Small nest egg, big dreams? Tips for buying your retirement home

(BPT) – Planning for retirement means making a lot of decisions, including when you’ll stop working, how much you’ll withdraw from your savings each year, and where you’ll live. Many Americans view retirement as an opportunity to move into a house they’ll love and live in for all their golden years. In fact, 64 percent of retirees either have moved or plan to move, according to a Merrill Lynch survey.

Some retirees move to be closer to children or grandchildren, to down-size into a more manageable home, live in a warmer locale, or to secure a more luxurious home where they can easily age in place.

“The decision of where to live in retirement is important and can directly affect quality of life in your golden years,” says Geoff Lewis, President of RE/MAX, LLC. “Research by Trulia shows that in virtually all areas of the country, it makes better financial sense for retirees to buy a home, rather than rent. In fact, buying is nearly 42 percent cheaper than renting for seniors across the country.”

With offices in more countries than any other real estate brand, RE/MAX agents have helped millions, including retirees, find the home of their dreams. Lewis and the RE/MAX team offer some advice for buying your retirement home:

Have a plan

Ideally, you should think about where you want to live long before retirement, but it’s never too late to think about your priorities. Do you want to be close to family or health care resources? Do you desire a home in the mountains or somewhere you’ll never see snow again?

Trulia’s research shows that some of the cities most popular for retirees are also ones where buying a home can save you the most money over renting. Desirable, warm-weather locations in Florida and Arizona offer significant value, even in regions where average home prices are higher.

Make a list of what you want in a home location so you’ll have a starting point for your search.

Don’t delay

If possible, don’t wait until poor health or declining finances force you to move somewhere that’s not your ideal location. Move while you’re still young enough to enjoy your dream retirement home.

Get professional financial advice

It’s important to protect your nest egg and keep it growing throughout retirement. A professional financial planner can help you understand what size mortgage is right for you, so your dream home doesn’t strain your finances.

Be mindful of amenities

When choosing a location and a home, in addition to your personal priorities, it’s important to keep in mind accessibility to amenities important to seniors. Community features such as good transportation, quality of roads, safe neighborhoods, and access to health care, socialization opportunities, shopping and cultural venues are all options to consider.

Rely on real estate pros

Once you know where you want to be, it’s time to find a real estate agent. Well-versed on local real estate trends, RE/MAX agents can help retirees sell their current home so they can make the purchase of their dream retirement home a reality. Visit www.remax.com to search for an agent.

Focus on must-haves

Make a list of must-have features and those you would like your retirement home to have. Share the list with your agent to help him or her focus on properties that meet your criteria. Your list of must-haves and desirables will likely be very different from the list you made when you bought your first home. Now, a single-level house with large bathrooms and a level lot may be more desirable than a two-story with lots of bedrooms and a big backyard.

Finally, says Lewis, keep in mind whether you plan to age in place. “More Americans are looking for homes that will allow them to stay independent and living on their own throughout their retirement years,” he says. “If that’s your plan, look for home features that will help facilitate that, like wider doors, few or no exterior stairs, and good lighting.”

Read more

Tax tips for extension filers with investments

(BPT) – It’s a common misconception that if you have investments you need to shell out a large chunk of change to have your taxes prepared by an accounting genius. The truth is, it’s easy and affordable to do your own taxes and maximize tax savings — even if you’re an investor.

“First and foremost, gather all of your tax forms and financial information before you get to work on your return. It will save you time when you prepare your return and the process will be much easier,” says Mark Jaeger, director of tax development for online tax preparation software provider TaxAct. “In addition to tax forms from brokerages, employers and financial institutions, you’ll also want to have all documentation about your transactions readily available. That information will help prevent you from overpaying or underpaying taxes on your investments.”

Many DIY tax preparation solutions import transactions directly from brokerages or provided data files. TaxAct, for example, offers electronic import for most common tax forms including W-2 (Wage and Tax Statement), 1099-B (broker transactions), 1099-INT (interest income), 1099-OID (Original Issue Discount), 1099-DIV (dividend income) and 1099-R (retirement income).

However, if you have hundreds or thousands of transactions and you can’t electronically import the related brokerage statements, Jaeger recommends entering your total short- and long-term gains on Form 8949, Sales and Other Dispositions of Capital Assets. Then, you’ll simply attach the statements that list your transactions individually when you e-file your return.

The following helpful tips from TaxAct can help you save time and money when you prepare your tax return this year.

1. Don’t rely solely on your Form 1099s.

Verify the information shown on your Form 1099-Bs aligns with your records. It is a good idea to review cost basis and date acquired. Whether that information is included on your form depends on where the investment originated and how long you’ve held the asset.

Keep in mind even if you don’t see your cost basis and acquisition date on your Form 1099-B, you still have to report that information on your tax return. Without it, any sales proceeds without a cost basis will be taxed as a capital gain.

If you’re still waiting for 1099s or other investment information, Jaeger recommends preparing as much of your return as possible now, but wait to file until you receive it to avoid amending your return.

2. Make sure you report the correct cost basis.

The cost basis is the purchase price of an asset adjusted for stock splits, dividends, return of capital distributions and any other basis adjustments. It is important to use the correct cost basis to accurately report and calculate a capital gain versus a loss, the difference between the asset’s sales proceeds and the cost basis.

Even if your cost basis is reported on Form 1099-B, it is a good idea to check your investment records to verify it’s correct. The cost basis reported on your Form 1099-B is based on the information available to your brokerage, which may not include data needed to calculate the true cost basis. For example, the sale of certain employer stock options may be reported on your Form W-2 and Form 1099-B. If you don’t adjust your cost basis to account for this, your sale may be taxed as ordinary income and as a capital gain.

If you need to report adjustments to cost basis amounts on your tax return, you’ll include the adjusted amounts and an adjustment code next to each that explains the reason for the change.

3. Short- and long-term gains: Make sure you know the difference.

Assets held for more than 12 months are considered long-term and benefit from reduced capital gains tax rates of zero, 15 and 20 percent based on your tax bracket. On the other hand, short-term gains for assets held for less than 12 months are taxed at ordinary rates.

Verify the asset’s purchase date before selecting the short-term or long-term reporting category for the transaction on your tax return. Remember, the date acquired may not be on Form 1099-B. Incorrectly reporting the term may result in overstating or understating your total tax liability.

For future investments, you may want to consider waiting to sell assets with large gains or holding periods approaching one year. For more investment tax tips visit www.irs.gov. To learn how you can easily and affordably file your own return with TaxAct, visit www.taxact.com.

Read more

3 tax hints every investor should know

(BPT) – It’s a common misconception that if you have investments you need to shell out a large chunk of change to have your taxes prepared by an accounting genius. The truth is, it’s easy and affordable to do your own taxes and maximize tax savings — even if you’re an investor.

“First and foremost, gather all of your tax forms and financial information before you get to work on your return. It will save you time when you prepare your return and the process will be much easier,” says Mark Jaeger, director of tax development for online tax preparation software provider TaxAct. “In addition to tax forms from brokerages, employers and financial institutions, you’ll also want to have all documentation about your transactions readily available. That information will help prevent you from overpaying or underpaying taxes on your investments.”

Many DIY tax preparation solutions import transactions directly from brokerages or provided data files. TaxAct, for example, offers electronic import for most common tax forms including W-2 (Wage and Tax Statement), 1099-B (broker transactions), 1099-INT (interest income), 1099-OID (Original Issue Discount), 1099-DIV (dividend income) and 1099-R (retirement income).

However, if you have hundreds or thousands of transactions and you can’t electronically import the related brokerage statements, Jaeger recommends entering your total short- and long-term gains on Form 8949, Sales and Other Dispositions of Capital Assets. Then, you’ll simply attach the statements that list your transactions individually when you e-file your return.

The following helpful tips from TaxAct can help you save time and money when you prepare your tax return this year.

1. Don’t rely solely on your Form 1099s.

Verify the information shown on your Form 1099-Bs aligns with your records. It is a good idea to review cost basis and date acquired. Whether that information is included on your form depends on where the investment originated and how long you’ve held the asset.

Keep in mind even if you don’t see your cost basis and acquisition date on your Form 1099-B, you still have to report that information on your tax return. Without it, any sales proceeds without a cost basis will be taxed as a capital gain.

If you’re still waiting for 1099s or other investment information, Jaeger recommends preparing as much of your return as possible now, but wait to file until you receive it to avoid amending your return.

2. Make sure you report the correct cost basis.

The cost basis is the purchase price of an asset adjusted for stock splits, dividends, return of capital distributions and any other basis adjustments. It is important to use the correct cost basis to accurately report and calculate a capital gain versus a loss, the difference between the asset’s sales proceeds and the cost basis.

Even if your cost basis is reported on Form 1099-B, it is a good idea to check your investment records to verify it’s correct. The cost basis reported on your Form 1099-B is based on the information available to your brokerage, which may not include data needed to calculate the true cost basis. For example, the sale of certain employer stock options may be reported on your Form W-2 and Form 1099-B. If you don’t adjust your cost basis to account for this, your sale may be taxed as ordinary income and as a capital gain.

If you need to report adjustments to cost basis amounts on your tax return, you’ll include the adjusted amounts and an adjustment code next to each that explains the reason for the change.

3. Short- and long-term gains: Make sure you know the difference.

Assets held for more than 12 months are considered long-term and benefit from reduced capital gains tax rates of zero, 15 and 20 percent based on your tax bracket. On the other hand, short-term gains for assets held for less than 12 months are taxed at ordinary rates.

Verify the asset’s purchase date before selecting the short-term or long-term reporting category for the transaction on your tax return. Remember, the date acquired may not be on Form 1099-B. Incorrectly reporting the term may result in overstating or understating your total tax liability.

For future investments, you may want to consider waiting to sell assets with large gains or holding periods approaching one year. For more investment tax tips visit www.irs.gov. To learn how you can easily and affordably file your own return with TaxAct, visit www.taxact.com.

Read more

The lowdown on low down payment mortgage

(BPT) – You would like to buy, but you can’t manage that 20 percent down payment. Does this sound familiar?

The down payment is the biggest impediment to buying a home according to surveys, but in reality many individuals can qualify for a mortgage with as little as 3 percent down.

It is important to compare loans and do the math. Consider your closing costs (the cash you need in-hand), the monthly mortgage payment, and if that payment will go down or up in a few years. Paying a few more dollars each month in the beginning can sometimes save borrowers money in the long term.

For this exercise, we compare a $234,900 home purchase (the national median home price as of December 2016), with a 5 percent down payment and a 720 FICO score. And because calculators and loan terms vary, consider these costs as examples only. A mortgage professional can provide you with specific estimates.

Conventional loan with PMI

A conventional loan is a traditional mortgage from a lender that is not insured by a government agency. With a 5 percent down payment, the borrower finances the remaining 95 percent over 30 years with a 4 percent interest rate. Private mortgage insurance (PMI) is required because of the low down payment and is $78 of the monthly bill, making the total monthly mortgage payment $1,143.

Pros: A borrower can get a conventional loan with PMI with as little as 3 percent down. PMI can be cancelled once 20 percent equity in the home value is reached, which means your monthly bill decreases.

Cons: For some borrowers, a 5 percent versus 3 percent down payment may be a better deal as costs may be lower. However, for many prospective homebuyers looking to lock in low interest rates, build equity and home appreciation faster, an option to get into a home with the lower down payment may be better.

A combo loan (aka piggyback mortgage)

A piggyback involves two separate loans simultaneously. In this scenario, the first “primary” mortgage covers 80 percent of the loan with a 30-year fixed interest rate of 4 percent; the second loan is for 15 percent with 10-year fixed interest rate of 5 percent; and the remaining 5 percent is the down payment. The total monthly mortgage payment would be $1,271.

Pros: The borrower will not pay PMI.

Cons: It may be a more expensive as the borrower will pay closing costs on two loans. And unlike PMI, the piggyback loan doesn’t cancel, but will be paid off over the term of the mortgage. The second loan often comes with higher interest rates too.

FHA loans

FHA loans are mortgages insured by the government through the Federal Housing Administration. The limits for FHA loans typically are lower than conventional mortgages. However, FHA mortgage insurance cannot be cancelled and must be paid for the life of the loan. FHA has other specific requirements, like the condition of the home. In this scenario, the mortgage is set at 95 percent of the home’s value with a 30 year fixed interest rate of 3.75 percent. The total monthly mortgage payment would be $1,199.08.

Pros: A borrower can get a FHA loan with as little as 3.5 percent down and a FICO score as low as 600 may qualify.

Cons: FHA mortgage insurance cannot be canceled, so your monthly bill won’t be reduced the way it is with a conventional loan with PMI. Also, FHA loans are subject to an upfront fee of 1.75 percent that is financed over the life of the loan.

No matter what you choose, do the math and compare so you can make an informed decision. If the conventional option sounds appealing, LowDownPaymentFacts.com provides more information.

Read more

4 tips to help protect your identity this tax season

(BPT) – Tax season is a busy time for everyone. From accountants and small business owners to families and individuals, especially as more people choose to file their taxes themselves. Unfortunately, it’s also a busy time of year for cybercriminals who use the flurry of activity to swindle sensitive personal information from unsuspecting victims.

In fact, the Norton Cyber Security Insights Reports revealed that online crime has become so prolific, 36 percent of U.S. consumers believe it’s only a matter of time before a criminal steals their identity.

Take for example, Melissa, a marketing manager from Chandler, Arizona, who last year received an alert from her online tax filing service that her account password had been changed. But she dismissed the notification as a mistake.

“Two days later I got an alert from LifeLock about a credit card that I hadn’t opened.”

Thinking this was strange, Melissa followed up with her tax filing service and found that a criminal had accessed her account, stolen enough personal information to open a credit account in her name and redirected her tax return to another account.

Fortunately, Melissa was able to resolve her case but she is just one of a staggering number of individuals who’ve fallen victim to criminals lurking the web. According to research from Symantec, cybercriminals launched more than 1 million web attacks against internet users every day in 2015. While this statistic may seem shocking, there are things you can do to help protect yourself and your identity from cybercriminals.

Start by applying these four simple tips to keep your personal information away from cybercriminals this tax season:

1. File your taxes as early as possible. The sooner you file your taxes, the harder it will be for criminals to file taxes on your behalf for a refund, which a thief can do with only your date of birth and Social Security Number. (And don’t think this information is difficult to find, it could already be for sale on the Dark Web if you were impacted by a data breach.) If you want some extra protection this tax season, consider contacting the IRS to see if you’re eligible for an Identity Protection PIN. It’s a six-digit code that is assigned to you by the IRS to help prevent misuse of your SSN on fraudulent federal income tax returns.

2. If you’re filing your taxes online, use a secure Wi-Fi connection or a Virtual Private Network (VPN). One of the best ways you can help protect yourself when e-filing is to use a secure internet connection and not a public Wi-Fi network. If you are not sure about the security of your internet connection, use a VPN – an easy-to-use technology that ensures a secure connection.

3. Remember the Internal Revenue Service (IRS) only communicates through the United States Postal Service. They will never request personal and/or financial information through email, text messages or social media sites. If you receive a letter in the mail and you’re not sure if it’s legitimate, use the IRS lookup tool to find your letter: www.irs.gov/individuals/irs-notice-or-letter-for-individual-filers

4. If you receive a phone call from someone claiming to be from the IRS, ask for their name, badge number and call back number. Report the call to the U.S. Treasury Inspector General for Tax Administration (TIGTA) at 1-800-366-4484 and provide this information to confirm the authenticity of the caller’s request. If the caller isn’t willing to provide this information, hang up and report the incident to the IRS.

If you believe you’ve been the victim of an IRS scam, you may also report this to the TIGTA at their website: www.treasury.gov/tigta/contact_report_scam.shtml. Don’t delay in doing so. After all, it’s your identity and it is up to you to protect it every single day.

Read more

5 fast shortcuts to make your home sparkle this spring

(BPT) – We all know that one person who just adores cleaning. But for the rest of us, it’s a necessary evil that gets old very quickly!

Before you tackle that long list of spring cleaning tasks, try some of these cleaning hacks designed to make these chores faster and easier. When cleaning is fun and even effortless, you’ll feel more energized and gain the momentum you need to knock out your list of chores. Afterward, your house will sparkle from top to bottom, which is its own reward!

1. Find smarter tools

Throw out the messy bucket and mop and reach for a smarter floor solution that’s efficient and fun to use. For example, the O-Cedar EasyWring Spin Mop & Bucket System has a built-in wringer that offers superior moisture control of the mop, which makes it safe and easy to use on all hard floor surfaces — even hardwood! The hands-free wringer requires a simple press of the foot pedal to easily spin out the water and help finish the job with less mess and faster drying times.

2. Try natural solutions

Commercial cleaning solutions can add extra costs to your deep cleaning session, not to mention the harsh chemicals can leave behind unpleasant odors. Why not experiment with everyday pantry items? These often cost less and are just as effective in their cleaning power.

A simple solution of warm water and vinegar removes built-up grime from your floors, while leaving a clean, rinse-free finish. Just add a half cup of distilled white vinegar to a gallon of warm water and start mopping.

If you dislike the smell of vinegar, add a couple drops of your favorite essential oil — the fresh scent will be like a small reward!

3. Shortcut to shining windows

If you want streak-free mirrors and clean windows without the hassle, Cas Aarssen, author of “Real Life Organizing: Cleaning and Clutter-Free in 15 Minutes a Day” and the YouTube channel ClutterBug, has this expert tip: Add a teaspoon of cornstarch to your favorite glass cleaner and shake until dissolved. Cornstarch improves the cleaning power of the solution and makes streaks a thing of the past, so you’ll get the job done more quickly.

4. Use a cleaning method that also protects

Aarssen has an easy tip that will not only shine up your kitchen appliances, it will repel fingerprints and food splatters often left behind. Just spritz on a little wood furniture polish and rub in with a soft cloth until the surface shines like new.

5. Clean up top

Dust can collect on those high, hard-to-reach places, such as decorative molding and ceiling fans, making cleaning day more difficult. To clean your ceiling fan without showering dust bunnies everywhere, an old pillowcase is your best tool. Spritz the inside of the pillowcase with a vinegar and water solution and slip it over the blades of the fan, pulling it back to trap the dust.

For those tough to reach moldings and corners, use a sturdy rubber band to wrap a microfiber cloth around the end a broom, and give those hard-to-reach areas a clean sweep!

Read more

Tips to get the most out of your HSA dollars

(BPT) – Millions of Americans with high-deductible health insurance plans rely on health savings accounts to help them manage the costs of health care. If you’re among them, you know how important it is to maximize the value you get out of every HSA dollar.

If you don’t yet have an HSA, you may qualify for one if you receive health insurance through an employer-sponsored plan with a high deductible. Individuals may qualify if their deductible is at least $1,300, and families may qualify with a deductible of at least $2,600, according to the IRS. With an HSA, you can deposit pre-tax dollars into the account to pay for certain health and medical-related expenses — up to $3,400 for an individual and $6,750 for a family in 2017.

While there are approximately 17 million HSAs currently in use in the U.S., insurance industry watchers predict that number could rise significantly as the federal government again addresses health care reform, the Boston Globe reports.

You can maximize the value of your HSA in several ways, including:

* If you’re at risk for arterial or heart disease, you and your doctor may decide preventive screenings are in order. Screening proactively can help catch warning signs of trouble before a more serious problem develops. However, most insurers won’t pay for preventive screening for arterial health.

You can use your HSA dollars to schedule vascular health screening through Life Line Screening. You don’t need a doctor’s referral to schedule a simple, safe and painless ultrasound to detect possible plaque buildup in arteries — a leading factor in stroke and heart disease. Life Line Screening tells you the price of the screening up front and offers appointments in convenient locations throughout communities. Visit www.lifelinescreening.com to learn more and schedule an appointment.

* Keeping track of HSA-eligible expenses can be challenging, but budgeting software can help. Numerous free programs are available online. Most HSA providers also offer online access and digital tools to help you monitor your account, track saving and spending, and better understand the tax impact of your contributions.

* If your employer doesn’t provide vision insurance, you can use HSA funds to pay for eye exams, corrective lenses and even Lasik surgery. Studies show regular vision care is an essential component of overall health, and helps not only preserve your eyesight and eyes, but can also help detect other serious health problems.

* Only about half of American workers have dental insurance through their employers, according to the Bureau of Labor Statistics. For those who do have dental insurance, it typically does not cover all expenses. Yet dental health is intrinsic to overall health. You can use HSA money to pay for dental care, including exams, X-rays, braces, dentures, fillings and oral surgery.

* Smoking is one of the most damaging things you can do for your health, and your HSA dollars can help you kick the habit. Smoking cessation treatment is a qualified medical expense that can be paid for through health savings accounts. When you quit smoking, your body immediately begins to repair the damage caused by smoking, and you reduce your risk of heart attack, stroke and cancer, according to the American Lung Association.

“Smoking is associated with multiple chronic diseases, so quitting is one of the best things you can do for your overall health,” says Dr. Andrew Manganaro, chief medical officer at Life Line Screening. To help people understand their personal risk, Life Line Screening offers a program called “6 For Life” that outlines an individual’s risk for six chronic diseases and includes blood tests.

* Although controlling your weight is another important factor in overall health, few health plans will cover any kind of weight loss program. However, a doctor-prescribed weight loss program aimed at treating a specific disease such as obesity, high blood pressure or heart disease can be paid for with HSA money.

Your health savings account comes with many benefits and cost savings and tax breaks are just two of them. More importantly, when used wisely, your HSA can help you achieve better health.

Read more

Self-employed? Tips to help you navigate the mortgage process

(BPT) – Sponsored ad content by Vanderbilt Mortgage and Finance, Inc.

When you’re self-employed, you often work harder than anyone else you know. That’s what it takes to be your own boss. While rewarding, it comes with a lot of added responsibility. This is especially true when applying for a mortgage.

“Self-employment can complicate the mortgage process for one very simple but critically important reason,” says Eric Hamilton, president of Vanderbilt Mortgage and Finance. “Lenders need to know you will have the income to afford a loan payment. This sometimes requires people who are self-employed to provide more detailed information and paperwork than those who are traditionally employed.”

Proof of income

It’s not only good business sense for lenders to know a borrower can afford a mortgage before they make a loan, federal law also requires they do so. The evaluation process typically requires fewer steps for people who aren’t self-employed — those who get a salary for working for another person or company. The lender will review the applicant’s total income, existing debt, credit history and score, as well as other factors, and base the decision on that information.

However, when you’re self-employed, proving your income can be more complex. About 10 percent of people working in America are self-employed, according to the Bureau of Labor Statistics (BLS). If you’re among those 15 million people, it can be more difficult for you to document your income and prove you can afford to pay back the amount you’re asking to borrow.

“Lenders may ask self-employed applicants to complete a 4506T form, which allows the lender to look at the applicant’s tax documents, including recent income filings,” Hamilton says. “They will also likely request a professionally prepared profit-and-loss statement and balance sheet for the business to show you have steady income throughout the year between tax-filing times.”

Improving your chances of approval

Fortunately, if you’re self-employed, you can take steps to be better prepared when beginning the mortgage application process. Hamilton and the team at Vanderbilt, which specializes in financing mortgages for manufactured homes, offer some tips:

* Before you apply for a loan, pay off as much debt as possible. Mortgage lenders will consider your debt-to-income ratio, which compares your total income to the total amount you owe.

* Save up a substantial down payment.

* Work to improve your credit score by paying all bills on time and reducing your debt. Payment history and credit-utilization ratio (the total credit you have available compared to the amount you’re actually using) are important factors in determining your credit scores.

“Being prepared before you start a mortgage application and getting your finances in order can help make the mortgage process go much smoother,” Hamilton says. “The mortgage application process is just one step on your journey to home ownership, but it’s an important one.”

To learn more about mortgages for manufactured homes, visit www.VMF.com.

All loans subject to credit approval.

Sponsored ad content by Vanderbilt Mortgage and Finance, Inc.

NMLS Disclosure

Vanderbilt Mortgage and Finance, Inc., 500 Alcoa Trail, Maryville, TN 37804, 865-380-3000, NMLS #1561, (http://www.nmlsconsumeraccess.org/), AZ Lic. #BK-0902616, Loans made or arranged pursuant to a California Finance Lenders Law license, GA Residential Mortgage (Lic. #6911), Illinois Residential Mortgage Licensee, Licensed by the NH Banking Department, MT Lic. #1561, Licensed by PA Dept. of Banking.

Read more
Family moving due to flood

Flood insurance: Does your excuse hold water?

(BPT) – We know the old saying: when it rains, it pours… and when it pours, it floods. With winter snow storms coming to an end, the threat of flooding increases as the snow begins to melt and the rivers and creeks begin to swell. It’s easy to forget about how powerfully destructive water can be. In fact, nine out of 10 natural disasters include flood, making it the number one disaster in the United States according to the National Flood Insurance Program (NFIP). However, only 15 percent of homeowners have flood insurance. From 2006 to 2015, total flood claims cost more than $1.9 billion per year and the average claim was more than $46,000 during that time.

“Even just a few inches of water can cause thousands of dollars in property damage,” says Corise Morrison, executive director of underwriting at USAA. “While it’s possible to mitigate flood damage, complete prevention is nearly impossible. If you don’t take the proper precautions, it can be devastating to your family finances.”

For most homeowners, that means looking into flood insurance. But does it make sense for everyone? As an insurance professional, Morrison has heard all the explanations. Here are some of the most common misconceptions about flood insurance:

“Flood is covered by my homeowners insurance policy.”

Typically, flooding is not covered by a homeowners insurance policy. Therefore, homeowners must purchase a separate policy through the National Flood Insurance Program (NFIP) from their insurer. If the homeowner does have flood insurance, it’s important to regularly reevaluate it to ensure it provides adequate coverage.

“Flood insurance is too expensive.”

To emphasize an earlier point, the average cost of a flood claim hovered around $46,000 from 2011 to 2015. The average annual premium for flood insurance in the U.S. is $650, according to NFIP. Do the math.

“I don’t live in a flood plain so I don’t need flood insurance.”

The Federal Emergency Management Agency found that as many as 20 percent of flood claims come from moderate-to-low risk areas. These are areas in which lenders don’t require the purchase of flood insurance. However, “less likely” doesn’t equal “no risk.” Complete this quick self-survey: “Does it rain where I am?” If the answer is yes, consider flood insurance because it can flood anywhere it rains.

“Flood insurance won’t provide me with the coverage I need anyway.”

It is true that the NFIP limits coverage of a single residence to $250,000 for the structure and another $100,000 for contents to the home, but they aren’t the only source for coverage. Excess flood coverage can also be purchased above the $250,000 limit.

“I’ll just wait until it rains.”

Sorry to break this to you, but most insurers require a 30-day waiting period before a policy is effective. Unless your own forecasts rival the best science and technology have to offer, it might be wise to stick to the mantra, “better safe than sorry.”

The consequences for being ill prepared for a flood can be long lasting. Research and carefully weigh the risk to you and your property. Chances are that you’ll find that it might be more reasonable than you thought. Visit USAA.com/flood for more tips and information on flood insurance and what to do before, during and after flooding occurs. You can also visit FEMA’s Flood Map Service Center for more information or to determine your flood risk.

Read more
Husband and wife talking about finances

5 reasons why talking about money can enhance a relationship

(BPT) – Thinking about combining finances with your significant other? Whether you’re getting married or just thinking about getting serious, talking about money can help couples understand each other and avoid unhappy surprises down the road. Here are five reasons why talking about money can enhance a relationship.

It makes couples happier.

Talking about things like spending, saving and debt may sound business-like and unromantic, but financial experts agree that money is a frequent topic of arguments in many relationships. In fact, according to a survey by the American Psychological Association, almost a third of adults with partners reported that money is a major source of conflict in their relationship.

“What I see when talking with couples is that learning how to resolve money disagreements – and there will be disagreements – helps build important relationship skills,” says Daniel Prebish, director of Life Event Services with Wells Fargo Advisors. “Those skills will be valuable both at the beginning of a relationship and likely for a couple’s entire time together.”

It helps couples connect by understanding what’s going on.

Couples should discuss pros and cons of combining finances versus keeping finances separate. According to research by Wells Fargo & Company, about half of couples choose to combine accounts, while the other half prefers separate accounts. Regardless of where you and your significant other fall in this spectrum, both people in a relationship should understand how their financial habits impact – positively or negatively – the life they are building together.

It helps couples track their short and long term financial goals.

Be open with your significant other about your full financial picture. Questions that can help open the door to meaningful conversations include:

1. Are we paying ourselves first?
2. Do we have a safety net?
3. Are we paying all our bills on time, every time?
4. Have we reviewed our insurance needs in the last year?
5. Do we track our spending to know where our money is going every month?
6. Are we paying down high-interest-rate debt first?
7. Do we know where our credit stands?
8. Are we saving for retirement?

It helps couples afford the “extras” that make life fun.

Building a solid financial future shouldn’t mean forsaking enjoying life. When couples have a common understanding of how they’ll prioritize and manage their day-to-day finances like housing costs, grocery and utility bills, it’s easier to figure out where splurges fit in.

It helps avoid financial surprises.

Hearing your friends shout, “happy birthday” is a welcome surprise. What’s not welcome is suddenly discovering you can’t afford to pay this month’s bills or that retirement is farther away than a pot of gold at the end of the rainbow. Being up front about money issues and sharing complete financial information with your significant other helps avoid financial surprises that can add unnecessary stress to a relationship.

While discussing money may not feel romantic, it certainly is emotional. So how do you get started? Here are tips:

1. Admit the conversation can feel awkward, but commit to having it anyway.

2. Pick a mutually agreeable time. Your candle-lit Valentine’s dinner may not be the right setting. Pre-arranging the conversation will help ensure both people are mentally prepared.

3. Be open with your significant other. Share your values and opinions about spending and savings habits and goals you would like to achieve together.

4. Work at it. Commit to an annual meeting to talk about money, credit and whether you’re on track to achieve your financial goals.

By opening the lines of communication, you can get on the same financial page before joining financial forces.

(This article was written by Wells Fargo Advisors and Consumer Lending)

Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company. Wells Fargo Consumer Lending Group provides products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries. Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company.

Findings were a part of the 2016 Wells Fargo &Company’s “How American Buys and Borrows” survey. Over 2000 American adults ages 18 and older were surveyed. Survey results were not published in their entirety.

Read more