Skip to main content

 We have been advising many of our clients who are teachers in the Michigan Educational system on the proposed changes to their Retiree Healthcare and Pension options. The state wants to put more of the cost of retiree healthcare and pensions on the teachers themselves due to their fiscal issues. The most important advice we have for our clients is that they have to crunch the numbers or have someone crunch the numbers for them to see what the impact of their decision is on their total financial plan. Teachers should also consider how long they have worked as a teacher and how long they plan to continue working in the school system. Finally, consideration should be given to whether the teacher is comfortable with 100% of their healthcare and retirement future completely in the hands of the state of Michigan.

The first change is in the retiree healthcare options where they have the option of selecting a Premium Subsidy or Personal Healthcare Fund. With the Premium Subsidy the employee will continue to contribute 3% toward retiree healthcare and retain the retiree health insurance premium subsidy offered by the state upon their retirement. With the Personal Healthcare Fund a portable, tax-deferred fund is established for the employee that can be used for paying healthcare expenses in retirement. Source: www.michigan.gov

There are four proposed changes to the State of Michigan teachers pension plan which are: Option 1: Voluntarily elect to increase their contribution to the retirement plan to retain the 1.5 percent pension factor in their pension formula for future service and future compensation. Option 2: Voluntarily elect to increase their contribution to the retirement plan to retain the 1.5 percent pension factor in their pension formula for future service and future compensation up until they reach 30 years of service and then reduced to 1.25 after that. Option 3: Voluntarily elect to not increase their contribution rate, and use a 1.25 percent pension factor for future service; Option 4: Voluntarily elect to no longer contribute to the pension fund and switch to a Defined Contribution type retirement plan for future service. Source: www.michigan.gov

Cyril S. White, MBA, CFP® Managing Director

White House Financial & Settlement Consulting, LLC

COMPREHENSIVE – CLIENT FOCUSED – FINANCIAL ADVICE

114 South Main Street • Suite 300 • Chelsea, Michigan 48118 • Phone: (734) 433-1670 • Fax: (734) 433-1671

www.whitehousellc.com

Securities offered through Sigma Financial Corporation. Member FINRA/SIPC

Fee-based investment advisory services offered through Sigma Planning Corporation, a registered investment advisor

CAUTION: electronic mail sent through the Internet is not secure and could be intercepted by a third party. For your protection, avoid sending identifying information, such as account, Social Security, or card numbers to us or others. Further, do not send time-sensitive, action-oriented messages, such as transaction orders, fund transfer instructions, or check stop payments, as it is our policy not to accept such items electronically. Please be aware that we do not provide tax or legal advice, and that the information set forth herein was obtained from sources which we believe reliable, but we do not guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.

Comments

Popular posts from this blog

COVID will not stop us providing unique settlement solutions using structured settlement annuities!

I hope that you are doing well! We just FINALLY completed the settlement of a case for a minor (age 17) that we were initially engaged by our plaintiff attorney client in February 2021, to provide structured settlement annuity quotes! Although the claimant was very close to the age of majority the key to the case was not giving him all of the settlement proceeds, which was over $120,000, at age 18. Having been in this business for over 20 years I cannot tell you the number of sad cases we have witnessed where the young claimant receives their settlement proceeds at age 18 only to blow through all the funds before anyone can blink and make bad decisions with the proceeds! This case involved two liability insurance carriers Liberty Mutual and Member Select. We coordinated multiple rounds of document revisions and had to have a separate set of different documents for each insurance carrier. In addition, one of the carriers would not fund the annuity until we had a fully executed court ord

Using a structured settlement annuity pre-suit

 We recently were engaged by the Guardian Ad Litem (GAL) in the case of an 11 year old boy who was struck by a care while riding his bike.  The father of the boy settled the case directly with the liability auto insurance carrier pre-suit and the GAL contacted us to ensure that the boy's settlement funds were handled appropriately. The case settled for a total of $65,000 and $59,000 was being allocated to the structured settlement annuity for the boy as follows: $5,000 paid immediately upon settlement $10,000 at age 18 $20,000 at age 21 $25,000 at age 25 $35,718 at age 30 this is total benefits of $95,718! The annuity was placed with a large life insurance company rated A+ by the A.M. Best rating agency and provided the family and GAL with the peace of mind that the young man would not receive the entire amount at age 18. In addition, due to the use of the structured settlement annuity, all of the interest gained during the payout period ($31,718 to be exact) is INCOME TAX FREE!  T

9/17/2023 Weekly Market Performance

  Here is our research department's Weekly Market Performance analysis.  If you have questions or need anything else please contact me at (734) 272-4322 or cyril.white@fourfinancial.com  U.S. and International Equities Markets Mixed The major markets ended mixed this week as the utilities and consumer discretionary sectors led while information technology lagged following Apple’s challenges in China.  Developed international equities posted solid gains this week as European stocks have witnessed their largest gain in six months after the European Central Bank (ECB) signaled an end to its hawkish monetary policy. Next Wednesday, the Federal Reserve meets concerning monetary policy and interest rates.  We believe the Federal Reserve should highlight underlying improvements within the inflation dynamic. In addition, we believe the Fed will not likely declare victory but will probably highlight the risks to growth and inflation are getting into balance. According to the AAII Sentiment