10 Things to Love About Do-It-Yourself Painting

I’m as ready as the next person to call in a building contractor when the need is there – even to hand things over to a professional painter from time to time. But when it comes to interior painting, in particular, I’m always tempted to do-it-myself.

Interior painting is a perfect do-it-yourself project for so many reasons. Here’s a quick list of 10 things I love about it:

1. It requires little or no experience. With just a little input and direction, even first-time painters can achieve professional-looking results.

2. It unleashes creativity. Today’s vast array of paint colors and sheen levels gets the creative juices flowing like no other form of interior decorating.

3. It is a great way to re-style a room. Changing from warm to cool wall color, or switching from light to dark hues, can quickly and dramatically change any part of the home.

4. It makes any space more personal. All due respect to interior decorators, but there’s something special about seeing your personal vision come to life with a color scheme and paint treatment reflecting your own taste and aesthetic.

5. It can be done in stages. You can do the surface prep one day, the painting another. Even the painting can be done in fits and starts, as long as you don’t stop in the middle of a wall.

6. It doesn’t take long to enjoy the result. Start to finish, most rooms can be painted in a weekend; many small spaces in a single day. For all practical purposes, you get immediate gratification!

7. It isn’t physically demanding. Granted, painting involves some stretching and squatting, but it’s more like exercise than physical labor.

8. It is an extremely economical way to remodel. It can cost many hundreds, or even thousands of dollars to hire someone to paint a large room. But when you do the work yourself, painting is very inexpensive.

9. It is easy to obtain expert assistance, if needed. You can get lots of help from the staff at almost any paint store. More help is available online from paint manufacturer websites.

10. It’s fun. That’s what I like most about do-it-yourself painting. Maybe the pleasure part is why I re-paint so often!

If you haven’t experienced the thrill and satisfaction of doing your own interior painting, you should give it a try. You’ll soon see why so many homeowners and apartment dwellers find it so addictive.

3 Ways Life Insurance Can Benefit a Charity You Love

Would you like to make a charitable gift to help organizations or people in need; to support a specific cause; for recognition such as a naming opportunity at a school or university? Perhaps you would do it just for the tax incentives. There is any number of reasons, and life insurance can be one of the most efficient tools to achieve these purposes. So the question becomes, how does this work?

Let me list the ways.

1. Make a charity the beneficiary of an existing policy. Perhaps you have a policy you no longer need. Make the charity the beneficiary, and the policy will not be included in your estate at your death. This also allows you to retain control of both the cash value and the named beneficiary. If you want or need to change the charity named as beneficiary, you can.

2. Make a charity both the owner and beneficiary of an existing policy. This gives you both a current tax deduction along with removing the policy from your estate. Once you gift the policy, you no longer have any control over the values.

3. Purchase a new policy on your life. Life insurance is an extremely efficient way to provide a large future legacy to a charity in your name without needing to write the large checks now. The premiums are given directly to the charity which then pays the premiums on the policy. The charity also owns the cash value as an asset. I am using this concept in my own planning.

Many charities would prefer to have their money upfront, but if you cannot write that large check or don’t want to part with your cash today, a gift of life insurance is a most efficient method to leave a large legacy in your name.

The Risks of Reverse Mortgages

My last couple of posts, beginning with The Mortgage is Dead; Long Live the Reverse Mortgage, have extolled the virtues of the improved FHA HECM reverse mortgage products. Given that the typical American family has far greater home equity than all other assets combined, making more productive use of that home equity to fund retirement should be a big help to many households.

No retirement strategy is perfect for every household, though, and there are some risks with HECMs that you should understand. Here are a few.

A HECM does not guarantee that you can keep your home.

A HECM guarantees that you can keep your home for as long as you, a spouse or a non-borrowing spouse still live in it. It also guarantees that you can't owe more when you repay the loan than could be recovered by you selling the home at fair market value. HECMs provide the opportunity for you, your estate, or even your heirs to pay off the loan with other assets and keep the home. But, they don't guarantee that you will have the financial means to do so. 

We are told by late-night TV commercials that a HECM borrower can never have their loan foreclosed except for three reasons: failure to pay property taxes, failure to keep insurance in force, or failure to maintain the property so long as the borrowers or a non-borrowing spouse live in the home. But, that's really four reasons, isn't it?

Tom Selleck (I think he plays an amazing Police commissioner in Bluebloods, by the way) is reported to say the following:

When you get a reverse mortgage, you are getting a loan. The bank is loaning you money in much the same way as it loans you money when you take a home equity loan. And when you die, the home is still yours to pass on to your heirs.

Some of this is correct. Banks are rarely involved, as I will explain below, but that’s a quibble. When you leave the home, and not necessarily because you died, the home is still yours to pass onto your heirs if you have other assets with which to pay off the loan or your heirs can arrange a new mortgage. The home is, in fact, still yours (or more accurately your estate's) after you die, but the home was collateral for the loan. If you or your estate can’t pay back the loan from other resources, you can’t pass on the home to heirs. It must be sold by your estate to pay back the loan.

Should you decide that you no longer want to live in the home, you will also have to repay your HECM. More importantly, if you are no longer able to afford the house and need to sell it, your HECM loan will also become due and payable. A retiree who loses a spouse gets divorced, or incurs huge medical expenses, for example, may find the home no longer affordable or perhaps just no longer desirable.

Imagine an executive at an oil company whose wife develops Alzheimer's disease and is bankrupted by the cost of her care. Why might a HECM not enable them to stay in the home? Maybe because they can no longer afford a mansion in a high cost of the living area even with no mortgage payments or perhaps they need to access the home equity in excess of their HECM credit limit. 

Every retirement plan should consider the possibility of a spouse's death, a divorce, spending shocks or any of a number of life-changing events. HECM borrowers should also consider the possibility that these changes might leave their home unaffordable or undesirable and necessitate paying off the loan long before they had planned. Retirees with expensive homes in areas with a high cost of living are at greatest risk of deciding to sell because they will see the largest benefit from selling and relocating.

If you can't repay the loan, you won't be able to keep the home. 

An Overview of Health Insurance Plans

Chances are, you have health insurance—only about 11 percent of Americans are uninsured. But unless you've had experience using your health insurance plan for significant medical treatment, you might not have paid much attention to the details of your coverage. And if you've had to shop for your own coverage or select from among several options offered by your employer, you might have found the choices overwhelming or confusing.

Regardless of where you obtain your health insurance, it's important to understand the terminology used to describe policies and coverage and to be able to compare plans. Knowing how your plan works—before you need to use it—is essential; you don't want to be sorting out the details of your coverage while you're sitting in a hospital room.

Where Can You Turn for Help?

Roughly half of Americans get their health insurance from an employer.

Help with plan selection, enrollment, and using your coverage is always available, regardless of where you get your coverage. If your employer offers health insurance coverage, don't be shy about asking questions. If there's a human resources department at your company, helping you understand your benefits is part of their job.

If you work for a smaller employer that doesn't have a dedicated human resources team, they can direct you to resources that can help you, including the health insurance carrier, the broker who helped the employer choose the coverage, the small business health insurance exchange, or a third-party payroll/benefits company that the employer uses.

Anytime you're verifying benefits or claims data, ask for details in writing so that you know for sure that the information is accurate.

In the case of buying your own health insurance, brokers are available to provide assistance online, over the phone, or in-person—and there's no charge for their services. Brokers can help you compare plans both on and off the exchange. If you know you want to use the health insurance exchange, there are navigators and certified enrollment counselors available to help you enroll. To find the exchange in your state, you can start at Healthcare.gov and select your state. If you're in a state that has its own exchange, you'll be directed to that site.

For Medicaid or Children's Health Insurance Program ( CHIP), your state agency can help you understand the benefits available to you, if eligible, and assist you with the enrollment process. You can also enroll in Medicaid or CHIP through the health insurance exchange in every state.

If you're eligible for Medicare, you can use your State Health Insurance Assistance Program as a resource.

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There are also brokers nationwide who help beneficiaries enroll in Medicare Advantage plans or supplemental coverage for Original Medicare.

Decisions, Decisions, Decisions

In some cases, your plan options may be limited, like if your employer offers only a single plan.  But most people have a few choices when it comes to selecting their health insurance. Your employer may offer a range of plans with varying coverage levels and monthly premiums. If you buy your own health insurance, you can select from any plan available in the individual market in your area (on or off-exchange, although premium subsidies are only available in the exchange).

 

 There's no one-size-fits-all when it comes to health insurance. The plan that will be best for you depends on a variety of factors:

  1. Do you have any pre-existing conditions? This is no longer an issue in terms of coverage availability as the Affordable Care Act banned medical underwriting as of 2014. But it will definitely be a factor in terms of picking a plan, because benefits, out-of-pocket exposure, covered drug list (formulary), and provider network vary considerably from one plan to another.

    If one member of your family has pre-existing conditions or is anticipating significant medical expenses in the coming year, you may want to consider enrolling the family in separate plans, with more robust coverage for the family member who's expected to need more health care during the year.

  2. Do you take any prescription drugs? Be sure to check the formularies of the health plans you're considering. You may find that one plan covers your drugs in a lower-cost tier than another or that some plans don't cover your medication at all. Health plans divide covered drugs into categories, generally labeled Tier 1, Tier 2, Tier 3, and Tier 4.

    Drugs in Tier 1 are the least expensive, while those in Tier 4 are mostly specialty drugs. Drugs in Tier 4 are generally covered with coinsurance (you pay a percentage of the cost) as opposed to a flat-rate copay. Given the high sticker price on specialty drugs, some people end up meeting their plan's out-of-pocket maximum very early in the year if they need expensive Tier 4 drugs. Some states, however, have implemented limits on patient costs for specialty drugs.

    If you're enrolling in Medicare, you can use Medicare's plan finder tool when you first enroll and each year during open enrollment. It will let you enter your prescriptions and help you determine which prescription plan will work best.

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  1. Are you currently receiving medical care from a particular physician or hospital? Provider networks vary from one carrier to another, so compare the provider lists for the various plans you're considering. If your provider isn't in-network, you may still be able to use that provider but with a higher out-of-pocket cost or you may not have coverage outside the network at all.

    In some cases, you'll need to decide whether keeping your current provider is worth paying higher health insurance premiums. If you don't have a particularly well-established relationship with a specific doctor, you may find that selecting a plan with a narrow network could result in lower premiums.

  2. Are you anticipating any expensive medical care in the coming year? If you know you have an upcoming surgery, for example, or you're planning to have a baby, it will likely make sense to pay higher premiums in trade for a plan with a lower out-of-pocket limit.  Keep in mind that you may get a better value from a plan with a lower total out-of-pocket limit, regardless of how much the plan requires you to pay for individual services prior to meeting that out-of-pocket limit.

    For example, if you know you're going to need a knee replacement, a plan with a total out-of-pocket limit of $3,000 might be a better value than a plan with a $5,000 out-of-pocket limit. Even if the latter plan offers copays for doctor visits, the former plan counts your doctor visits towards the deductible.

    It would ultimately be a better deal to pay the full cost of your doctor visits if you know that all of your healthcare spending on covered services will cease once you hit $3,000 for the year. Getting to pay a copay—instead of the full cost—for a doctor's visit is advantageous in the short-term. But for people who are going to need extensive medical care, the total cap on out-of-pocket spending may be a more important factor.

  3. Do you travel a lot?  You may want to consider a PPO with a broad network and solid out-of-network coverage. This will be more expensive than a narrow-network HMO, but the flexibility it offers in terms of allowing you to use providers in multiple areas might be worth it. If you're enrolling in Medicare, your travel plans will probably make Original Medicare—plus supplemental coverage—a better choice than Medicare Advantage, since Medicare Advantage has limited provider networks.

  4. What's your tolerance for risk? Do you prefer to spend more on premiums every month in trade for lower out-of-pocket expenses? Is having a copay at the doctor's office—as opposed to paying for all of your care until you meet your deductible—worth higher premiums? Do you have money in savings that could be used to pay for your health care costs if you opt for a plan with a higher deductible?

    These are questions that don't have a right or wrong answer, but understanding how you feel about them is a key part of picking the health plan that will provide you with the best value. The monthly premiums will have to be paid regardless of whether you use a million dollars worth of healthcare or none at all. But beyond the premiums, the amount you'll pay throughout the year depends on the type of coverage you have and how much medical care you need.

    All non-grandfathered plans cover some types of preventive care with no cost-sharing—meaning there's no copay and you don't have to pay your deductible for those services. But beyond that, coverage for other types of care can vary substantially from one plan to another. If you select the plan with the lowest premiums, be aware that your costs are likely to be higher if and when you need medical care. 

  5. Do you want to be able to contribute to a Health Savings Account (HSA)? If so, you'll need to make sure that you enroll in a High Deductible Health Plan (HDHP) that is HSA-qualified. These plans cover preventive care before the deductible, but nothing else. HSA-qualified plans have minimum deductible requirements along with limits on maximum out-of-pocket costs.

    You or your employer can fund your HSA and there's no "use it or lose it" provision. You can use the money to pay for medical expenses with pre-tax dollars, but you can also leave the money in the HSA and let it grow. It will roll over from one year to the next and can always be used—tax-free—to pay for qualified medical expenses even if you no longer have an HSA-qualified health plan.

A Word From Very well

Health insurance is essential but it can also be frustrating and complicated. Regardless of whether you have a government-run plan, coverage offered by your employer, or a policy that you bought for yourself, a solid understanding of how health insurance works will serve you well.  The more you know, the easier it will be for you to compare plan options and know that you're getting the best value from your health insurance coverage. And rest assured that help is always available if you have questions.