Start Financial Planning With 3 Baby Steps

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financial planning session

Does the idea of financial planning — putting together a system for keeping your money matters and goals on track — seem daunting?

Then divide the task into smaller pieces.

Here are some small steps you can take immediately, in the coming week, and for the month that can help set a direction for your finances. These baby steps can be your start.

Financial planning steps for today

Make a budget. The first step in any personal finance effort is getting a handle on the amount of money you have coming in and going out. Making a budget lets you do that. And, in the process of putting one together, a budget helps you think about the priorities you have for your finances.

Here’s some guidance to help you put a budget together. For most people, the process isn’t that time-consuming.

If you already have a budget, you may want to revisit it and make adjustments, especially if your income has changed or you have incurred a major expense recently.)

Establish an emergency fund. If you don’t have an emergency fund, you need to start one. And you need to make consistent contributions to it as part of the budgeting process.

Generally, financial professionals suggest that the fund be held in a liquid interest-bearing account, like a money market account, savings account, or even a short-term certificate of deposit. Such accounts are generally straightforward and relatively quick to open. The money in your emergency fund typically should cover three to six months’ worth of living expenses, although recent bouts of severe unemployment have led many money mavens to suggest putting aside even more.

Get a Social Security account and report. Whether your retirement is looming or still a long way off, it’s a good idea to keep track of what your financial resources are likely to be. Social Security will likely be one of those resources. To find out how your personal Social Security account is shaping up, you need to go to myAccount on the Social Security web site and create your account. Then you can access your so-called “blue bar” report, which is a useful tool for those who want to know more about their benefits.

Many people don’t keep track. But it’s important information since it can flag retirement income issues you may face while you still have the time and the means to address them. So, take a few minutes to go to www.socialsecurity.gov/myaccount and follow the prompts

Financial planning steps for this week

Check your retirement contributions. A lot of times, people take a set-it-and-forget-it approach to their retirement accounts, especially those that are part of their workplace benefits, like 401(k)s. But it is important to periodically review such accounts and make sure you are getting the maximum benefit.

First of all, make sure that you are signed up for the plan. Some companies have a waiting period, and employees, having fallen into a routine after a few months, forget to take action.

Once in the plan, keep vigilant.

For instance, if you got a promotion or raise, you may want to consider increasing your contributions accordingly. Or, if you are old enough, you may have an opportunity to take advantage of some of the catch-up provisions available for those looking to bolster savings as they approach retirement.

And, perhaps, your company has changed matching levels for its 401(k) or has added investment options since you last checked. You’ll need to reach out to your benefits department to get the latest information and updates on your company-sponsored retirement plan sent to you.

Prioritize your debt. As part of the budgeting process, you no doubt got an idea of your debt load. The next, deeper step is to sort out those obligations. Generally, you want to pay off higher interest debt — like a credit card — first, while keeping current on less impactful debt.

Find a financial professional. For many people, expert financial advice can end up saving them lots of time and money in the long run. But it’s a relationship that has to connect on a number of levels.

You may want to look at professionals or services near you and ask friends, colleagues, or family for recommendations. If there is a financial services firm you particularly like, you can reach out to that firm directly.

Financial planning steps for this month

Portfolio review. It’s important to go over your investments periodically, especially in the face of changing circumstances and environments. You should dedicate a little time to it.

First of all, you need to collect information and examine all your investments, be they retirement accounts, like 401(k)s or IRAs, or brokerage accounts holding stocks, mutual funds, bonds, or exchange-traded funds. Then, you should look at the performance and nature of those investments and assess whether or not they still fit your goals and risk profile.

Remember, your risk profile is likely to change over time. Younger investors can tend to take on more risk, since they have time to recover from downturns, while older investors likely want to have less risk in their holdings, since retirement is nearer.

With that in mind, you can look at the entirety of your portfolio and determine if you have the proper asset allocation in place. That is, whether you have the right mix of higher risk and lower risk investments.

Taxes. Most people only think about taxes at year-end or around the tax-filing deadline. But it can pay to assess where you stand more frequently.

Specifically, taxpayers should check their withholding and make sure they’re on track to pay what they owe and nothing more. If you withhold too much, you’ll get a refund, but you will have missed a chance invest that money for compounded growth or to pay off debt. On the other hand, if you withhold too little, you could be surprised by a tax bill (or worse, an underpayment penalty) when you file your income taxes.

Meet your financial professional. Assuming you took the step above, your meeting with your financial professional should come within the month. You need to prepare for it, especially if it is your first meeting.

You need to approach it with an idea of the goals you want to accomplish and the topics you wish to discuss. Some questions to consider include:

  • Is your retirement plan on track?
  • Do you need to adjust your asset allocation?
  • Do you need help setting up an estate plan?
  • Is the appropriate amount of insurance protection in place for your family should something happen to you?

Conclusion

Obviously, there are more personal finance planning steps you can take, throughout the year or even a lifetime, to help keep your financial situation grounded. But the steps here — for a day, a week, or a month — can give you a start.

Provided by Matthew Clayson, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). CA Insurance License # 0I01304
©2024 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001 MM202708-310101

Emerging Wellness Trends in 2025

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The days of compartmentalizing physical, mental, financial and emotional well-being are over. In 2025, organizations are adopting a holistic approach that considers the entire employee. Expanding all aspects of wellness support is meant to help meet workers’ needs and expectations. While organizations may have already increased their mental health support in the past few years, some are now pivoting and ramping up financial wellness efforts in 2025.

This article highlights four employee wellness trends to monitor in 2025.

Addressing Employee Burnout

Many of today’s workers are burnt out; a recent report by talent advisory firm DHR Global revealed that 82% of employees are experiencing burnout. While health experts used to correlate remote work with positive mental health benefits, in 2025, they’re predicting equal levels of stress and burnout regardless of working location. So, unfortunately, employers shouldn’t expect employee burnout to disappear anytime soon.

Top drivers of employee burnout include long hours (58%), overwhelming workloads (35%), and difficulty balancing work and personal life (34%), according to DHR Global’s report. Burnout can be caused by stress, so employers are also looking at how stress shows up in the workplace and impacts employees. A recent survey by corporate wellness platform Wellhub found that nearly half (47%) of workers identify work stress as the primary cause of their deteriorating mental health—and that was consistent across most generations. Baby boomers are more concerned about inflation, while Generation Z, millennials and Generation X agreed that work stresses them out the most.

In an effort to prevent and alleviate rising levels of stress and burnout, more organizations are prioritizing flexible work arrangements, mental health days, realistic workload expectations and designated downtime to help employees maintain a healthy work-life balance. Employee assistance programs (EAPs), counseling services, stress management workshops and digital platforms for mental health assistance are increasingly becoming key components of workplace wellness initiatives. More employers are also investing in resources to destigmatize mental health (e.g., anti-stigma campaigns, mental health literacy training and EAPs) and foster a culture where employees feel comfortable seeking mental health support.

Prioritizing Financial Wellness

Money is a significant stressor for employees, and concerns have been exacerbated by prolonged inflation pressures over the past couple of years, growing debts and skyrocketing medical costs. In fact, more than 6 out of 10 Americans currently live paycheck to paycheck. PYMNTS Intelligence data also revealed that people say the top reason is that they don’t earn enough. While many organizations’ budgets are prepared for salary increases in 2025, they may still be insufficient to keep up with inflation.

Moreover, health care costs will once again increase substantially this year. Add all these financial responsibilities up, and it’s no wonder that workers today are worried about how they will earn a living and pay their bills.

Employers can help reduce employees’ financial stress by exploring financial wellness resources and support options and offering attractive programs for current and prospective employees. In addition to raising wages and offering competitive benefits, employers are exploring financial wellness resources, such as emergency savings funds, retirement savings, financial literacy workshops and one-on-one financial counseling. Financial wellness is a critical component of well-being and can be a competitive offering, especially as workers closely examine their salaries, medical bills and everyday expenses. Today’s workers are not only asking for but now expecting these lifelines from employers.

Engaging Employees Through Social Connections

According to Gallup, employee engagement in the United States reached an 11-year low in 2024. Additionally, employee satisfaction returned to a record low, and workers are seeking new job opportunities at the highest level since 2015. Organizational changes (e.g., team restructuring, additional job responsibilities and budget cuts) often cause employees to feel frustrated or disconnected from their jobs. Remote and hybrid work models can also make employees feel physically distant from their colleagues and teams.

While employee quit rates haven’t increased yet, a troubling trend is at play. Workers are staying with their current employers but feel more disconnected than ever. Gallup has coined this new era as “the Great Detachment.” Before workers start switching employers by the masses in 2025, organizations have an opportunity to reengage their workforce and rebuild employee commitment. Some ways to accomplish this can be by confirming organizational priorities and, if needed, resetting work expectations. More than ever, workers want to feel like their work is meaningful and has a purpose, which can further motivate them. Managers and supervisors can help direct reports connect their contributions to a mission or purpose.

Personalizing Wellness Programs With AI and Data

Recent technological advancements in employee wellness incorporate digital health platforms, wearable technology, artificial intelligence (AI) solutions and data analytics. More employers will explore leveraging technology to personalize employee wellness benefits.

Technology can enable real-time health monitoring, personalized wellness plans and immediate, 24/7 access to health resources and services. Virtual health platforms can help overcome barriers to health care access. With AI, organizations can also gather data on employee health metrics, work habits, stress levels and preferences. This kind of data can be used to customize wellness recommendations and detect or manage health issues. Nutrition, exercise, mental health and stress management are different for everyone, so AI and data analytics can help tailor support to match each person’s unique needs. As AI becomes more commonplace in 2025, technology has the potential to help personalize and improve employees’ well- being experiences and encourage preventive care.

Summary

This renewed focus on holistic wellness is not just a trend; it’s a fundamental shift in how companies approach employee care. By prioritizing mental, emotional and financial well-being in health and wellness initiatives, organizations can create a supportive culture that encourages education, open conversations and utilization of available resources.
Organizations can start by evaluating current wellness initiatives and considering ways to improve them. To ensure offerings and investments resonate with the workforce, it can be helpful to survey employees first to see what they find most valuable and necessary for their overall well-being. Contact us for more wellness-related workplace guidance.

This Benefits Insights is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. © 2025 Zywave, Inc. All rights reserved.

Drones, Electric Bikes, and Scooters: Is Insurance Necessary?

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Drone flying - do you have insurance

Recently, there has been extensive media coverage regarding notable drone activity along the East Coast. Analysts and commentators are emphasizing a notable and rapid increase in the usage of drones across various settings, which raises important conversations about safety and liability.

If you’ve spent any time in urban areas recently, you may have noticed the prevalence of electric scooters and electric bikes alongside the growing number of drones in the skies. These new modes of transportation are becoming part of the urban landscape, and they share a critical issue: a significant majority of private operators and users do not have adequate insurance coverage.

There are several reasons for this lack of insurance:

  • Most homeowners’ and auto insurance policies explicitly exclude coverage for aircraft-related activities, which encompasses drone usage.
  • Standard homeowners’ insurance typically does not extend coverage to electric vehicles, including electric scooters and bicycles.
  • Auto insurance policies are usually limited to registered vehicles, leaving many users of electric scooters and bicycles vulnerable in the event of an incident.

All three—aerial drones, electric bikes, and electric scooters—possess the potential to cause considerable bodily injury to others in case of an accident. This highlights a substantial gap in liability protection for users of these vehicles.

If you are actively operating drones, or using electric bikes or scooters, it is crucial to take proactive measures. We strongly encourage you to reach out to your Cleary Account Manager to discuss your current situation and explore the coverage options that may be available to you. Understanding your insurance needs can help protect you and others from unforeseen incidents.

Employer of Record and Drones: Two Challenges Employers Face

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Commercial owned drones and Employer of Record

As we enter 2025, two common issues have emerged that pose potential coverage problems for an organization’s financial well-being: Employer of Record Agreements and the use of drones.

**EMPLOYER OF RECORD AGREEMENTS** 

More U.S. companies are hiring talent from around the globe, thanks to advancements in technology that simplify communication, expand operational hours, and facilitate talent acquisition. To manage global hiring, organizations often turn to Employer of Record (EOR) services such as Globalization Partners, Oyster HR, and Velocity Global. These EOR organizations handle payroll, taxation, benefits, and local legal compliance for the U.S. entity.

However, an unintended consequence of this arrangement is that an organization might discover it lacks coverage after a loss caused by an EOR employee. Insurance policies typically have clauses that define “Who is an Insured.” While employees are generally considered insureds, policies also specify what constitutes an employee. If a policy’s definition excludes EORs, coverage for losses arising from EOR employment issues will not be available for the U.S. organization or the individual named in a lawsuit.

Furthermore, different policies issued by the same carrier may have varying definitions. For instance, General Liability coverage might include protections that are absent in Professional Liability policies.

When reviewing insurance programs, it is critical to:

  • Identify where the organization has “employees” and determine if any non-U.S. talent falls under an Employer of Record program. If so,
  • Collaborate closely with insurance carriers and underwriters when applying for or amending coverage to ensure that EOR employees are properly covered.

Many organizations, insurance brokers, and carriers may not be aware of this challenge, making it essential to recognize and address it promptly. Please reach out to your Cleary Account Manager to discuss whether EORs are being utilized.

**DRONES** 

Drones are increasingly used in commercial operations, benefiting industries such as roofing, real estate, and insurance adjusting. They allow for safer and more efficient property inspections, often from a distance, which can be beneficial for risk management in Workers’ Compensation.

However, this innovation presents potential challenges for an organization’s General Liability (GL) exposure. GL insurance typically provides coverage for bodily injury and property damage to others. If a drone causes injury or damage, one would generally look to the GL policy for defense and settlement coverage. The complication arises from the GL policy’s list of exclusions, which commonly includes the use of aircraft.

If your organization is using drones, please contact your Cleary Account Manager to discuss the implications for your coverage.

Embracing A Digital Detox

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Group of diverse people using smartphones

Technology has become such an integral part of life that it may be hard to imagine functioning without it. Beyond work, people depend on technological devices for information, communication, and entertainment. However, constant attachment to these devices can have harmful effects on your mental health. To combat these issues, you may consider a digital detox. The National Institutes of Health defines “digital detox” as a disconnection from devices or social media for a defined duration.

A survey by the American Psychological Association (APA) found that constant digital connectivity is linked to higher stress levels, with nearly 1 in 5 (18%) adults identifying technology use as a major stressor in their lives.

This article explores the effects of heavy technology use on mental health and offers practical tips for effective screen timemanagement with digital detoxing.

The Impact of Technology on Mental Health

Many people are hooked on tech gadgets for a reason. Checking these devices stimulates the brain’s reward system, causing the body to release dopamine, the pleasure hormone. However, these pleasurable activities can become addictive. Excessive screen time has also been linked to mood swings, suicidal tendencies, and increased stress and anxiety.

Studies suggest that excessive use of digital devices can have detrimental effects on mental health. For example, checking social media in bed at night has been found to increase the likelihood of anxiety and insomnia. Research also suggests that frequent technology use can lead to feelings of isolation, difficulty focusing, tech addiction and slower brain development.

Consider unplugging if you’re experiencing any of the following symptoms:

  • Increased anxiety
  • Increased anger or irritability
  • Depression
  • Poor sleep quality
  • Feelings of insecurity
  • Difficulty concentrating
  • Dependence on validation from social media
  • Fear of missing out

Benefits of a Digital Detox

Taking a break from digital devices is crucial to maintain balance and overall well-being. It helps reduce stress and improvessleep quality. When you step away from technology, you become fully present for yourself and for others, allowing for moremeaningful social connections. Furthermore, digital detoxing has significant mental health benefits. Studies show that peoplewho refrained from social media reported lower stress levels and improved self-image. Additionally, taking a technologytimeout allows you to be mindful of your online habits and form healthier routines, ultimately leading to higher productivity.

Simple Strategies for a Digital Detox

The APA survey also revealed that while 65% of Americans agree that occasionally unplugging or taking a digital detox isimportant for mental health, only 28% actually do so. Begin your digital detox by determining which behaviors you’d like toaddress and creating a plan that works for you. Try these strategies for an effective digital detox:

  • Turn off notifications. Notifications are distracting and can hinder productivity. Consider turning off as many as you can to minimize interruptions.
  • Use digital detox tools. Plenty of devices have built-in tools that can silence notifications or disable apps for a certain period. Research shows that those who use digital detox tools (e.g., iOS Screen Time or Google Play’s Digital Wellbeing)are less apt to use their smartphones compulsively and, thus, more likely to avoid the negative effects of social media.
  • Start your day tech-free. Many people pick up their phones and start scrolling when they wake up, but Stanford Lifestyle Medicine Program experts say this behavior activates the fight-or-flight response. This not only creates a sense of anxiety but also conditions the brain to be more hypervigilant. Instead, use the first hour of the day for activities such as exercising, spending time outside or preparing a healthy breakfast. The goal is to create a morning routine that sets a positive tone for the day and supports brain health.
  • Take periodic breaks from technology. Eliminating the use of all digital devices may not be realistic, especially if you use them for work. Instead, set limits for how much time you spend on social media each day or designate certain times for phone use. You can also consider ways to make small changes, such as chatting with someone face-to-face rather than using your phone.
  • Create gadget-free zones. Designate specific areas in your home, such as dining rooms and bedrooms, where gadgets are not allowed. This allows you to be more present and encourages tech-free activities, such as baking, reading, doing crafts, and playing cards or board games.
  • Reach out for support. Family and friends can offer emotional support during your digital detox. They can hold you accountable and keep you motivated when you’re struggling to stick to your goals.

Conclusion

While technological devices aren’t inherently harmful, overuse can negatively affect your physical and mental well-being. Witha digital detox, you can break unhealthy habits and embrace more balanced, healthier alternatives.

Contact a mental health professional for further guidance.

5 Forces Driving Commercial Auto Costs

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Over the past decade, auto insurance rates have increased steadily, well exceeding the rate of inflation over the same period. But what’s driving this upward trend? Explore factors that have significantly impacted the rates for commercial auto.

  1. Bodily injury loss costs
    In the five-year period from 2018 to 2022, auto severity has increased a substantial 40% even as frequency has declined.1 Causes include an increase in deadly accidents, rising verdicts in legal cases and medical cost inflation. In fact, the latter is expected to grow 7% in 2024, up from 6.0% in 2023 and 5.5% in 2022.2
  2. Attorney involvement
    With attorneys actively pursuing auto accident business, more claimants now have legal representation. These claims see higher rates of expenditures for medical procedures and treatment.3 A complete fleet management program can help reduce your exposure.
  3. Distractions and impairment
    Distractions behind the wheel, from vehicle infotainment systems and mobile devices to driving under the influence, can lead to significant risks: 30% of companies surveyed reported that they have employees who have been involved in crashes due to mobile phone distraction, and deaths due to preventable crashes are up 18% versus pre-pandemic levels.
  4. Inexperienced drivers
    Resignations and retirements are leading to a shortage of commercial operators, increasing the chance that less experienced replacement drivers are behind the wheel. Operators in new vehicles and covering new routes can also contribute to an increase in accident rates.
  5. Vehicle repair and replacement costs
    Autos have become more expensive to insure and repair. Newer vehicles are outfitted with advanced materials and technology designed to make driving more comfortable and safer. When these vehicles are involved in an accident, costs can be high, and labor shortages and inflation have only exacerbated the issue. In fact, motor vehicle parts and equipment costs have increased almost 24% since September 2019.5 Meanwhile, used car prices are still up almost 47.9% in 2023 compared to the average from 2015 to 2019, despite recent softening.6 This directly impacts the cost of claims in the event of a total loss. Finally, rising auto thefts are further contributing to increased claim costs.

Travelers 5 Forces Driving Commercial Auto Insurance Costs

https://www.travelers.com/resources/business-topics/insuring/commercial-auto-risks-that-can-increase-insurance-rates

Sources
1 LexisNexis Risk Solutions Auto Insurance Trends Report2 Health Research Institute3 Attorney Involvement Keeps Claims Soaring (June 2023, The Institutes)
4 Travelers 2023 Risk Index – Distracted Driving
5 Auto Insurance: The Uncertain Road Ahead (2023, APCIA)6 Edmunds Used Vehicle Report (Q3 2023) 

Early Retirement Checklist

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If you’ve ever yearned for an early retirement, you’re not alone.

A small but growing contingent of working Americans have made it their mission to eliminate paycheck dependency well ahead of the traditional age of retirement.

More than one-third of Gen Zers, millennials, and GenXers said they plan to retire before age 65, according to the most recent research from GOBankingRates. Men were most likely (32 percent) to express confidence in an early exit, versus 25 percent of women.1

The mostly millennial-led FIRE community, which stands for “financial independence, retire early,” is also gaining traction on social media with 26,000 followers on Facebook alone. Many proudly declare that they plan to exit the workforce in their early 40s.

But planning to retire early and following through are two different things.

To start with, you must carefully consider:

  • Your reason for wanting to retire early
  • Health insurance coverage
  • Physical and emotional wellness

Explore your reason

FIRE aficionados should be sure they have a clear vision of what it is they hope to achieve by retiring early. Is it to volunteer more, travel the world, play a more active role in a nonprofit you support? The better defined your plan, the more likely you are to meet your expectations.

If it’s a better work-life balance you seek, try changing employers or using your work experience to shift gears into a more forgiving industry.

Indeed, an early retirement means different things to different people. Some view it as a total departure from the workforce, which requires significant savings depending on the age at which they retire. Others define it as having enough personal savings set aside to quit their day job and start a home-based business, do part-time consulting, or pursue a more meaningful (but lower paying) job.

A retirement plan that builds in flexibility and allows you to supplement your savings as needed can help you sleep easier at night.

How much I need to retire early?


It goes without saying that you can’t quit work until you’ve got enough saved, but just how much do you need? That depends on your expenses, your age, and your health insurance coverage.

It may help to segregate your savings goal into two distinct phases:

  • The money you will need available to cover the bills before you reach the age of Medicare and Social Security eligibility.
  • The money you need saved in your tax-deferred retirement accounts (401(k)s and IRAs) to provide for your needs after you reach age 59-1/2.

Remember, you can’t start claiming Social Security until age 62 at the earliest, and many retirees delay benefits until at least their full retirement age at 67 to permanently augment the size of their monthly benefit.

Similarly, you generally can’t withdraw money from your tax-deferred retirement accounts such as your traditional Individual Retirement Account or 401(k) until age 59-1/2 without incurring taxes, plus a hefty 10 percent penalty.4,5

That means you’ll need enough saved to get you over the hump until your retirement accounts and Social Security become accessible.

Be sure to factor in projected expenses, such as college tuition costs for your kids or a wedding for your child, if you plan to chip in.

A 2020 survey by the AARP and National Alliance for Caregiving found 53 million Americans had provided unpaid care to an adult with health or functional needs.6 The average family caregiver spends roughly $7,2000 per year, or nearly 20 percent of their annual income, on out-of-pocket costs, according to AARP estimates.

Expect the unexpected

An oversized emergency fund of at least a year’s worth of living expenses is a must for early retirees, creating a buffer for years when the stock market may be limping along or a medical expense crops up.

Saving enough money and projecting your living expenses accurately is no easy task. Perhaps that explains why less than half (47 percent) of the higher income respondents to MassMutual’s survey said they were confident in their ability to retire at their intended age.

It helps to work with a trusted professional who understands your financial goals and can help you solve for variables, including whether your house will be paid off, tax efficiency, the effects of inflation (which erode purchasing power), and whether the numbers only work if you move to a more tax-friendly state with a lower cost of living.

Think, too, about your safety net in case your early retirement plan doesn’t work.

Consider, for example, whether you should budget for homeowners or renters insurance, whether you will carry life insurance, and how you will ride out Wall Street’s inevitable bear markets. Will you be able to go back to work, if needed, to generate some supplemental income?

Healthcare coverage

The fly in the ointment for many FIRE fans is healthcare coverage. You aren’t eligible for Medicare federal health insurance until age 65, so unless your spouse plans to continue working and can cover you on his or her health plan, you’ll need to factor the costs of private insurance into your budget.

Depending on the size of your family, private coverage can set you back several thousand dollars a month.

During the accumulation phase, while you are still working, it may help to select a high deductible health plan with a health savings account (HSA) component, if available through your employer.

According to the Fidelity Retiree Health Care Cost Estimate, a 65-year-old individual who is covered by Medicare and retires this year will need roughly $165,000 in today’s dollars for out-of-pocket medical expenses throughout retirement, not including any costs associated with long-term care.

Your physical and emotional well-being

Lastly, spend some time planning for your emotional and physical well-being. Will you miss the social interaction of a work environment? Does your spouse support your goal of an early retirement? Will the workweek feel lonely if most of your friends and family are still doing the 9 to 5 grind?

Making the switch from collecting a paycheck to living off your savings is a challenging task at any age. For those who intend to retire early, however, it’s all the more crucial to plan ahead — and consider all options — so they can make the transition to financial independence with confidence.

Provided by Matthew Clayson, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). CA Insurance License # 0I01304
©2024 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001 
MM202708-310101

Rising Cost of Homeowners Insurance

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Photo by Pegleess Barrios from Burst

Many people can expect their homeowners insurance rates to go up this year—along with the rising cost of materials and supplies—in this economy.

Several factors are behind the rising costs. Severe weather events continue to cause serious damage and costly insurance claims. The rising cost of building materials, supply chain issues and unfilled jobs are driving up the costs of home repairs.

In this article, we’ll explain some key factors causing home insurance rates to rise and what you can do to help rein in your costs.

What are some key factors driving up home insurance rates?

Extreme weather events and catastrophes

Hurricanes, floods, droughts, wildfires and other severe weather events have become more frequent, destructive and contributing to rising costs. As of October 11, 2022, the United States sustained 15 weather events with losses exceeding $1 billion each.1 As weather-related damages go up, so does the cost of insurance overall. Insurers typically adjust rates on a state-by-state basis based on actual and anticipated weather-related losses.

Rising cost of materials

Another key consideration when pricing homeowners coverage is the cost to repair or rebuild a home in the event of a loss.
Limited supplies and inflated prices for most building materials continue. Consider this sampling of price increases between October 2021 and October 2022:

  • Material goods for new residential construction rose 14.3%.2
  • Lumber and wood products went up 6.2%.3
  • Asphalt roofing materials grew 14.5%.4
  • As building costs go up, so does the cost to repair or replace homes damaged by covered losses.

Skilled labor shortage

The construction industry is facing a skilled labor challenge, which has resulted in added expenses related to wages, supply chain problems and other construction issues.5 This sector had 423,000 job openings as of September 2022,6 more than twice the projected number of annual openings.7

Factors impacting your homeowners rate you may be able to control

Current market conditions that affect the rising cost of your insurance premiums may be out of your control, but there are steps you can take to help keep the cost of your homeowners coverage in check.

  • Install protective devices. To help avoid losses and save money, ask your insurance agent about any savings you might qualify for by taking preventive measures to protect your home. For example, Travelers offers insurance premium discounts for smoke detectors, fire alarms, water sensors, interior sprinkler systems and smart home protection devices.
  • Review your insurance. Ask your agent to review your current coverage to ensure you’re getting the customized protection you need. Make sure all home improvements are accounted for. Cancel or reduce coverage you no longer need.
  • Increase your deductible. A higher deductible will likely reduce your premium. Just remember to have enough savings to cover your deductible should you experience a loss.
  • Bundle your policies. Travelers offers discounts when you purchase more than one policy with them. Home and auto are commonly bundled for a discount, but discounts may also apply to boat, valuables, personal umbrella protection and other specialty coverages. Learn about the multi-policy insurance discounts that Travelers offers.
  • Explore customer retention programs. Travelers offers premium discounts, or credits to long-term customers. For example, the Travelers Decreasing Deductible®* program applies a $100 credit each year toward your deductible. This credit is earned at your annual renewal date even if you have a loss.

*Travelers Decreasing Deductible is not available in all states, including California.

Current market conditions are challenging. Catastrophic weather events are on the rise. Pandemic-era disruptions, including shortages in building materials and skilled labor, are driving rate changes. But there are factors within your control when it comes to the premiums you pay. It’s smart to take advantage of them.

Travelers Why Homeowners Insurance Premiums are Rising and What You Can Do

https://www.travelers.com/resources/home/insuring/why-did-my-homeowners-insurance-go-up

Sources

1 https://www.ncdc.noaa.gov/billions/ 
2 U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Inputs to Industries: Net Inputs to Residential Construction, Goods, October 2022
3 U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Lumber and Wood Products, October 2022
4 U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Asphalt Felts and Coatings, October 2022
5 https://www.agc.org/news/2022/08/31/construction-workforce-shortages-risk-undermining-infrastructure-projects-most-contractors-struggle-0
6 U.S. Bureau of Labor Statistics, Job Openings: Construction, September 2022
7 U.S. Bureau of Labor Statistics, Construction Laborers and Helpers, September 2021 

1 https://www.ncdc.noaa.gov/billions/ 
2 U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Inputs to Industries: Net Inputs to Residential Construction, Goods, October 2022
3 U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Lumber and Wood Products, October 2022
4 U.S. Bureau of Labor Statistics, Producer Price Index by Commodity: Asphalt Felts and Coatings, October 2022
5 https://www.agc.org/news/2022/08/31/construction-workforce-shortages-risk-undermining-infrastructure-projects-most-contractors-struggle-0
6 U.S. Bureau of Labor Statistics, Job Openings: Construction, September 2022
7 U.S. Bureau of Labor Statistics, Construction Laborers and Helpers, September 2021 

Mitigating the Financial Risks of a Forced Retirement

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forced retirement may running

An early retirement is a celebratory event when it happens according to your timeline. But it can also be a financial wrecking ball when you’re forced to retire prematurely — something many Americans experienced during the COVID-19 pandemic.

Indeed, more than 3 million additional workers in the U.S. retired during the pandemic than is typical, according to a Federal Reserve Bank of Saint Louis analysis, which found “a significant number of people who had not planned to retire in 2020 may have retired anyway because of the dangers to their health or due to rising asset values that made retirement feasible.”1

But it’s not just a global health crisis that can induce an early retirement. Injury and illness are among the most common reasons that cause a forced retirement. Some on the cusp of retirement lose their jobs and choose to sit it out for good when their employer downsizes or their skill set becomes obsolete. And others stop working before they intended to care for an ailing loved one.

Indeed, those who are forced into early retirement early need to consider the following potential financial risks:

  • Longevity risk
  • Health insurance coverage
  • Inflation
  • Sequence of returns risk

Taking steps to manage these risks as early as possible is a must. For guidance, many turn to a financial professional.

Longevity risk after a forced retirement

Those who stop working before their normal retirement age are far more vulnerable to longevity risk — the likelihood of outliving their assets — because they must stretch their savings out over a greater number of years. They also have fewer working years to contribute to tax-deferred retirement accounts, so they start off with less in the bank.

As a general rule of thumb, financial professionals often recommend a 3 percent or 4 percent withdrawal rate during the first year of retirement. Retirees can then adjust that amount higher annually to keep pace with inflation.
Assuming their investment portfolio earns more than 4 percent on average per year, that withdrawal rate ensures that they will only ever spend their earnings and leave their principal untouched.

Early retirees, who need their savings to last longer, may need to learn to live on less. They may also need to reduce their expenses by downsizing to a cheaper house or simply return to work (even part time) for a few extra years to bolster their retirement nest egg.

Those who have the means can also potentially delay claiming Social Security benefits a few extra years to permanently increase the size of their future Social Security checks — the best way to give yourself a raise during retirement.

Health insurance coverage after a forced retirement

Many early retirees underestimate the potential cost of paying for private health insurance during the years before they become eligible for Medicare, the federal health insurance program covering those age 65 and older, certain younger people with disabilities, and those with end-stage renal disease.

Premiums for private health insurance, even for a few years, can consume an oversized portion of your savings, which could undermine your ability to make ends meet throughout retirement.

Options for coverage include COBRA, a spouse’s insurance, retiree health insurance benefits, the public marketplace, private health insurance, membership-based group health plans, and Medicaid for those with demonstrated financial need.

Long-term care (LTC) insurance coverage, which picks up where Medicare leaves off, can potentially curb future costs related to assisted living and nursing home care. Some hybrid life insurance policies include LTC coverage.

Before buying an LTC insurance policy, retirees should speak with a financial professional to determine whether such coverage is the right fit for their family.

Inflation

The rising cost of goods and services, otherwise known as inflation, is enemy number one for retirees.

When you no longer produce an income, any increase in consumer prices erodes your purchasing power. And the more years you spend in retirement, the bigger that threat becomes.

Historically speaking, inflation rises from 1 percent to 3 percent per year. Assuming 3 percent annual inflation rate, a 55-year-old making $50,000 per year who retires today would need the equivalent of about $91,000 by age 85 to maintain the same standard of living.

Inflation, of course, doesn’t always remain within the federal government’s target range. In early 2022, the Consumer Price Index soared to 7.5 percent, the biggest spike in consumer prices since 1982.

Retirees typically scale back their level of investment risk because they depend on their retirement savings for income and can’t afford a period of prolonged losses. While that may be age appropriate, it is also a risk to become too conservative with their asset allocation.

Sequence of returns risk

New retirees, regardless of when they leave the workforce, must also be mindful of market performance.

Those who retire into a bear market, or experience losses or low returns in the early years of their retirement, are statistically far more likely to outlive their savings than retirees who experience losses later on.

Indeed, while permanent life insurance policies are primarily designed to provide a death benefit to protect the ones you love, they also build cash value as premiums get paid – and you can borrow from your cash value for any purpose.

For example, retirees can use their cash value to pay the bills when the market is down, giving their investment portfolio time to recover.

Another way to offset sequence of returns risk is to create a traditional emergency fund worth at least 12 months of living expenses in a liquid account, such as a savings or money market account, from which retirees can draw an income during periods of market downturns.

Conclusion

It’s one thing to plan for an early retirement, but quite another to be forced out of the workforce prematurely. With careful planning, professional guidance, and tools to mitigate multiple risk factors, however, it may still be possible for early retirees to live the lifestyle they had envisioned.

Provided by Matthew Clayson, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). CA Insurance License # 0I01304


©2023 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001 

MM202611-307408

7 Ways You Might Be Sabotaging Your Salad

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making a healthy salad

Salads may not be as American as apple pie, but plenty of people report eating them regularly: four times a week, on average, according to a poll commissioned last year by Fresh Express and conducted by OnePoll. More than half of the 2,000 U.S. adults polled — 62 percent — said that salads are part of their regular diet.

It’s a little puzzling to reconcile those numbers with the staggering rates of obesity in this country, but then, the health value of a salad really depends on quality rather than quantity. While salad — usually conceived as a big bowl of fresh, raw vegetables and leafy greens — has all the makings of a terrific health food, it’s easier than you might imagine to go astray and sabotage your salad. Pouring on the dressing, overdoing the carbs, forgetting about protein, and other common missteps can turn this nutritious meal into a calorie bomb.

Whether you’re ordering out or tossing your own, here are seven common mistakes to avoid.

  • Mistake 1: Forgetting Protein
  • Mistake 2: Drowning in Dressing
  • Mistake 3: Packaged Dressings
  • Mistake 4: Going Crazy on the Croutons
  • Mistake 5: Boring Bowls
  • Mistake 6: Using Light Greens
  • Mistake 7: Not Cleaning Around Your Greens

The Magic Formula for a Winning Salad

Now that you’ve learned what salad mistakes to avoid, here’s how to do it right! Cassetty shares her formula for building a satisfying, substantial, nutrient-dense salad. Combine the following:

  • Two parts veggies, which could be leafy greens; chopped peppers, cucumbers, or tomatoes; or roasted veggies
  • One part carbs, such as quinoa, brown rice, sweet potatoes, butternut squash, or dried or fresh fruit
  • Protein, such as eggs, beans, legumes, or tofu
  • Fat Cassetty encourages plant-based sources of fat such as avocado, olives, or an oil-based dressing. Cheese works well for certain salads — think beets and goat cheese or a Greek salad with feta.
  • Crunchy bits Nuts, seeds, or crunched-up whole-grain chips or crackers
  • Flavoring Along with dressing you can add enhancements like Italian, Greek, or everything-but-the-bagel seasoning.

How much of the protein, fat, and crunchy bits should you add? “The amount that would feel comfortable and enjoyable,” Cassetty says. “Think about the fat source as an accessory — it gives your salad lots of flair, but you don’t want to overdo it,” she says. “And protein is a filling element, so how hungry are you? When we base our decisions like that, we’re tuning into our bodies, and that helps us eat more in line with what our bodies need.”

To read the full article click here

By Stephanie Thurrott (March 2023)

7 Things That Ruin a Healthy Salad (everydayhealth.com)