Expecting to get a raise next year?

Obamacare could eat up your raise

Health law prompts more companies to use salary-based premiums

   By Jonnelle Marte 

Expecting to get a raise next year? It could be eaten up by your health care bill.

In an effort to meet the affordability requirement of the Affordable Care Act, which kicks in next year and requires that workers spend no more than 9.5% of their income on premiums, more employers are turning to insurance plans in which premiums vary based on a person’s salary, rather than having all workers pay a flat rate. That way, employees who make more money pay bigger premiums.

Some 12% of companies used salary-based premiums in 2012, up from 10% in 2011, according to a study by benefits consultant Mercer. The practice is especially common among large employers, with 20% of companies that have at least 5,000 employees using the strategy last year. A separate survey by the Kaiser Family Foundation found that the approach of varying premium contributions by wage level is more popular in the Northeast, where 9% of companies used the strategy, and in the Midwest, where 6% of employers did, compared with 2% of companies in the South and the West.

While the strategy, which some employers have been using for decades, is still not mainstream, more companies are adopting the system as a way to prepare for the health reform law. It makes sense for some employers to shift costs to wealthier workers, especially as health-care costs continue to grow at a faster clip than wages, says Tim Nimmer, chief actuary and chief broking officer with Aon Hewitt, a human-resources consulting firm. Companies feel more comfortable “putting that increase on their higher earners just because they can afford it,” says Nimmer. If premiums increase by $100 for a company’s chief executive it may seem “meaningless,” but “for someone making $25,000, it could be the difference between going out to eat or paying electric bills or buying gas,” he says.

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More "Good News" for College Students...

The only thing wrong with the cartoon below is that the parents should be under the sack of debt along with their child...that is reality for millions of parents who are paying for their children's education...Dennis

It's Official: Student Loan Rates Will Double Monday

SHELBY BREMER , CREDIT.COM JUN. 28, 2013, 1:17 PM

More than 7 million students will see interest rates on their student loans double from 3.4 to 6.8 percent on Monday, after the failure of Congress to pass legislation to prevent the automatic rate hike that they successfully deferred for a year last summer.

Despite the introduction of several bills to serve as a solution, lawmakers will leave for the week-long July 4 recess without implementing any of them, letting the July 1 deadline pass. Any students taking or renewing federal subsidized Stafford loans after that deadline can expect to pay, for example, an additional $3,000 on a $23,000 loan paid off over 10 years.

House Republicans passed the Smarter Solutions for Students Act on May 23, a measure that ties student loan interest rates to market-based rates. This plan would have reset student loan rates every year depending on the rate on U.S. Treasuries, which Senate Democrats claimed was too uncertain and with a cap of 8.5 percent, could push rates even higher than 6.8 percent.

Mitchell Weiss, a student debt expert and contributor to Credit.com, has been following the issue closely.

“The increase impacts the subsidized Stafford rates, which will now double to 6.8% — equal to that of the unsubsidized Stafford loans,” Weiss says. “Although the population of subsidized borrowers is smaller and the House can certainly act to remedy the situation retroactively, I’m actually more concerned about the series of House and Senate proposals that would index all student loan interest to the wrong Treasury note while subjecting the ensuing rate to an unreasonably high mark-up that’s intended to cover administrative costs that have yet to be vetted.”

Read more: http://blog.credit.com/2013/06/student-loan-rates-double-july1/#ixzz2XXe4sPbV

Has Inflation FORCED "2-Income Households" in the US?

A family trying to get ahead needs to go into massive debt just to keep up.  How else will the median household income of $50,000 pay for a college education for their kids?  

Where inflation hurts

Americans store most of their wealth in real estate.  So you would think that the rise in real estate values is a good thing:

Nationwide, home values are now increasing at a double-digit annual pace.  The only problem is that this is coming in the form of big money crowding out regular home buyers.  The data is convincing.  Nearly one out of four purchases for the last few years has come from investors.  The battle for limited homes in places like Arizona and Nevada has created a secondary bubble.  Regular people may not even know that inflation is occurring but the only reason this is happening is that low rates are putting pressure on real assets in the economy.  In the end, you pay more but your monthly payment is likely to remain the same.  The public for the most part does not pay attention to what the Federal Reserve does.

The impact of this on real estate is the pressure on rents and home values.  This would be fine if household incomes were going up.  But many families in the US are now in a two income trap simply to keep up.  In the past, it was possible to purchase a home, go to college, and pay for basic necessities with one blue collar job without going into massive debt.  That seems so “old school” but that was the nucleus of the US middle class.  That is no longer the case:

Adjusting for inflation, Americans now have less discretionary income compared to a 1970s family and have much higher fixed costs.  Is this a positive revelation?  Probably not and families are struggling to send their kids to college and also are having a harder time saving for retirement.  It is interesting because more families now have two incomes under one roof instead of one:

It is great when both spouses are working because they are doing it out of their desire for career growth and professional development.  It is another thing when both working adults in a household need to work simply to put food on the table and make ends meet to pay the mortgage.  Also, childcare and other costs eat into any additional income that is brought into the household.

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Is a "huge train wreck" coming?

Sen. Max Baucus (D-Mont.), has warned that implementation of ObamaCare could be a “huge train wreck.”  Nobody is more aware of this possibility (inevitability?) than the small business owner who is being FORCED to comply.  Their response OF COURSE is to cut jobs, work hours, and future growth plans.  Anyone with any sense can see this coming as clear as day, BUT, is it part of your business story?  It should be...Dennis

Small Businesses Cutting Jobs, Hours to Save Themselves From ObamaCare

ObamaCare, Americans were assured, would create millions of jobs and be a boon to small businesses. But according to a recent survey, as full implementation of the healthcare law rapidly approaches, small-business owners, rather than rejoicing at their good fortune, are slashing jobs, work hours, and expansion plans.

The Gallup poll, commissioned by the law firm Littler Mendelson, found that because of ObamaCare, 41 percent of small businesses have instituted a hiring freeze, 19 percent have shrunk their workforces, and 18 percent have “reduced the hours of employees to part-time.” Nearly four in 10 small businesses — 38 percent — told pollsters they “have pulled back on their plans to grow their business” in anticipation of the law’s implementation.

“We were startled because we know that employers were concerned about the Affordable Care Act and the effects it would have on their business, but we didn’t realize the extent they were concerned, or that the businesses were being proactive to make sure the effects of the ACA actually were minimized,” Littler Mendelson attorney Steven Friedman told CNBC.

“To think that [nearly] 20 percent of small businesses have already reduced the numbers they have in their business because they’re concerned about the medical coverage is significant, and a bit troubling,” he said.

“We don’t know until 2014 and beyond what the impact of the ACA will be on businesses,” added Friedman, whose firm recently formed a healthcare-reform consulting group. “There is tremendous fear that the premiums will be much higher, for small businesses especially. At this point we can’t look a client straight in the eye and say, ‘Don’t worry about it. Everything will be fine.’”

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"OK...so how are you promoting Nu Skin?"

If you are serious about making money in network marketing and you understand that income is based on market penetration and products being moved from the Company to a Consumer...then you should seriously consider the implications of the following headline from CNN MONEY...Dennis

76% of Americans are living paycheck-to-paycheck

By Angela Johnson @CNNMoney June 24, 2013: 12:59 AM ET

Roughly three-quarters of Americans are living paycheck-to-paycheck, with little to no emergency savings, according to a survey released by Bankrate.com Monday.

Last week, online lender CashNetUSA said 22% of the 1,000 people it recently surveyed had less than $100 in savings to cover an emergency, while 46% had less than $800. After paying debts and taking care of housing, car and child care-related expenses, the respondents said there just isn't enough money left over for saving more.

 Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses, enough to help cushion the blow of a job loss, medical emergency or some other unexpected event, according to the survey of 1,000 adults. Meanwhile, 50% of those surveyed have less than a three-month cushion and 27% had no savings at all.

"It's disappointing," said Greg McBride, Bankrate.com's senior financial analyst. "Nothing helps you sleep better at night than knowing you have money tucked away for unplanned expenses."

LINK to article:

Starbucks...a peek into the future?

How is it that in 2013 Starbucks will be saving over $700 million over the cost of the coffee beans it purchased last year...and yet they are RAISING the cost of a cup of coffee for the consumer?  Could it...perhaps...have to do with their anticipated rise in labor costs, due to government mandates yet to be applied (i.e. ObamaCare)?   I just sip my coffee and smile when people go on about "free" healthcare...Dennis

STARBUCKS HIKING PRICES DESPITE LOWER BEAN COSTS

By CANDICE CHOI

— Jun. 21 4:06 PM EDT

NEW YORK (AP) — Starbucks wants a little extra change for that latte.

The Seattle-based coffee company says it's hiking prices on average by 1 percent nationally starting on Tuesday. But it says the price for many drinks, such as medium and large brewed coffees and Frappuccinos, won't change in most its 11,000 U.S. cafes.

For a small brewed coffee, the price will increase by 10 cents at most. Other drinks could increase by more than that.

"Less than a third of beverages will see a small increase in most stores," said Lisa Passe, a Starbucks spokeswoman. She noted that the increases will vary by region and may apply to different drinks.

Depending on the market, Starbucks Corp. notes it's the first price hike most customers will see in about two years.

The price hike comes despite falling coffee costs that have boosted the company's profits. In the last quarter, Starbucks cited lower coffee costs for a stronger operating margin, which represents the money it pockets from sales after subtracting what it pays to keep stores running.

And those lower coffee costs are expected to continue padding its bottom line.

Earlier this month, a Janney Montgomery Scott analyst issued a note to investors saying Starbucks is likely to benefit from lower coffee costs for the next few years. Based on the price of a coffee contract at the time, Mark Kalinowski estimated that Starbucks would pay about half the $1.4 billion it did for coffee in 2012.

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Just saying...

What will it cost in 2030?

Since Boomers are thinking about caring for their aging parents, it raises an interesting question...How much does a year of LTC (Long-Term-Care) cost?  While you may not be surprised at the answer, I bet you can't guess what a year of LTC will be in 2030 (HINT...don't forget to adjust for inflation)....Dennis

Retirement Costs Three Times More than Boomers Perceive

June 20th, 2013  |  by Jason Oliva Published in News, Retirement, Reverse Mortgage

Americans aged 50 and older underestimate long-term care (LTC) costs during retirement by more than three times the actual cost, according to a Nationwide Financial consumer survey released this week.

While boomers expect LTC costs to be $78,923 annually, an estimated 37% of survey respondents failed to factor for inflation. 

By 2030—the year the last of the boomer will retire—the cost of a nursing home is expected to reach $265,000 per year, according to a Life and Health Advisor report cited by Nationwide.

When asked their definition of LTC, three in four (75%) of the 813 retired and non-retired Americans aged 50 or older with at least $150,000 annual income said they think of nursing home care or residential assisted living. 

Respondents correctly estimated that it currently costs on average about $66,949 for one year of nursing home care, however, when asked to think ahead to 2030, they still underestimated those costs by more than half—$111,507 vs. $265,000.  

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Now Local Governments are Reducing Hours...Get Ready for More!

Common Sense predicted this on a MASSIVE scale...duh!  As ObamaCare's employer mandate rolls out we will see HUGE shifts in both private and "government" jobs as employees' hours are reduced across the board to avoid the cost of coverage for full-time workers.

This is only the beginning...Dennis

Local Governments Reeling Under ObamaCare Costs

By JOHN MERLINE, INVESTOR'S BUSINESS DAILY

 Posted 08:05 AM ET

When Regal Entertainment Group (RGC) in April blamed ObamaCare for the fact that it was cutting some of its workers' hours, backers of the law mounted a furious backlash against the theater chain, among other things filling its Facebook page with boycott threats.

"Greed and selfishness make me sick," one of them said.

Darden Restaurants (DRI) felt this intense heat last year after suggesting it might shift to more part-time work to minimize the cost of the law's mandate that companies offer coverage to all their full-time workers. CEO Clarence Otis even blamed its lowered outlook for 2013 in part on "recent negative media coverage" over "how we might accommodate health care reform."

Yet while private companies are getting all this unwelcome and hostile attention, local governments across the country have been quietly doing exactly the same thing — cutting part-time hours specifically so they can skirt ObamaCare's costly employer mandate, while complaining about the law in some of the harshest terms anyone has uttered in public.

The result is that part-time government workers — many of them low-income — face pay cuts that can top $3,000 a year, and yet will still be left without employer-provided benefits.

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American Debt Crisis for Dummies

Every once in a while I run across a video that makes me laugh AND think at the same time.  Here's one that is a VERY effective way to reach people you know who may have been "dumbed down" by the system.  Well worth the 3 minutes to watch...Enjoy...Dennis

Official Denial is Now the Stuff of JOKES...

Humorists reflect the reality of the average person...

Try VISUALIZING 22 Million People...

When people hear "the unemployment numbers" in our country there is a disconnect from reality.  I think the problem is that most people can't wrap their minds around how MANY people are really unemployed...I mean after all...how many people is 12 million?    Then there's the "underemployed" among us...how many is 8 million?  Then there's those who have just given up looking...how many is 2 million?  Here's an interesting way to visualize it...Dennis

12 million unemployed

The job market has been healing for more than three years now, but the jobs crisis is still truly a crisis.

The staggering statistics get repeated so often they can become numbingly abstract. About 12 million Americans still remain unemployed, but who can wrap their head around that number?

Try wiping both New York City and Los Angeles off the map. That's how many people we're talking about.

8 million underemployed

Next, factor in the Americans who want to work full-time, but can't get anything more than part-time jobs thanks to slack business conditions or other economic reasons.

Call them the underemployed. As of April, there were still 8 million of them -- the equivalent of the Chicago, Houston, Philadelphia and Phoenix populations combined.

2 million recent dropouts

Next, remember those who have given up on the job market altogether. They dropped out of the labor force and are not being counted in unemployment rate. It's hard to get an exact statistic on them, but here's what we do know:

About 2 million people are "marginally attached" to the labor force, meaning they want jobs and have looked for one in the last 12 months, but have not looked for one in the last four weeks.

That's roughly the size of Dallas and San Francisco combined.

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