Money, Health, and Other Things

Educational Blog in the Area of Family and Consumer Sciences for the Middle Peninsula


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Planning for Retirement, Part I

This week, we’ll discuss some questions and scenarios to get us thinking about saving for retirement!

Let’s start with a scenario.

Let’s say Aliyah saves $75 a month for retirement from age 18 to 28, then stops. If her retirement investments return 8%, she will have around $260,000 from just $9000 in contributions.

Now let’s say that Jason also saves $75 a month. However, he doesn’t start until age 28. He attempts to make up for this by savings all the way until age 65. Despite over $33,000 in contributions, close to four times as much as Aliyah, at 8% he will have around $200,000 in retirement savings, roughly $60,000 less than Aliyah.

This illustrates just how important saving early for retirement is in order to take advantage of cumulative growth.

Now let’s look at some data to see if people are saving for retirement early, like Aliyah in our scenario.

According to the 2016 Retirement Confidence Survey, by Employee Benefit Research Institute and Greenwald & Associates, while over 70% of employees age 35 and older are saving for retirement, only about half of employees between the ages of 25-34 have started, during the time period most beneficial for cumulative growth of retirement funds. Looking at more data from that survey, for those same employees ages 25-34 – less than 25% have at least $25,000 in savings and investments, and 60% have less than $10,000. In our earlier scenario, investing just $75 a month, and doing it for only ten years from age 18 to 28, Aliyah had over $25,000 in savings by age 35.

Part of this lack of savings may be a lack of planning. While the earlier years are so important for long-term retirement savings, the majority of young employees aren’t even thinking about it. Data from that same survey show that less than half of employees ages 44 and younger have begun figuring out how much money they’ll need to put aside to live comfortably in retirement. 

Over the next few weeks, we’ll discuss various terms, investment plans, how to calculate what you’ll need, and withdrawal strategies for retirement.


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[Replay] Ten Tips for Managing your Private Well Water Supply – Part II

This week, we’ll wrap up our replayed post on ten tips for managing your private well water supply. Check out our post last week for the first five!

  1. All water tests should be done by a certified lab. After you receive your results, compare them to the standards set for public systems by the EPA, which generally serves as good guidelines for private systems, and feel free to contact us if you have any questions!
  2. Inspect your well annually for any cracks, holes, or corrosion, and ensure your well cap is secure. Every three years, or if you suspect a problem sooner, have your well inspected by a licensed well drilling contractor with a Water Well and Pump classification. For a list of contactors who provide well inspections, check out Virginia Household Water Quality Program’s Wellcheck initiative linked below!
  3. Keep careful records of your well installation, maintenance, inspection, and all water tests.
  4. If a well on your property is no longer in use, have it properly abandoned by a licensed well contractor. Wells that are left unsealed or improperly abandoned can serve as a direct pathway for surface water to enter the groundwater supply, causing contamination. Remember, ground water is a shared resource!
  5. If you have a spring instead of a well, make sure the spring box is sealed to prevent contamination. Springs are very susceptible to contamination, so be sure to test your spring every year for coliform bacteria! Continuous treatment for bacteria is often required to ensure spring water is safe to drink.

If you’re interested in getting your well water tested, please check out the flyer below and contact Glenn Sturm (me!) at gjsturm@vt.edu or 804-815-9458!


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[Replay] Ten Tips for Managing your Private Well Water Supply – Part I

Over the next two weeks, we’ll replay ten tips for managing your private well water supply. This comes from a publication by Virginia Cooperative Extension’s Virginia Household Water Quality Program – for more information check out the this link!

  1. Make sure your well is properly constructed. Well casing should be 12” above the ground, with a sanitary, sealed well cap or secure concrete cover to prevent contamination from insects and surface water. Sanitary well caps for drilled wells often involve a two-piece cap with a rubber gasket, with vertical screws to hold the two pieces together and create a watertight seal. If you are unsure of your well construction, please check out Virginia Household Water Quality Program’s Wellcheck initiative linked here!
  1. Be sure the ground slopes away from your well to prevent surface water from pooling around the casing, which can cause contamination and damage your system.
  1. Ensure your well is at least 100 feet away from potential contamination sources, such as chemical storage, oil tanks, and septic tanks. If you have a septic tank, have it pumped regularly.
  1. Keep the area around your well clean and accessible. Make sure the area is free of debris, paint, motor oil, pesticides and fertilizers. Do not dump waste near your well or near sinkholes, as this may contaminate your water supply.
  1. Have your water tested once a year for total coliform bacteria, which will give an indication whether there is a likelihood of more dangerous bacteria present, like E. coli, that could potentially cause illness. If your total coliform and E. coli tests are done separately, consider doing the E. coli test if you have a positive total coliform test. Also, every three years, test for pH, total dissolved solids (TDS), nitrate, and other contaminants of local concern.

If you’re interested in getting your well water tested, please check out the flyer below and contact Glenn Sturm (me!) at gjsturm@vt.edu or 804-815-9458!


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The When, How, and What’s of Healthy Eating

This week, we’ll discuss the when, the how, and the what for eating healthy!

When should you eat?

In order to better control the amount you eat and avoid becoming too hungry between meals, the typical suggestion is to eat a meal roughly every 4-6 hours when you’re awake. People who skip meals or go long periods between meals will not only get hungry, but often crave and snack on high fat, high sodium, and/or higher sugar foods. Avoiding skipping breakfast is particularly important, with numerous studies linking skipping breakfast to a higher risk of obesity – losing the opportunity for a filling, nutrient-packed breakfast, and often replacing it with unhealthy snacking throughout the morning. If you do choose to snack, try and have healthy snacks available, like fresh fruits and vegetables or yogurt, and plan on set times for snacking to avoid mindlessly grazing the entire day.

How should you eat?

A number of studies point to not only portion sizes increasing over time, but when we’re presented with larger portions, we tend to keep eating even if we’re no longer hungry! To counter this, serve smaller portions on smaller plates and give yourself some time to see if you’re still hungry before potentially getting a second serving. Additionally, research has pointed to a connection between slower eating and lower calorie intake, increased feeling of fullness, less frequent snacking, and interestingly enough, more vivid memory and enjoyability of meals. To slow down your eating, take smaller bites and chew thoroughly. Put down your fork or spoon between bites, frequently taking a sip of water before picking it up again – which will also help with hydration!

What should you eat?

This is where the USDA’s MyPlate comes in. Based on recommendations from the US Dietary Guidelines, MyPlate suggests that half of your plate or meals should be non-starchy fruits and vegetables, while the other half makes up proteins and grains, with at least half of your grains being whole grains, and the majority of your proteins being lean meat or plant-based proteins to avoid consuming too much saturated fat. Additionally, be sure to get regular servings of low or non-fat dairy, and if you cannot or choose not to consume dairy, be sure to find an adequate source of calcium as a replacement. Try to avoid too much of the high sodium foods, and limit the consumption of sugary drinks that add empty calories.

That concludes our discussion, comment below if you have any questions or suggestions for future topics!


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Risk Management and Insurance Basics, Part XVI

This week, we’ll conclude our discussion on long-term care insurance.

How much does long-term care insurance cost?

According to the American Association for Long-Term Care Insurance, annual premiums purchased at age 55 average around $2000 a year, or $3000 for a couple. However, this can range from below $1000 to more than three times the average cost depending on a variety of features.

Premiums are generally paid for the rest of the policy holder’s life, but some policies allow premium payments for shorter periods, like 10 years. These policies, however, will generally have higher premiums.

Age is another factor that impacts premium cost – the later you get a policy in life, the more expensive the annual premiums will be. With that said, it’s typically not recommended to look into Long-Term Care Insurance until you’re in your mid-50s or else you may be paying those annual premiums for a very long time.

Many policies will state a benefit amount, often as a maximum amount per day. The higher the daily coverage, the more expensive the policy.

Many long-term care policies include waiting or elimination periods, the period you have to wait until receiving benefits. As we’ve discussed in previous weeks, the longer the elimination period, the lower the premium.

Many policies will have options for inflation protection, offering you an increase in maximum benefit amounts each year. The better protected your policy is from increasing long-term care costs, the more expensive the policy will generally be.

Does everyone need long-term care insurance?

At the risk of sounding like a broken record, whether or not long-term care insurance makes sense for you depends on your personal approach to risk management and your current financial situation. Those with few or no assets, and those who cannot afford long-term care premiums, may plan to apply for Medicaid coverage of long-term care cost and/or depend on family member for care taking. Those with very significant assets, who prefer to retain risk, may choose to self-insurance, paying any future long-term care expenses out of pocket. For others who can both afford the long-term care premiums and would prefer to transfer that risk, long-term care insurance may make sense.


That concludes our sixteen (!!) part discussion on insurance, feel free to go back and check out any of the previous parts you may have missed and let us know your thoughts and if you have any suggestions for future topics! gjsturm@vt.edu


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Risk Management and Insurance Basics, Part XV

Over the next two weeks, we’ll discuss long-term care insurance.

What is long-term care insurance?

Long-term care insurance is an insurance policy that helps cover the cost of home health care and nursing home stays. According to the U.S. Department of Health and Human Services, someone surviving to age 65 has about a 70% chance of needing long-term care as they age, with 24% requiring long-term care for more than two years.

You may be thinking, wait, won’t I have Medicare (a federal health insurance program for people 65 and older) when I retire? While it’s true that anyone 65 and older that has paid Medicare taxes for at least 10 years, which is part of the FICA taxes automatically taken out of your paycheck, will be eligible for Medicare, Medicare will often not pay for home health care or nursing home stays. Medicare may pay for “skilled” nursing care, however, more often than not, long-term care stays are considered “unskilled” or “custodial”. Medicaid, which is a public health insurance program for low income households, may pay benefits for nursing home stays at a Medicaid approved facility, however, this program is only eligible for those with few or no assets – with applicants only allowed their primary residence (up to a certain value), one vehicle, no more than $2000 in countable assets, and a few smaller exceptions.

With a long-term care policy, when am I eligible to receive benefits?

Required assessments are typically made prior to benefit payments. These assessments generally look for one of two things:

– Are substantial services required to protect the individual from threats to health and safety due to substantial cognitive impairment, such as late-stage Alzheimer’s disease?

– Is the individual unable to perform two of the seven “activities of daily living” for at least 90 days due to loss of functional capacity? These activities include eating, walking, moving from a bed to a chair, dressing, bathing, using a toilet, and bladder and bowel control issues.

We’ll return next week to conclude our discussion on long-term care insurance.


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[Replay] Three Things to Know about Well Water, Upcoming Well Water Clinic!

This week we’ll replay a previous post on three things to know about well water, and be sure to check out information on our upcoming Well Water Clinic!

1.  We’ve heard a lot about lead in drinking water in the last few years, but what you may not know is that it is incredibly rare for lead to be naturally found in groundwater. Instead, water that is either too low in pH and/or has other corrosive elements, is leaching lead from plumbing components. Water doesn’t have to be all that corrosive or acidic to leach metals from your plumbing either; it’s generally recommended that drinking water have a pH above 6.5 to prevent corrosion, which means regular rain water, for instance, is more than acidic enough to leach metals from your pipes! Now you may be thinking, ‘I don’t have an older home and I don’t have lead pipes, this shouldn’t be a concern for me.’ However, lead solder was allowed in homes until 1986, and “lead-free” brass fittings and fixtures could have up to 8% lead in them until 2014, when new regulations reduced the allowable level to 0.25%.

2.  There are quite a few different sources of potential contaminants to drinking water; surface contaminants could be getting into your drinking water, especially if the well head or grouting is not well maintained, metals could be leached from your plumbing, sodium may be added from your water softener, and many contaminants come naturally from the groundwater if they aren’t addressed with treatment devices.

3.  How often should you test your drinking water? Generally, it’s recommended to test for bacteria annually, and do more comprehensive tests every three years or so, including testing for pH, total dissolved solids and other local concerns. Testing is particularly important since some of the contaminants most detrimental to your health, like E. coli, nitrates, and lead, may be at high enough levels to cause serious health issues without you ever noticing a different smell, taste, or appearance.

If you’re interested in getting your well water tested, please check out the flyer below and contact Glenn Sturm (me!) and gjsturm@vt.edu or 804-815-9458!


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Risk Management and Insurance Basics, Part XIV

This week, we’ll discuss umbrella insurance.

Unlike most of the insurances from our previous weeks, many people are unfamiliar with umbrella insurance.

Umbrella insurance provides supplemental liability insurance. As an example, let’s say you cause a bad 10-car pileup. Let’s say you have $500,000 in liability coverage through your auto insurance policy. If you’re liable for $800,000 of injuries to the other drivers and passengers, while your policy will cover the first half a million dollars, what about the other $300,000? If you have no umbrella insurance, you would be personally liable! Umbrella insurance can provide supplemental liability coverage to auto, home, and other liability insurances, as well as some policies providing coverage for liability related to libel, slander, false imprisonment, boat or aircraft accidents, and damages caused on another’s property. Liability coverage for service on a non-profit board may be covered as well.

Typically, insurance companies will require you to have certain minimum coverage amounts for your auto and home liability insurance policies. For instance, it’s not uncommon for an umbrella insurance policy to require you to have at least $300,000 or $500,000 of liability coverage on your auto insurance policy.

Umbrella insurance is generally sold in increments of $1,000,000 of coverage, with the first million dollars generally costing $150-$400 a year.

Should everyone have umbrella insurance? This largely depends on your risk management preferences – while liability claims above the maximum available coverage for auto and home insurance policies are rare, they do happen. There are also other considerations depending on your personal situation. Do you have significant assets that you’d like to protect in the event of an expensive lawsuit? Are you at a higher risk of being sued? Unfortunately, higher earning careers, like doctors and professional athletes, are more frequently targets of lawsuits. Are there other liability risk factors like renting out your property, having a trampoline, pool, or hot tub, frequently hosting large parties, or having teenage drivers in the household?

If you do decide to purchase umbrella insurance, be sure to shop around and be sure the policy covers what you need it to cover. Check if you’re able to receive significant discounts by bundling with a current insurance property policy.

That concludes our discussion on umbrella insurance, next week we’ll return and discuss long-term care insurance.


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Risk Management and Insurance Basics, Part XIII

This week, we’ll wrap up our discussion on disability insurance.

Should everyone have disability insurance? That depends. For one, it depends on your preference as it relates to risk management – do you want to insure against this risk, protecting your household from a potential loss of income, or retain those risks and avoid paying premiums? It also depends on your current financial situation. Do you have enough in non-retirement savings to cover the loss in income? Do you have assets that you’d be willing to sell to make ends meet? Is there another employed spouse in the household that earns enough to comfortably live with just their income?

If you do decide to get disability insurance, here are a few things to consider.

For long-term disability insurance, the longer the elimination period, the lower the premium. With that said, be sure you have adequate non-retirement savings to cover your household expenses during that elimination period.

If you are going through a divorce and the ex-spouse is expected to pay child support and/or alimony, consider requesting in the divorce decree that they buy disability insurance to protect those support payments.

There are a number of features you can add to your policy, but remember, virtually all of them will make that policy more expensive. Selecting a non-cancellable policy means the insurer cannot cancel the policy, raise the premium, or decrease the benefits. Generally, long-term disability insurance covers 50-70% of net income. Some insurance companies will provide options to increase the benefit amount if you don’t think that’ll be enough to support your household. If the policy has residual benefits, that means they’ll provide you partial benefits if you’re still at your job but unable to work at full capacity. For instance, if a disability results in you working 20 hours instead of 40, a disability insurance policy with residual benefits may provide you 50% of the policy benefit amount. A cost-of-living-adjustment rider, or COLA, allows for your benefits to increase with inflation. A waiver of premium rider means the insurance company will not charge you for premiums if you become disabled, though how that’s implemented and for how long differs from policy to policy. Lastly, a recurrent disability clause means the policy will waive your elimination period if you become disabled soon after a previous disability period, if it’s from the same injury or cause. Generally, policies will have a limit on time between these two disability claims, often six months, for the policyholder to be eligible for the recurrent disability.

That concludes our discussion on disability insurance, we’ll return next week to discuss umbrella insurance.


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Risk Management and Insurance Basics, Part XII

Over the next two weeks, we’ll return and discuss disability insurance.

Statistics on disabilities can be more sobering than many of us realize. According to the Social Security Administration, more than one in four 20-year-olds are expected to become disabled before reaching retirement age, and roughly one in five Americans, at over 50 million, are currently living with a disability.

One option to address this concern is through disability insurance. Disability insurance is generally either short-term or long-term. Short-term disability coverage generally lasts between three to six months, with very short elimination periods (the period you have to wait until receiving benefits), typically only a couple days to a couple weeks. Long-term disability coverage lasts considerably longer, anywhere from 2, 5, 10 years or up until retirement. However, long-term disability also tends to have a much longer elimination period, generally around 3-6 months or longer, which is why some policy holders and employers combine short-term and long-term policies.

Another consideration is “own occupation” vs “any occupation.” Any-occupation coverage will cover you if you’re unable to work in a job that is reasonably suitable for you given your education, experience, and age. The key with these policies is whether or not the disability prevents the policyholder from performing a job which they are reasonably qualified for. For instance, if a surgeon were to badly injure their hand, but continued to work in the medical field in a non-surgical position, they may not qualify for any-occupation disability benefits. However, if the injury was severe enough to prevent them from functioning professionally in the medical field at all, they would likely qualify. Own occupation does not have these specific requirements – instead, if the insurance holder is unable to perform the duties of their specific occupation, they will generally qualify for disability benefits. Going back to the earlier example, if a surgeon injures their hand and is no longer able to perform surgery, instead taking a lower paying non-surgical medical position, they would likely qualify for benefits from an own occupation disability policy. With that said, disability insurance policies will often limit the benefits if you are employed at another job, even for some own occupation policies. They may, for instance, limit the benefit so that your combined disability benefits and current income are not more than your previous income.

What’s the trade-off? For the added flexibility and coverage, you will typically pay more for an own occupation disability policy than an any occupation policy with the same benefit amounts and length of benefits. Which of these option makes more sense for you will depend on how specialized your job is, the income level for your current job vs. other jobs you would be qualified for and potentially be able to do with a disability, what you’re willing or able to afford in a disability policy, and your personal preferences for risk management. Next week, we’ll wrap up our discussion on disability insurance.