by NFS | May 16, 2012 | Archives
What Is a Charitable Gift?
A charitable gift is a donation of cash or other property to, or for theinterest of, a charitable organization. The gift is freely given withthe primary intention of benefiting the charity.
Whether given during lifetime or after death, charitable gifts are eligible for a tax deduction, but only if made to a qualified charitable organization.For example, you may have a relative who has fallen on hard times,someone you choose to help with gifts of cash. While you may bemotivated by charitable intentions in making these gifts, you cannotdeduct them for either income tax or estate tax purposes.
In general, qualified charitable organizationsinclude churches, temples, synagogues, mosques and other religious organizations, colleges and other nonprofit educational organizations,museums, nonprofit hospitals, and public parks and recreation areas.Gifts to these types of organizations qualify for a federal income taxdeduction if made during your lifetime or, if made after your death,can be deducted from the value of your estate for federal estate taxpurposes.
Why Consider a Charitable Gift?
People give to charities for a variety of reasons. They give:
- Because they have compassion for the less fortunate.
- From a belief that they owe something back to society.
- To support a favored institution or cause.
- For the recognition attained by making substantial charitable donations.
- To benefit from the financial incentives our tax system provides for charitable gifts.
To view the complete NFS Estate Ideas Newsletter for May 2012, click here.
by NFS | May 14, 2012 | Archives
Why are soap operas so riveting? Is it because the characters are larger than life and always, always live in a really big, fancy house, regardless of their profession or income? Or, maybe it’s due to the fact that despite everything being over the top—from the plot to hairdos—there is a kernel of truth in these stories … something that resonates with us. That’s why I think “All My Paychecks” will resonate with you. Indulge in a few minutes of guilty pleasure and watch (all three episodes!). Then let us know what you think.
by NFS | May 9, 2012 | Archives
Decades ago, the traditional family unit consisted of a husband and wife with 2.5 children. Most women were stay-at-home mothers, able to call on extended family members in case illness or injury affected their abilities to care for their children.
But these days, there is no longer a “traditional” family unit (and by extension, an extended support network), as the following figures attest:
- In 2010, 43.6% of all U.S. residents 18 and older were unmarried—more than half of them women—while the elderly comprised 16.5% of all unmarried and single people 18 and older.
- 45% of households nationwide were maintained by unmarried men or women, while number of single parents living with their children in 2010 reached 11.7 million. (Almost a third of grandparents are raising their grandchildren.)
- There were 6.5 million unmarried-partner households, which included 581,300 same-sex couples.
- Finally, the number of people who lived alone totaled 31.4 million in 2010, comprising 27% of all households—up from 17% in 1970.
What does this mean to you? Well, if you fall into one of the above categories—a single parent or grandparent raising a child, an adult living alone, or an unmarried couple—you need to do a little “worst case scenario” thinking. Specifically: should you experience an illness or injury that results in a disability (temporary or permanent), what type of impact will that have not only on your finances, but also on anyone who depends on you?
During Disability Insurance Awareness Month, educate yourself about the reality of the impact a disability can have on your budget—and your life.
Disability coverage facts
If you think you have your bases covered with health insurance, worker’s compensation or Social Security, the following information might change your mind.
- While health insurance will cover medical-related expenses, it won’t provide an income to cover your needs if you are unable to work even for a relatively short period of time.
- Worker’s compensation coverage only comes into play if the disability is job-related—which only happens in about 5% of the cases, according to the Council for Disability Awareness. (If you’re playing the odds, you might want to reconsider, since 30% of those entering the workforce today will be disabled for three months or more during their career, with the average long-term disability claim lasts 31.2 months.)
- While Social Security provides coverage, qualifying for benefits can be challenging (60% are initially denied) and, at a little over $1,100 a month, the average monthly payment is barely above poverty level.
In the meantime, bills keep mounting up and your financial situation becomes even more precarious. According to one study, more than 62% of bankruptcies in 2007 were due to medical issues—a significant increase from the 2001 figure of 46.2%.
Fortunately, you do have several options to help safeguard yourself and those who depend on you. Employer-sponsored coverage (short-term disability insurance, long-term disability insurance, or both) can replace a significant percentage of your income—possibly up to 40% to 60% of your pre-tax income. (In a few states, employees can also purchase additional short-term disability coverage on their own, paid for through payroll deductions.)
If you are self-employed or want a stronger safety net, an individual disability insurance policy is the best choice. Start by calculating the amount of income you would need to maintain your current standard of living in the event you’re unable to work. Then, look at your life and work situation. Do you have children, a spouse or an elderly relative who depends on you for support? Is there a cap on the benefits available through your employer—and are you getting close to that level? Finally, has your standard of living increased or you have taken on a significant amount of new debt?
Once you have a clearer picture of your “worst case scenario,” schedule a meeting with your insurance advisor to review your disability insurance purchase options: through your employer, a professional organization or on your own. This will help you make the best decision for your budget, your future and those who are part of your “family unit.” For more disability information, visit www.protectyourpaycheck.org.
–Jaimee Niles, VP of Communications, LIFE Foundation
by NFS | May 7, 2012 | Archives
You’ve just become disabled, but you’re not worried. Why? Because you think Social Security disability payments will “take care of you.” Really? According to statistics from the Social Security Administration, the average person who has qualified for Social Security benefits receives $1,125.10 a month.
If you’re making $50,000 per year, how long could you (and your family) survive on a disability payment of $1,125.10 per month? That’s only $13,501 per year, or 27% of your income. This assumes you qualify for benefits, and not everybody does. And if you do, it may still be more than two years—yes, years— before you start to receive any payments. What will you do in the meantime?
It’s time for you to protect your paycheck.
What am I talking about? You protect your home by insuring it against loss. You do the same for your car, boat, motorcycle, RV and personal property, but have you insured your paycheck?
Yes, I am talking about disability insurance. You protect your worldly goods with insurance, and you also need to protect your income against loss. If you become ill or injured and are unable to work, disability insurance pays you a percentage of your income until you can return to work.
May is Disability Insurance Awareness Month, the perfect time to talk to us and learn how to protect your paycheck.
-Marvin H. Feldman, CLU, ChFC, RFC, President and CEO of the LIFE Foundation
