All Posts in "Personal Finance/Consumers"

By Barbara Morrison

According to the Centers for Disease Control and Prevention (CDC), there are around 28,900 residential care and assisted living facilities in the U.S.. The majority of the facilities contribute greatly to the country’s social and economic fabric. However, despite the importance of these facilities in our society, they often struggle to find affordable financing to expand or improve their services.

Fortunately, the Small Business Administration (SBA) 504 loan program provides an affordable way to obtain funding for building or improving an assisted living facility. The SBA 504 program significantly reduces the amount assisted living facilities have to pay for a down payment and provides a long-term, below-market, fixed interest rate.

The loans enable a business owner to purchase, renovate, construct or refinance commercial real estate with only a 10 percent down payment. With the low down payment, businesses can retain precious working capital so that the company can continue to grow. Renovations, equipment, closing costs and soft costs can be financed as part of the total project cost, and the down payment is only 10 percent of that total.

SBA 504 loans are designed to solve important challenges. Recent Census data indicates there are around 76.4 million baby boomers in the United States. The first boomers were born in 1946, which means those 76 million-plua people are at or quickly approaching the age of 76 years old. As they  get older, they often need assisted-living arrangements to ensure a high quality of life. The SBA 504 loans provide business owners with access to the funding they require to own and manage facilities that help care for the nation’s aging population.

The  loan process streamlines funding and reduces the risk for lenders, as well as assisted-living facility owners.

The structure of an SBA 504 loan is designed to mitigate the risk associated with lending without limiting the amount of capital borrowers gain access to. Here’s how that’s done:

  • The loan can consist of two mortgages. The first mortgage is provided by a conventional lender, representing approximately 50 percent of the total project cost. The SBA 504 second mortgage, representing generally 40 percent of the total project cost, has a long term, up to 25 years, and fixed interest rate, fully amortized for the full term of the loan.
  • The rest of the funds come for the borrower as a down payment, meaning it is possible to borrow as much as 90 percent of the money needed, paying the remaining 10 percent out of pocket.
  • Monthly payments are fixed for the life of the loan, providing small business owners with affordable payments that enable them to control overhead costs for the long term. The interest rate is below-market and to the current market rate for five-year and 10-year U.S. Treasury notes, always being a certain amount above it.

To be eligible, an assisted living facility needs to:

 

Barbara Morrison is the founder and president of TMC Financing, which provides SBA commercial real estate financing. She’s a former mayor and City Council member for the city of Belvedere, Calif.

srmedia by — September 14, 2022 in Everything Else

The Tacoma Senior Living Tour has been on pause since the pandemic but is being brought back on Sept. 14.

Are you thinking about moving into a retirement community but don’t know where to start looking or what questions to ask? Between 2014 and 2019, five communities that hosted the tour (Eliseo, Franke Tobey Jones, Merrill Gardens, Narrows Glen, and Weatherly Inn) toured over 1,000 seniors just like you who had questions about senior living. The next tour is being held on Sept. 14 from 9:45 a.m. to 3 p.m. with these same communities, except Solstice Senior Living will replace Narrows Glen. All participants must show proof of COVID vaccination and wear a mask the entire tour, except  while eating.

“Most seniors attending the tour have never stepped inside a retirement community before,” says Christine Hall, senior director of marketing and public relations at Franke Tobey Jones. “When most people think about retirement communities, they conjure up all kinds of terrible images and smells from visiting their mom and grandma in a nursing home decades ago. Retirement living isn’t like that any more. Our communities are beautiful, vibrant, active, and offer wonderful chef-prepared meals, classes, trips, tours, and the opportunity to meet new friends and have fun.”

Each tour is very informative, and attendees walk away having learned a lot about living in a retirement community. You will receive an overview of each community, walk through common areas, and see actual apartments. You will also have the opportunity to taste the food at each community, compare prices, and ask questions in a friendly, relaxed environment.

“Seeing a community firsthand can make all the difference when picking the perfect fit,” says Monica Richardson, senior living advisor and social media director at the Weatherly Inn.  “The attendees walk away at the end of the day with a totally different perspective than what they started with at the beginning of the day.  To note, there is a lot of walking on the tour, so wear comfortable clothing and shoes.”

Your questions might include:

  • What is the monthly rent and what does it cover?
  • Is your community pet-friendly? Does it cost more to have a pet?
  • Can I move in now or is there a waiting list?
  • What is a “buy-in,” and is there one?
  • What’s the difference between assisted living and memory care? Or memory care and skilled nursing?
  • What is the highest level of care that you offer?
  • Do you offer therapy? If so, what kinds?
  • What happens if my spouse needs memory care and I don’t? Can we still live in your community?
  • What happens to my apartment if I need to go to skilled nursing or rehab for a period of time?

The vans fill up very fast and seats are limited, so you must RSVP by Sept. 9 by calling 253-320-4216  to reserve a seat on one of the community vans. Or, if you’d like to drive yourself, please still RSVP so the organizers have a good head count for food, brochures, and so on. Compare the possibilities at each community.

The program is as follows:

9:45 a.m. Start at one of the five communities. Hear a short presentation about the communities and about the day’s activities. Tour that community.

11 a.m. to 3 p.m. Get aboard the community van or drive in your own car and go to the next community. Each van will have a representative from that community to answer questions. Each van will stop at all five locations, or drive yourself and visit the communities you choose. Tour ends. We’ll get you back to your starting community.

“At the end of each of the previous tours, the participants were hugging us, thanking us and so appreciative of all the information,” says Hall. “It’s really gratifying knowing that we are providing information and options that will help them make an informed decision about moving to a senior living community.”

Senior living communities have been very busy this year with a lot of pent-up demand. Even if you are a few years out from moving to a senior living community, it’s a good time to tour and get your name on a waiting list so when you are ready, your favorite community will have an apartment available for you.

For more information or to RSVP, call 253-320-4216 by Sept. 9. Transportation services are limited, so RSVP today.

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srmedia by — September 1, 2022 in Personal Finance/Consumers

By Darius Godlewski

Many people look forward to retirement and all the enjoyment it can bring after having worked so hard for decades. But from a distance, whether a few years or many years away from retirement, it’s not easy to clearly see what retirement will look like.

It’s a bit misty because, after all, there is a lot of uncertainty about the future, and how much money someone will need during retirement and have on hand is subject to numerous variables. But in the process of looking ahead, some people miscalculate, in part because they are not fully informed. Some of the things people assume to be true about money matters in retirement actually aren’t, and some financial points they think they grasp instead require a deeper dive. Misconceptions can develop, and those can be harmful to retirement and the enjoyment of it.

There are three key areas where myths and misconceptions can cost you in retirement:

Taxes.

One of the biggest misconceptions people have is that they will pay less in taxes in retirement. For one thing, they won’t have many deductions any more. If they were itemizing, a lot of those deductions go away. Most of the money Americans have is in tax-deferred accounts such as IRAs and 401(k)s, and they’re going to pay taxes on those distributions. Therefore, they need to strategize to lower their tax bill in future.

One strategy is doing partial Roth conversions on IRAs and 401(k)s. Roth IRAs offer tax-free growth on both the contributions and the earnings that accrue over the years, and the other big benefit in retirement is you won’t pay taxes when you take the money out. When current tax rates are relatively low, it’s a good window of opportunity to partially convert to a Roth.

Tax diversification also is important – having a portion in taxable accounts, another amount in tax-free accounts, and some in tax-deferred accounts.

Asset diversification.

Proper diversification across non-correlated asset classes is the key to protection from too much volatility in the markets. A non-correlated asset is an asset whose value isn’t tied to larger fluctuations in the traditional markets. Many people think they are very diversified because they have different stocks and mutual funds, but stocks and mutual funds are just one asset class. Non-correlated assets such as real estate, commodities, and municipal bonds can help you diversify.

Annuities.

They all sound similar but they all work differently. Some have high fees, some have low fees. Some are safe, some have risk. Annuities can get complicated, and it’s wise to have a fiduciary explain the differences

Annuities supplement other retirement income, such as Social Security and pensions. Fixed annuities make sense for people who don’t want much risk. An insurance company guarantees a specific payment by a certain date, and in the interim the insurer invests in safe vehicles such as highly-rated corporate bonds and U.S. Treasury securities. In a variable annuity, more risk is involved as investors aim for bigger profits. The insurer invests in a portfolio of mutual funds, which are chosen by the buyer.

Misconceptions about some financial elements of retirement can lead you down the wrong path and bring stress at a time you’re supposed to be relaxing. Gain the knowledge you need to bring clarity to your plan and the enjoyment you deserve.

 

Darius Godlewski is the president of Financial Wealth Alliance and a licensed investment adviser representative with Brookstone Capital Management.

srmedia by — August 17, 2022 in Personal Finance/Consumers
Why (or why not) people actually do estate planning

While a majority of people acknowledge the importance of estate planning, a small percentage actually follow through on it.

According a New York Times survey, nearly 9 out of 10 U.S. adults are concerned about inflation. This fear of inflation plays a critical role in how people perceive their own finances, causing them to believe their savings are worth much less. It often leads to people postponing or even abandoning the idea of estate planning.

“Inflation can have significant impacts on one’s ability to save for their own future,” said Patrick Hicks, general counsel at Trust & Will, an estate-planning advisor. “The current and potential financial strains amid the COVID-19 pandemic and ongoing economic uncertainties have compelled many people to think they don’t have enough valuable assets to leave behind. A natural reaction during times of economic uncertainty is to look for ways to reduce costs by cutting unnecessary expenses. Unfortunately, it is a common mistake to focus too narrowly on the short term and overlook the importance of estate planning for the long-term future.”

While this sentiment about estate planning is understandable, the mentality may have long-term and costly consequences, Hicks advised.

“Estate planning isn’t just for the rich, and it’s about far more than the value of your assets,” he said. “Even if you don’t have an expensive home, a large IRA, and other valuable assets to pass on, you can still benefit from creating a will or living trust. There is no minimum level of wealth required to have an estate plan, and every adult should look to have a basic plan in place to care for their own needs and the needs of their family.”

To help shed light on the importance of estate planning and the processes involved, Caring.com, an online source of information about products and services for older adults, partnered with YouGov, a market researcher, to survey 2,600-plus American adults on who’s engaging in estate planning–and why or why not. Since 2015, Caring.com has conducted annual surveys to raise awareness about estate planning – especially to people who may not know how to create a will. The 2022 survey found that 50 percent more young adults (18-34 year-olds) now have estate planning documents than before the pandemic – but many others are still putting it off. Besides procrastination, a chief reason why is a perceived lack of assets – 1 out 3 people without a will say they don’t have enough wealth to leave behind. Another key factor to consider is the impact of COVID-19 on estate planning. We found that those who’ve personally had a serious case of COVID-19 are 66 percent more likely to engage in estate planning than those who haven’t.

Age plays a significant role in the conversation about estate planning. According to the survey, 41 percent of 18 to 34 haven’t talked to anyone about getting estate planning documents, and 1 out of 3 in the 35 to 54 age range has yet to start the conversation about estate planning. Meanwhile, 3 out of 4 older adults have discussed getting a will.

Although 56% of Americans think having a will is important, only 1 in 3 actually has an estate planning document. Furthermore, 60% of those without a will said they hadn’t taken any action towards getting a will, living trust, or any estate planning document.

Our research shows that talking with a loved one is the most likely first step, as 1 in 5 of those without a will have had a conversation with a loved one about it, while only 1 in 10 has started researching online.

63% of American adults believe that you should have estate planning documents by the time you’re 55 or earlier, but only 45% of those in the 55+ age group actually have estate planning documents. Again, this shows a serious disconnect between people’s beliefs and behaviors regarding estate planning.

 

Source: Caring.com

srmedia by — July 27, 2022 in Personal Finance/Consumers