Broker Check

Monday Money Report

| November 08, 2021
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The jobs report released last week showed job growth rebounded in October, with the economy adding over half a million jobs, and unemployment dropping further to 4.6%.  The Federal Reserve Board of Governors met and is holding interest rates steady for now but has begun reducing, or tapering, its purchases of government bonds and mortgage-backed securities. Large US companies also continued reporting strong earnings, with 82% of S&P 500 companies beating analysts’ expectations.  All of that adds up to another record high set last week.

If you work for a large company or the government, you’re probably in or about to be in, the open enrollment period for benefits. While it’s not possible to give specific advice on a podcast, I can provide some general guidelines and things to consider as you make your selections for next year.

If your company offers short- and long-term disability coverage, I would encourage you to take the highest level of coverage you can.  This insurance replaces your income if illness or injury prevents you from working.  If you have the option to pay for this insurance with after-tax dollars, making that selection means the benefits paid out would be tax-free to you.

I’m not a big fan of Accidental Death and Dismemberment policies.  It’s essentially betting that you’re going out in a fiery blaze of glory. When we calculate life insurance coverage, AD&D policies are not included in that planning.

If you have children under 14, a Dependent Care Account allows you to put away money for day care, before and after school care, and summer day camps tax-free. 

For health insurance, I recommend checking out High Deductible Health Plans, or HDHPs, if your company offers one.  People are often scared off by the high deductible, and fail to consider that the premiums are usually much less expensive.  A HDHP allows you to contribute tax-free dollars to a Health Savings Account, or HSA.  Money that comes out to pay for qualified medical expenses is also tax-free on withdrawal.  The HSA carries over from year to year, and can play a big role in covering medical expenses in retirement.

To compare costs, we run two calculations. The first is total annual premiums plus the deductible, less any contributions that your company makes to your HSA.  This is a good comparison for a normal year without many medical needs.  Next, we look at total premiums plus maximum out of pocket costs, again less any employer HSA contributions.

Your action to take this week is to complete your FAFSA if you have a high school senior or college student.  Be sure to check out all our tools on our website at covingtonalsina.com, as well as our Facebook page for more information.

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a Registered Investment Advisor. CovingtonAlsina and Great Valley Advisor Group are separate entities from LPL Financial.

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. 

The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investment(s) may be appropriate for you, contact the appropriate qualified professional prior to making a decision.

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