for each payment period. Therefore, taxpayers may owe a penalty for a previous period even if they later pay enough estimated tax to make up for the previous underpayment. As a reminder, estimated tax is the method used to pay tax on income that is not subject to withholding. This income includes earnings from self-employment, interest, dividends, pensions and alimony. Estimated taxes are required when your total year-end liability is greater than $1,000. To avoid IRS penalties, most self-employed taxpayers must ensure all four estimated tax payments add up to the lesser of these two amounts:
Understanding your tax liability can be complicated, since you have to take into account fluctuating income, peak business seasons, planned equipment purchases, employee bonuses, new benefits plans and other variables that affect taxes. Tax experts recommend reassessing your finances in the third quarter before making the last two estimated payments for the year – due September 15, 2019, and January 15, 2020 – to gauge any income variations since your last payment or changes that could affect the amount of taxes you will owe for 2019. If your CPA or tax advisor has not contacted you about a tax-planning session, be proactive and schedule time to discuss how to minimize the amount of taxes you will owe on April 15. A good accountant can help you determine whether the best way to achieve your financial goals is to accelerate, defer or reduce your taxable income for this year. Keep these tips in mind as you prepare to make the last two estimated tax payments for 2019:
For expert advice on how to lower your tax liability in a free initial consultation, please contact Floyd, Meinershagen & Co. in Grain Valley at 816-847-0536, or visit www.floydmeinershagenandco.com to schedule an appointment.
Many taxpayers were surprised to learn they were getting a smaller refund than in prior years – or worse, that they owed money – when they filed their 2018 tax returns.
And while it may have seemed like they were getting back less money than they had in the past, most taxpayers actually paid less in taxes in 2018 than they did in 2017. That’s because the IRS updated the Federal withholding tax tables in January 2018 based upon tax cuts in the new tax law. The change effectively gave everyone their tax refunds early by withholding less from paychecks, which resulted in lower refunds at the end of the year. If you like getting a refund, you need to change your withholdings as soon as possible so you will have more paid in by the end of the year. Since it’s already June, however, remember you will only see half the impact of withholdings changes on your 2019 tax return. Keep in mind, too, that a refund means you have given the government an interest free-loan. That said, many taxpayers use their tax refund as a savings account, because they know they tend to spend the money they receive in their paychecks. There are other ways to save as well. Many employers offer other opportunities to transfer money to a savings account via payroll deduction, so you never see the money. And if you choose an interest-bearing savings account, your money will grow faster than if you “loan” it to the government on an interest-free basis. Be sure to consider all of your options for savings and adjust your withholdings accordingly. If you need to save more money, take action now one way or another. Change your Federal withholdings, or set up a payroll deduction to a savings or other account. Before you change your withholdings, consider consulting with a certified public accountant because every taxpayer’s situation is different. Here’s an example: If you receive paychecks biweekly (every two weeks) and asked your employer to deduct an additional $50 per paycheck, you would pay in an additional $1,300 over the course of a year. Put another way, you would increase your refund by the same amount: $1,300. But remember, you would only see half of that for your 2019 return, or approximately $650, since the year is half over. If you would like some help adjusting your payroll withholdings or learning how to maximize your earnings, please contact Lorne Meinershagen, CPA, at Floyd, Meinershagen & Co. (FMC): 816-847-0536 or [email protected].  by Daniel Strader, Vice President & Loan Officer, State Bank of Missouri The New Year holiday creates a feeling of starting fresh and encourages us to set new goals. While diets come to mind, setting new financial goals should be on the top of our lists. As you reflect on the past year, focus on your experiences – build on what worked and what didn’t – to shape this year’s money habits. Here are some ideas to consider as you set your financial goals for the New Year.
New Year, New Savings Account Think about what you want to save for the coming year and commit to opening a savings account to reach that goal, whether it’s creating an emergency fund or setting money aside for your kids’ future college tuition. There are many types of savings accounts available to save for both short term and long-term goals. A great tip is to decide on the type of savings account that will meet your goal and commit to depositing a set amount on a regular basis to get into the habit of saving. For example, if you open a basic savings account, deposit $25 every month and sign up for direct deposit or automatic withdrawals from your checking account to ensure that amount is saved. Once you’re comfortable with saving a small amount consistently, you can increase it. Pay Down That Old Debt in the New Year Confronting your debt and thinking about how to pay it off can be scary and overwhelming. Use the New Year to face your fears. Make a list of your debts, noting the monthly payment, current balance, and interest rate, and make a plan to start paying down the debts. Many experts recommend focusing on either debts with the highest interest rates or debts with the lowest balances to pay off. While you will likely save more money paying off debts with the highest interest rates, it may be faster to pay off the smallest balances first and seeing this progress may help keep you motivated. Whichever method you choose for paying down debt, start by adding a small amount to one of your current payments. For instance, if you are focusing on paying off a credit card with a minimum monthly payment of $100, add $25 to that amount to start (for a total monthly payment of $125). Once you are comfortable with that new amount, add more when you’re able and stay focused on the goal. Get Organized Keeping your finances organized will help you control your money and achieve your financial goals. Some basic tasks to help you get organized include making a budget, tracking your spending, and putting a system in place to ensure you pay your bills on time every month. Be sure to monitor your credit card and bank statements for any unexpected fees or unusual activity too. The sooner you find mistakes or unauthorized transactions, the easier it is to correct those issues. Like dealing with debt, organizing your finances can be daunting, so start small by picking one organizational task and focus on that task for one month before adding another. For example, you might start by making sure your bills are paid on time by setting up automatic bill pay from your bank account, giving yourself one month to learn about it, set it up, and get comfortable using it. Next month, focus on creating a budget, which gives you several weeks to learn about budgeting and working on it. Protect Your Money All Year, Every Year With so many financial transactions occurring electronically, it’s important to proactively protect your personal information, including your credit card and bank account numbers. Use the New Year to take charge of protecting your money. Never provide your personal information in response to an unsolicited request, whether it is over the phone or over the Internet. Always track your bank and credit card statements and your credit reports for unusual activity. Catching abnormal transactions early will allow you to take steps to prevent more harm if your information has been stolen. State Bank of Missouri is happy to offer several savings accounts to fit your new year money management goals. We also offer free online and mobile management services for saving and budgeting including our Mobile App for Android and Apple devices and the CardValet app for real-time debit card monitoring. Visit with a member of the State Bank of Missouri team today to learn more or online at www.gostatebank.com. Member FDIC |
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