Summer Activities
Liability risk is everywhere: at home, on the road, on vacation. It’s an unfortunate fact that accidents can stem from everyday activities and lead to costly lawsuits. Do you:
- Own a pool or trampoline?
- Entertain?
- Have excited pets?
- Spend time behind the wheel?
- Have a teen driver in the household?
- Own a recreational vehicle or boat?
- Have staff in your home (gardeners, nannies, housekeepers)?
These are all factors that increase your risk for a lawsuit. Therefore it is important to make sure you understand the risks you face and the options you have to manage those risks.
In today’s litigious society, every family with significant assets faces the risk of lawsuits that could significantly impact their net worth. That’s why we recommend you consider the need for an Excess Liability policy. Financial planners suggest that clients should have excess liability coverage at least equal to their net worth.
Personal Excess Liability policies, more commonly known as Umbrella policies, are very important to your financial well-being and the cost is minimal: usually about $300 annually for the first $1,000,000 in coverage.
Umbrella policies pick up where your homeowner and auto policies leave off. For example, if you are in a car accident and your auto policy provides $500,000 in coverage, and someone is seriously injured, you could be sued for much more than $500,000. The umbrella policy would then take over. The policy would pay for medical bills and in the event of a lawsuit, pay legal fees and the settlement – up to the limits of your policy.
Contact us today so we can customize a policy that balances your assets and risks to provide you with peace of mind.
Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures and create a customized insurance portfolio. Give us a call today at 617-723-0700.
Federal Service Contracts
The U.S. Department of Labor issued a Final Rule implementing Executive Order # 13495, Nondisplacement of Qualified Workers under Service Contracts, signed by President Obama on January 30, 2009. The Order and the final rule require contractors and subcontractors who are awarded a federal service contract to provide the same or similar services at the same location to, in most circumstances, offer employment to the predecessor contractor’s employees in positions for which they are qualified.
Where the successor contract is a contract subject to the Order and the final rule, the contracting officer (or designee) will ensure that the contractor provides written notice to the eligible employees of the predecessor contractor of their possible right to an offer of employment. Such notice may either be posted in a conspicuous place at the worksite or may be delivered to the employees individually. An offer of employment may be for any position for which the employee is qualified; the offer need not be for the same position that the employee previously held.
The effect on Contractors is outlined below:
- With limited exceptions, the contractor will be compelled to initially offer employment to the predecessor contractor’s employees. The contractor’s workforce will be comprised of the predecessor company’s employees rather than employees selected or employed by the contractor.
- If the predecessor workforce is unionized, the successor contractor will be required to recognize the union under the National Labor Relations Act successorship rules.
- Additionally, if the predecessor’s workforce was in the process of unionizing, then those organizational efforts will continue with the new Employer.
- The Final Rule’s effective date will probably be before year end when the Federal Acquisition Council issues companion regulations implementing the Executive Order.
Health and Welfare Changes
Effective June 17, 2012 the new SCA health and welfare benefit increased to $3.71 per hour. We encourage all contractors to not pay the new fringe benefit until it has been authorized by your Contracting Agency with a modification date.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe benefit obligations and provides your employees with valuable benefits.
Personal Finance 101
With their college degrees in hand, it’s time for the recent graduates in your life to take on the responsibilities that come with the rewards of financial independence. And given today’s economic challenges, it’s critical for them to establish good money management habits from the outset. Here are some key personal financial tips you can give them along with your graduation gift — the tips may even turn out to be the most valuable gift they receive.
Watch your spending
As a new graduate, this may be your first experience with significant, steady cash flow. It can be tempting to spend all of your newfound money, but tread carefully until you’ve evaluated exactly how much you earn and how much you spend.
To start out on the right financial foot, make a budget and stick to it. Determine your monthly expenses and monthly income (after taxes), and then calculate how much you have left over. As you create your budget, be realistic about your spending — you may be surprised, for example, how much you spend on ATM fees, cab fare or take-out food.
Make retirement savings a priority
Find a prominent place in your budget for retirement savings, and treat your contribution as one of your monthly bills. If you have access to a 401(k), 403(b) or other tax-deferred retirement plan at work, make contributions to the plan a priority in your budget. These plans let you put aside money, pretax, which then can grow tax-deferred. So you’re reducing your tax bill while saving for your future. Alternatively, your employer may have a 401(k)-type plan with a Roth option that may be even better for a young person.
If your employer doesn’t offer a retirement plan, consider opening up an IRA. If you choose a traditional IRA, you can deduct your contributions when you file your tax return next year. If you choose a Roth IRA, you can’t deduct your contributions, but the withdrawals you make at retirement will be tax free.
Whatever retirement plan you have, the most important factor isn’t how much you contribute, but that you start contributing as soon as you can. If at age 22 you begin contributing $150 per month to a Roth IRA account that earns 8% annually, you’ll accumulate $676,000 by age 65. But if you wait until age 30 to start contributing, you’ll need to save twice as much for the rest of your working life to catch up.
If your retirement plan offers an employer match, though, try to at least contribute the amount necessary to get the maximum match. If you don’t, you’re throwing away free money!
Bear in mind that if you withdraw funds from your retirement plan before age 591/2, you’ll be subject to current income taxes and an additional 10% tax penalty.
Manage debt wisely
Many college grads leave school with some form of debt, usually from student loans or credit cards. It’s important to develop a favorable credit history, especially in times of tight credit, because lenders want to see that you’re a good risk. Damage to your credit rating can impair your ability to qualify for a car loan or mortgage at an attractive rate.
So pay off your credit card bills in full every month. If you do have credit card debt, transfer the balance to a low interest-rate card and pay more than the minimum each month. If you pay only the minimum, it could take you years to pay off the card. Even with a low interest-rate card, that could add up to hundreds, if not thousands, of dollars of nondeductible interest.
If you’re having trouble making student loan payments, consider consolidating multiple loans to extend your repayment timeline and reduce monthly payments, or look into getting a deferment. Make sure the rest of your finances are in order before you start attacking your student loan bills too aggressively. Give priority to credit card and other debts with higher interest rates.
Plan for future expenses
In addition to contributing to a retirement plan and paying off your debts, get in the habit of saving for short-term to middle-term expenses. First, save for emergencies — build up enough to cover at least a few months’ worth of living expenses. Even if you have a good job, you never know what the future will hold, especially in a stressed economy.
Once you’ve built up your emergency fund, save for other goals. You’ll be rewarded with a growing nest egg that may enable you to fund a car, home, wedding or other big items down the road.
Finally, you aren’t too young to benefit from the guidance of a professional financial advisor, who can provide specialized advice for your individual situation.
Insure yourself
If your health insurance expired at graduation, make sure that you get covered — either through your new employer or through an individual policy. A health emergency can significantly deplete your funds. Fortunately, you’ll find that you’re likely relatively cheap to insure because most recent grads are young and generally healthy.
In addition, don’t overlook other insurance needs, such as renter’s and auto insurance, to make sure that large, unforeseen expenses don’t disrupt your finances too greatly. Be sure to shop around for competitive rates.
Presented by John Steiger, ChFC, AEP Certified Financial Planner
At Cleary, we are committed to a holistic approach of protecting and preserving our clients’ financial assets. Give us a call today at 617-723-0700 and let us know how we can help you.