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This Memorial Day week, I wanted to share a few things that have collected in my “blog file” that may not justify a whole blog individually but are still well worth sharing.

Long Term Care Premiums on the Rise

The long-term care insurance industry has experienced quite a bit of pain in recent years.  An incredibly difficult product to price, benefit-rich policies sold over the first 30 years or so of the product’s existence turned out to be extremely underpriced in a number of ways, leading many insurance companies to raise premiums significantly or get out of the business entirely.

Just as it looked as though the industry was finding some equilibrium, a recent Wall Street Journal article highlighted the most recent attempt to raise premiums, this time by Mass Mutual, one of the few big players still left in the long-term care space and virtually the only one that had held out from making significant premium adjustments in recent years.

The price for the hold out is steep.  As the article reports, Mass Mutual is seeking increases of up to 77% per customer on 75% of their policyholders.  There are choices, including maintaining current premiums or accepting a smaller increase in premiums in exchange for reduced benefits.

If you hold a Mass Mutual or any long-term care policy and receive this kind of notice, please don’t hesitate to let us know.  We’re happy to help weigh the potential tradeoffs and help evaluate next steps.

Ohio 529 Plans

One of the changes to tax law that slipped under many Ohio taxpayers’ radars at the start of the year was the increase in the allowed state income tax deduction for 529 contributions.  Per this article from College Advantage, the Ohio Tuition Trust Authority’s 529 plan, the yearly deduction doubles from $2,000 to $4,000 per beneficiary per year.  The unlimited carry forward of this benefit remains in place as well.  If you have questions on if or how this might impact your college savings for a child, grandchild or other loved one, please let us know.

Yanny vs. Laurel

In our rapid fire information world, this social media supernova already seems like old news, but in case you missed it, a week or two ago, the internet went uber-viral over people arguing whether they heard “yanny” or “laurel” in a short sound bite.  A clip of the original sound bite can be found here.  Perhaps more interesting is this clip the New York Times published, allowing listeners to skew the audio file towards one side of the spectrum or the other to help listeners find the critical point where their ear catches one dominant sound versus the other.

I share this not to ensure you’re staying up on the latest in viral internet fads, but because of some thinking it spurred after I read this article from the Wall Street Journal.  The article included some thoughts from UC San Diego psychology professor Diana Deutch, who says people subconsciously bring “a lot of themselves” to what they see and hear.  She referenced this phenomenon along with the striped dress viral thread from a few years ago where people saw completely different colors from the same pictures based on a number of factors.

This rang true to me in a big way as it relates to the world of personal finance.  Our experiences, our senses, our relationship with money and how taking risk, spending, saving make us feel are all deeply rooted and hard wired in each of us.  By the time we reach the point of having to make important financial decisions, there is much about this wiring that we cannot change.

Part of our job as financial planners is to bring awareness to those biases and tendencies and help clients frame a much more transparent picture of certain life decisions revolving around money than they otherwise might be able to see on their own.  Whether you’re team yanny or team laurel, when it comes to your life and your money, we’re here to listen.

We hope you all had a very happy Memorial Day weekend and enjoy the start to your Summer.  Have a great week!