Author Archives: Blanco

1 in 4 workers run into this career derailment, but you can protect yourself

12 Nov 18
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As you approach your open enrollment deadline this year, you may forget to pay attention to one key area.

However, chances are you will need it.

One in 4 adults will become disabled before reaching retirement age, according to the Social Security Administration.

A total of 20.1 million adults of employment age report a work disability, according to research published by the National Institutes of Health. Common causes include back or neck problems; depression, anxiety or other emotional issues; and arthritis or rheumatism.


And when you’re plagued by these issues and cannot work, disability insurance can help you bridge the pay funding gap.

“As people go through their open enrollment, oftentimes their patience runs out after choosing their 401(k) solution, their health-care solution or their [health savings account],” said Jamie Kalamarides, president of Prudential Group Insurance. “Don’t forget about disability insurance.”

You may be tempted to overlook disability coverage for another reason: cost.

Disability insurance is often more expensive than term life insurance, according to financial advisor Tom West, partner at Signature Estate & Investment Advisors, which leads many to neglect the coverage.

Yet when planning for clients, West said he actually puts disability coverage high on the list of priorities.

“The probability of missing six to nine months of work because of a car accident or a broken ankle is so much exponentially higher than dying prematurely for a lot of folks who are in their younger years,” West said.

Long-term disability, which ordinarily kicks in after three to six months, typically costs 1 to 3 percent of a worker’s annual salary, according to Policygenius.

Take a look at your budget

For most individuals who are covered through their employer, that policy typically replaces about 60 percent of their income.

To determine whether you have enough disability coverage, take a look at your income, particularly the cash coming in and the cash going out, said Leston Welsh, head of disability and absence management at Prudential Group Insurance.

Keep in mind that if you do become disabled, your costs could go up, Welsh said. For example, you could have additional child-care or medical expenses.

When you are disabled, you do not want to deplete your emergency or retirement savings.

You should also consider how much you are saving toward retirement when estimating how much income you will need, West said.

“You’re trying to maintain your lifestyle and your ability to hit future financial goals, and obviously your ability to save is pretty material on that,” West said.

Also keep in mind how many people will be affected if your cash flow takes a hit — if you are a single-income household versus a two-income household and how many dependents you have.

Evaluate whether to expand coverage

If you decide you want more income protection, your employer may allow you to purchase additional coverage, Welsh said.

If you are self-employed, you may be able to get coverage through a professional association. You could also opt to get a policy on your own.

Going it alone can be more expensive, because group plans tend to spread the risk out among employees, Welsh said.

“If you’re someone who is very, very healthy, it could not be as expensive,” Welsh said.

You may also shop online for policies through national brokerages, West said.

One key thing to remember, West said, is not to neglect other types of coverage, such as health and life insurance, which also cover catastrophes.

“You want to make that first pass across all of those risks before necessarily doing the belt and suspenders on any one of them,” West said.

Stock market will plunge if Fed doesn’t hike rates in December, predicts ex-Wells Fargo CEO

12 Nov 18
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If the Federal Reserve doesn’t raise interest rates in December, it could cause turmoil the stock market, former Wells Fargo CEO Dick Kovacevich told CNBC on Thursday.

The central bank has recently come under attack by President Donald Trump, who has repeatedly criticized its decision to raise interest rates.

Kovacevich said the Fed “has” to hike rates because it has telegraphed it will do so.

If it doesn’t, the markets will plunge because it will seem like the Fed “caved to the president,” he said.

“The independence of the Federal Reserve is instrumental to any market economy. If that ever comes into question, the market is going to react very negatively,” Kovacevich said on “Power Lunch.”

While it is unusual for presidents to openly criticize the Fed, Trump has done just that.

Among other things, he said the Fed has “gone crazy” by continuing to raise rates and has called the central bank his “biggest threat.” He also blamed Fed Chair Jerome Powell for last month’s market correction and said he wasn’t happy with Powell’s “loco” decision to move forward with rate increases.

However, Trump is making a miscalculation, Kovacevich suggested.

“What he doesn’t understand is that the more he tries to influence the Fed by public statements, the less likely he is to influence the Fed, because the Fed has to remain and be perceived as being independent,” he said.

On Thursday, the Federal Open Market Committee voted to keep its federal funds rate in a range of 2 percent to 2.25 percent. In addition to the expected December rate hike, officials at the September meeting pointed to three increases next year.

Kovacevich believes the Fed is doing a great job and has been very transparent.

“Because we have a very strong economy, we have very low unemployment, we have reasonably low inflation … the Fed does not need to continue to be accommodative,” he said.

Instead, the central bank has to get to a neutral rate, which Kovacevich thinks is between 3 percent and 3.5 percent, although he noted that could change.

Bank of England deputy leader says the next few months will be crucial for the UK economy

12 Nov 18
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The next two to three months will be critical for the future of the U.K. economy, Ben Broadbent, deputy governor of the Bank of England, told CNBC Monday.

The U.K. government is racing against the clock trying to clinch a deal with the European Union in the coming weeks. The idea is to have an agreement on how the U.K. will leave the EU in March of next year with enough time for parliamentary approval both in the U.K. and across Europe.

“The sequence of events over the next two to three months could change the outlook materially,” Broadbent told CNBC’s Joumanna Bercetche.

Following a monetary policy meeting earlier this month, the BOE said the U.K. is set to grow 1.7 percent in 2019 and inflation is likely to hit 2.1 percent during the same period. The central bank’s forecasts are based on an assumption that the U.K. will strike a deal with the EU and keep relatively close trade links with the bloc.

“I still think it’s the most likely outcome but, of course, over time, every day there are headlines, positive, negative, which will send the currency in particular in one direction or the other,” Broadbent said Monday.

Sterling was once again under pressure Monday morning on the back of negative headlines about Brexit. The British media were reporting divisions within Prime Minister Theresa May’s circle of key lawmakers, with potentially further resignations from the administration.



Business investment and growth rates have been hit by the uncertainty surrounding the U.K.’s departure from the EU. The Office for National Statistics (ONS) said Friday that the U.K. economy expanded 0.6 percent in the three months to September, from 0.4 percent in the previous quarter. Broadbent told CNBC that growth has been “reasonably weak” over the last two years.

“That said and even though GDP (gross domestic product) growth has been weaker than certainly pre-crisis rates, it’s been strong enough to allow the unemployment rate to fall further to reach 40-year lows and that in turn has been strong enough to push our wage growth which is momentarily higher since any time since the crisis,” he said, mentioning that there are currently inflationary pressures.

The Bank of England kept its benchmark interest rates unchanged earlier this month, but it has raised rates twice since last year and since the global financial crisis of 2008. Following the November meeting, the BOE warned that despite good economic data, the lack of certainty over Brexit seemed to have hit business sentiment and could bring further volatility.

“The additional thing we have seen this year is an intensification of the drag on business investment from uncertainty about Brexit, investment has been relatively weak since the referendum, certainly compared to comparable economies …But that effect, I think, has intensified through the course of 2018,” he said.

In spite of what happens to the Brexit talks, Broadbent told CNBC: “We will do whatever we think we have to do to meet the remit.”

The central bank’s target is to keep inflation at 2 percent.