Continuing the fight for the Conflict of Interest Rule.

Over the past few years, Financial Engines has been a vocal supporter of The Conflict of Interest Rule, which requires investment advisors who provide retirement advice to clients to serve as fiduciaries. This means they must place their clients’ interests ahead of their own.

Last week, we submitted another formal comment letter to the U.S. Department of Labor, providing our thoughts on recent efforts designed to delay or weaken the Rule. Financial Engines has always served as a fiduciary, and consistent with past input, we shared our view that the Rule should be retained in the strongest possible form. Americans deserve no less.

Financial Engines believes that all investors — not just the wealthy — deserve access to high-quality, independent financial help they can trust. The bottom line is that we believe that the Conflict of Interest Rule is good for Americans and should be kept in place. You can count on us to continue to fight for our clients.




Protect yourself against identity theft.

Whether they’re snatching your purse, diving into your dumpster, stealing your mail, or hacking into your computer, they’re out to get you. Who are they?

Identity thieves.

The headaches that identity thieves can cause is well documented: They can empty your bank account, max out your credit cards, and open new accounts in your name. They can use your credit to buy furniture, cars, and even homes.

You may never be able to completely prevent your identity from being stolen, but there are some steps you can take to help protect yourself.

Check yourself out.

It’s important to review your credit report periodically — and you can get your report for free once a year. Check to make sure that all the information contained in it is correct, and be on the lookout for any fraudulent activity.

Secure your number.

Your most important personal identifier is your Social Security number (SSN). Guard it carefully. Never carry your Social Security card with you unless you’ll need it. The same goes for other forms of identification (for example, health insurance cards) that display your SSN. If your state uses your SSN as your driver’s license number, request an alternate number.

Don’t have your SSN preprinted on your checks, and don’t let merchants write it on your checks. Don’t give it out over the phone unless you initiate the call to an organization you trust. Ask credit reporting agencies to abbreviate it on your credit reports. Try to avoid listing it on employment applications — instead, offer to provide it during a job interview.

Don’t leave home with it.

Most of us carry our checkbooks and all of our credit and debit cards with us all the time. That’s a bad idea. If your wallet or purse is stolen, the thief will have a treasure chest of new toys to play with.

Carry only the cards and/or checks you’ll need for any one trip. And keep a written record of all your account numbers, credit card expiration dates, and the telephone numbers of the customer service and fraud departments in a secure place at home.

Keep your receipts.

As you know, you get a receipt when you make a purchase with a credit or debit card. Don’t throw it away or leave it behind because it may contain your credit or debit card number. And don’t leave it in the shopping bag inside your car while you continue shopping. If your car is broken into and the item you bought is stolen, your identity may be as well.

Save your receipts until you can check them against your monthly credit card and bank statements, and watch your statements for purchases you didn’t make.

When you toss it, shred it.

Before you throw out any financial records such as credit or debit card receipts and statements, cancelled checks, or even offers for credit you receive in the mail, shred the documents. If you don’t, someone may be able to steal your identity simply by going through your trash.

Keep a low profile.

The more your personal information is available to others, the more likely you are to experience identity theft. While you don’t need to become a hermit in a cave, there are steps you can take to help minimize your exposure:

-To stop phone calls from national telemarketers, list your phone number with the Federal Trade Commission’s National Do Not Call Registry online at remove your name from most national mail and e-mail lists, as well as most telemarketing lists, register online with the Direct Marketing Association at

-When possible, opt out of allowing financial institutions to share your financial information with other organizations. This includes your bank, investment firm, insurance company, and credit card companies. You can update your preferences online for many of these accounts.

Take a byte out of crime.

Whatever else you may want your computer to do, you don’t want it to inadvertently reveal your personal information to others. Take steps to help keep that from happening.

Install a firewall to prevent hackers from obtaining information from your hard drive. This is especially important if you use a high-speed connection that leaves you continuously connected to the Internet. In addition, install virus protection software and update it on a regular basis.

Try to avoid storing personal and financial information on a laptop. If you must store personal and financial information on your laptop, be sure to protect these files with a strong password. It should be six to eight characters long and contain upper and lower case letters, numbers, and symbols.

Opening e-mails from people you don’t know, especially if you download attached files or click on hyperlinks within the message, can be dangerous. You could be exposed to viruses and your computer could be susceptible to “spyware,” which captures information by recording your keystrokes. You could also be led to “spoofs,” which are websites that replicate legitimate business sites and are designed to trick you into revealing personal information that can be used to steal your identity.

If you want to visit a business’s legitimate website, use your stored bookmark or type the URL address directly into the browser. If you provide personal or financial information about yourself over the Internet, do so only at secure websites. To determine if a site is secure, look for a URL that begins with “https” (instead of “http”) or a lock icon on the browser’s status bar.

And when it comes time to upgrade to a new computer, remove all of your personal information from the old one before you throw it out. Using the “delete” function isn’t sufficient to do the job; overwrite the hard drive by using a “wipe” utility program. The minimal cost of investing in this software may save you from being wiped out later by an identity thief.

Be diligent.

As the saying goes, “Be careful out there.” The identity you save may be your own.


Part of this content has been contributed by Broadridge Investor Communication Solutions, Inc.

Your identity has been stolen. What now?

You’ve read about it, and you thought it would never happen to you. But suddenly your bank account is empty, your credit card bills are through the roof, and you’re getting late notices for accounts you don’t own. What should you do?

Time is money.

To minimize your losses, act fast. Contact, in this order:

-Your credit card companies.

-Your bank.

-Credit bureaus.

-Local, state, or federal law enforcement authorities.

First stop: Credit card companies.

Credit card companies are getting better at detecting fraud. In many cases, if they spot unusual activity, they’ll call you to confirm that you made the charges. But the responsibility to notify them of lost or stolen cards is still yours.

If you notify them within 30 days after you discover the loss, you won’t be responsible for more than $50 per card in fraudulent charges. Ask that the accounts be closed at your request, and open new accounts with password protection.

If an identity thief opens new accounts in your name, you’ll need to prove it wasn’t you who opened them. Ask the creditors for copies of application forms or other transaction records to verify that the signature on them isn’t yours.

Finally, follow up with letters that include the date you reported the loss or theft. Watch your monthly statements from the creditor and if any fraudulent charges appear, contest them in writing.

Next up: Your bank.

If your debit (ATM) card is lost or stolen, you won’t be held responsible for any unauthorized withdrawals if you report the loss before it’s used. Otherwise, how much you’re on the hook for depends on how quickly you report the loss. In general:

-If you report the loss within two business days after you notice the card is missing, you’ll be held liable for up to $50 of unauthorized withdrawals. However, if the card doubles as a credit card, you may not be protected by this limit.

-If you don’t report the loss within two days after you notice the card is missing, you can be held responsible for up to $500 in unauthorized withdrawals.

-If you don’t report an unauthorized transfer or withdrawal that’s posted on your bank statement within 60 days after the statement is mailed to you, you risk unlimited loss.

Keep in mind that policies vary from bank to bank, so make sure you understand your specific bank’s rules and timelines.

If your checkbook is lost or stolen, stop payment on any outstanding checks, then close the account and open a new one. Dispute any checks not written by you. This can help keep money from being taken out of your bank account or from collections agencies coming after you (and damaging your credit) if a merchant tries to cash a bad check after your account is closed.

Now place a fraud alert on your credit report.

If your credit cards have been lost or stolen, and you think someone is using your identity, you can place an initial fraud alert on your report. This alert will remain on your account for 90 days.

If you know with certainty that someone has stolen your identity by using an existing account fraudulently or opening a new account in your name, you can place an extended fraud alert on your credit report. This type of alert stays on your report for a full seven years. However, you’ll have to file a report with a law enforcement agency first.

Once a fraud alert has been placed on your credit report, anyone who checks it is required to verify your identity before extending any existing credit or issuing new credit in your name. For extended fraud alerts, this verification process must include contacting you personally by phone.

Most states also allow you to “freeze” your credit report. Once you freeze your report, no one — creditors, insurers, and even potential employers — will be allowed access to your credit report unless you authorize it.

To freeze your credit report, you must contact all three major credit reporting agencies. In many cases, those affected by identity theft are not charged a fee to freeze and/or thaw their credit reports, but the laws vary from state to state. Contact the office of the attorney general in your state for more information.

If you discover fraudulent transactions on your credit reports, contest them through the credit bureaus. Do it in writing, and provide a copy of the identity theft report you file. You should also contest the fraudulent transaction in writing with the merchant, bank, or creditor who reported the information to the credit bureau.

But don’t stop there. Follow up to make sure that your report has in fact been corrected, and continue to monitor your report for any new suspicious activity.

Last stop: Law enforcement agencies.

Finally, you should file a report about the theft with a federal, state, or local law enforcement agency. Once you’ve filed the report, get a copy of it — you’ll need it to file an extended fraud alert with the credit bureaus. You may also need to provide it to banks or creditors before they’ll forgive any unauthorized transactions.

When you file the report, give the law enforcement officer as much information about the crime as possible. Include the date and location of the loss or theft, information about any existing accounts that have been compromised, and information about new credit accounts that have been opened fraudulently. Write down the name and contact information of the investigator who took your report so you can give it to creditors, banks, or credit bureaus that may need to verify your case.

In addition to law enforcement, you may need to follow up with other government agencies depending on how you were affected.

-If the theft of your identity involved any mail tampering (such as stealing credit card offers or statements from your mailbox, or filing a fraudulent change of address form), notify the U.S. Postal Inspection Service.

-If your driver’s license has been used to pass bad checks or carry out other forms of fraud, contact your state’s Department of Motor Vehicles.

-If you lose your passport, contact the U.S. Department of State.

-Finally, if your Social Security card is lost or stolen, notify the Social Security Administration.

Follow through.

Once they’re initially resolved, most identity theft cases stay resolved. But stay alert: Monitor your credit reports regularly, check your monthly statements for any unauthorized activity, and be on the lookout for other signs (such as missing mail or debt collection activity) that someone is pretending to be you.

Identity theft is something we all hope to avoid, but remains a common threat.  By taking the proper steps and staying vigilant, you can recover and restore order to your finances.


Part of this content has been contributed by Broadridge Investor Communication Solutions, Inc.

Comparing Health Savings Accounts and Flexible Spending Accounts.

It’s no secret that health care is expensive. According to a recent study, a 65-year-old couple will pay $407,253 (which is $607,662 in future dollars) for total lifetime health care costs.1 Clearly, medical bills are a major expense category in most household budgets. It pays to look for ways to manage these expenses.

One strategy is to use tax-advantaged dollars to pay for medical costs. Two popular options are flexible spending accounts (FSAs) and health savings accounts (HSAs). Both types of accounts let you save a portion of your income before taxes to pay for qualified health expenses such as co-pays, deductibles and prescription drugs. FSAs and HSAs have different eligibility rules, benefits, and restrictions, however. Pay close attention to the details to determine which one might be best for your needs.

Flexible spending accounts.

An FSA is essentially an employer-sponsored benefit that helps pay for medical expenses. During open enrollment period, you commit to contribute a certain dollar amount to your FSA for the upcoming year. For 2017, the maximum amount you can choose is $2,600. The company puts the full amount you selected into your FSA on January 1 — and then you pay it back with automatic deductions from your paycheck over the rest of the year.

Contributions to your FSA are pre-tax, like the money you put into your 401(k). This gives you two benefits. First, you’re paying for qualified health care expenses for yourself, your spouse and your eligible dependents with pre-tax dollars — which also reduces the amount of taxes taken out of your paycheck.

Note, however, that if you don’t spend all the money in your FSA by year-end, you may have to give up what’s left over. Some employers will allow you to roll over $500 to the following year or give you a 2.5 month “grace period” to spend anything left — but neither of these are guaranteed, so be sure to check the terms of your company’s FSA plan. Also, if you leave your job during the year, you may lose any unspent FSA funds, depending on the terms of your employer’s plan.

One advantage of an FSA is that your total contribution amount becomes available for spending on January 1 because your employer puts in the full amount at the beginning of the year. Let’s say you committed $2,600 to your FSA during open enrollment. You could spend the entire $2,600 in the first month of the year even though you’ve only paid back a small part of that amount. This could be a big help if you have a major medical procedure scheduled in January, for example.

Health savings accounts.

An HSA is a personal savings account earmarked for healthcare expenses. Unlike an FSA, you own and control the money in your HSA. You may also be able to invest the money in your HSA just like you would a 401(k) or IRA – which is also different from an FSA. Plus, you can take the balance with you if you leave your employer. You can also put more money into an HSA — up to $3,450 a year for individuals or $6,900 a year for families in 2018.

There’s no deadline for spending HSA funds. Each year’s contributions can be rolled over to the next year. For this reason, some people fund an HSA during their working years and use the money to pay for medical expenses in retirement, when they’ll need it the most. Since money in an HSA may be invested and isn’t tied to an employer, it can grow over time and be useable whenever you need it — whether it’s during your working years or in retirement.

Taxes are another major advantage of HSAs. They offer a triple advantage:

-Contributions can reduce current taxes.

-Investment earnings grow tax-deferred.

-Withdrawals (which include both contributions and earnings those contributions have made) are tax-free if used for qualified medical expenses.

So, what’s the catch? Notably, not everyone can open an HSA. To be eligible, you must be enrolled in a high-deductible health insurance plan. Specifically, in 2018, your deductible must be at least $1,350 for individual coverage or $2,700 for family coverage.

Understanding the differences.

These accounts can save you a lot of money if you use them wisely. But you generally have to choose between them. If your employer allows it, you may be able to open a limited purpose FSA along with your HSA — but it can only cover dental and vision services not already covered by your HSA. So essentially, you have to decide which one to focus more of your resources and attention on. Take a look at the differences in the comparison table below to help decide which type of account fits your lifestyle, health care spending and long-term financial planning needs.

Flexible Spending Account


Health Savings Account


Eligibility • Determined by the employer offering the FSA.

• Not available to self-employed people.


• Any person under age 65 with a qualifying high-deductible health insurance plan, including self-employed people, can open an HSA.

• Minimum insurance deductibles in 2018:

• $1,350 for individual plan.

• $2,700 for family plan.

Contributions • Maximum for 2017:

• $2,600 (employers may set a lower maximum).

• Must commit to a total contribution for the year (up to the maximum) during open enrollment.

• Repayments are spread out across the year and automatically deducted pre-tax from each paycheck.


• Maximums for 2018:

• $3,450 for individual insurance plan.

• $6,900 for family insurance plan.

• Contribute any amount up to the maximum at any time during the year.

• Employer may also make contributions.

Account ownership Employer Employee
Changes Generally, no changes to selected contribution amount are allowed – some employers make exceptions for a change in family or employment status. Contributions can be changed any time as long as they don’t exceed the yearly maximum.
Withdrawal timing • Withdrawals can be made at any time.

• The full contribution commitment is available for withdrawal starting January 1.

Withdrawals from the current account balance can be made at any time.
Tax advantages • Pre-tax contributions may lower current income taxes.

• Withdrawals are tax-free if used for qualified medical expenses.

• Pre-tax contributions may lower current income taxes.

• Investment earnings grow tax-deferred.

• Withdrawals are tax-free if used for qualified medical expenses.

Investment growth potential Contributions may not be invested and do not earn interest. • Once you have a certain amount saved, contributions may be invested in mutual funds, stocks, bonds and other investments that can produce earnings.

• Investment earnings are tax-free if used for qualified medical expenses.

Unspent funds Must spend the total contribution commitment by end of year or you will lose the money. However, your employer may allow for a $500 rollover or 2.5 month grace period option. Unspent funds can be kept in the account year after year, even if you change employers.


Making your decision.

Still not sure what’s best for you? Ask yourself the following questions:

Is a High-Deductible Health Plan right for me and my family? It’s a requirement if you’re considering an HSA, but you need to be prepared to cover medical expenses up to the deductible. Planning your HSA contributions wisely can help protect you from unexpected expenses.

How will I pay for healthcare in retirement? If you don’t have a plan in place, having an HSA can be an invaluable part of your financial plan to pay for health care expenses once you retire. An FSA is only helpful for the short term

What health care expenses are on the horizon for me and my dependents? If you have short-term medical needs, an FSA can help cover those expenses up front at the beginning of the year. However, if you’re not enrolled in a high deductible health plan, your monthly health insurance premiums will most likely take a bigger bite out of your paycheck. And if you don’t anticipate having a lot of health care needs in the year ahead, that means you could be paying for coverage you don’t need

Will my employer make contributions to either of these accounts? Some employers will encourage you to participate in one or both accounts by making additional contributions based on certain criteria that’s specified in your plan. In some cases, an employer could make contributions to employees with an HSA, but not employees with an FSA. Be aware, however, that your employer may have certain requirements, such as a health screening, before they make contributions to either account. Do your homework to understand how your plan works and if there’s more money at stake than what comes out of your own paycheck.

Health care can be pricey — but FSAs and HSAs can help make the most out of your money and cover health care expenses in a cost-effective way. Research your options and run calculations to determine if an FSA or HSA makes sense for you. Planning ahead for health care costs can go a long way in setting you up for overall financial success both now and down the road.

1 2017 Retirement Health Care Costs Data Report. HealthView Services. Retrieved September 11, 2017, from

How to use your open enrollment period to save more for retirement.

That special time at work is nearly upon us: Open enrollment period! Every September, October, and November, workers across the country sift through a sea of forms to select their benefit options for the year ahead. Most of the attention goes to various health insurance policies. But you can use open enrollment period as an occasion to think through your retirement savings plan as well.

Are you saving enough?

Investment returns go up and down. Financial markets and the global economy ebb and flow. There’s not much you can do about either of those things. The amount you contribute to a retirement savings plan like a 401(k) or IRA, however, is in your hands.

But how much is enough?

The answer is different for each person. There’s a simple place to start, however — and that’s with the company match.  If your employer matches your 401(k) contribution, put enough money into your account to get the full match. Doing this can help as you work to reach your financial goals. In fact, a recent study we conducted found that one in four employees don’t save enough to get their full company match. On average, those who didn’t save enough to get the full company match left $1,336 of free money on the table each year.1

Save even more.

Already maxing out your employer’s match? Good. Now it’s time to gradually increase your contributions. Many plans offer a way to boost contributions automatically on a schedule you set, whether it’s monthly, quarterly, or annually. Even saving 1% more every year can help make a big difference in your account balance after 10 or 20 years.

If saving more in your company’s plan isn’t an option, you could start driving your dollars into another account, like a traditional IRA or Roth IRA. One of the main differences between a traditional IRA and a Roth IRA has to do with when you pay the taxes on your contributions.

With a traditional IRA, you make contributions directly to your IRA custodian, who will hold and invest your money according to your instructions. Depending on your income level, you may be able to deduct some contributions from your annual income tax bill when you file taxes for the year. Know, however, that there are limits on how much you can deduct each year.

Keep in mind that you’ll be taxed on any distributions from a traditional IRA if you previously claimed those dollars as a deduction. However, consider whether you expect to be in a lower tax bracket once you retire, as this could help you pay less in taxes on this money than if you had to pay taxes now.

If you qualify for a Roth IRA (which depends on how much you bring home each year), you can make your contributions with after-tax dollars, which means you’ll pay your taxes up front. When you make withdrawals from the account in retirement, you won’t pay taxes on your contributions or their earnings, as long as the withdrawals meet certain requirements.

Getting advice could help.

The same report we mentioned earlier had another interesting finding: Employees across all age and income levels who use advisory services are less likely to miss out on their employer match compared to employees not getting any advice.

A recent study from the Life Insurance and Market Research Association (LIMRA) echoed our findings. Key takeaways from the LIMRA study include:

-Households using financial advisors are three times as likely to have $250,000 or more in retirement savings.

-They’re also twice as likely to have $100,000 or more compared to households not using a professional advisor.2

This open enrollment period, think beyond the health insurance policy basics. Use this time to reconsider your retirement savings strategy and figure out how to drive more dollars into your retirement savings accounts. Not sure where to begin? Consider reaching out to a financial advisor. It could help make a difference in your future.


1 (May 2015). Missing out: How much employer 401(k) matching contributions do employees leave on the table? Financial Engines. Retrieved September 5, 2017, from
2 (May 2015). Matters of Fact – Consumers, Advisors, and Retirement Decisions (and Results). Life Insurance and Market Research Association. Retrieved September 5, 2017, from

Is homeownership on the horizon? Here’s how to grow your down payment.

Owning a home remains an important part of the American Dream for many people. But homeownership isn’t the reality for a lot of Americans. According to a recent report, there are more renters in the United States today than there have been in the past 50 years. The report notes that the majority of Americans under 35 (65%) are renting. It also reveals that rental rates among 35-44-year-olds have increased significantly since 2006.1

So how can you get there? While many things can affect your choice to rent or own, one of the biggest hurdles to homeownership is usually financial. If you’re a renter looking to become a homeowner, it’s a good idea to build your down payment nest egg now, and set it up to grow.

How much to save?

It’s generally recommended that you put a 20% down payment on a home. This can help lock in a lower monthly mortgage payment. It can also save money on interest and insurance in the long run.2

Accumulating the money to cover a 20% down payment, however, requires some planning that doesn’t stop with putting money aside each paycheck. Depending on how soon you plan to buy, you’ll want to make sure you have access to your money when you need it. You’ll also reach your goal faster if your savings can grow along the way. Here are some ways to pick up the pace.

Direct your dollars into a money market account or high-interest savings account.

Finding a place to park your short-term savings and earn a decent return is particularly challenging given that interest rates are at historic lows. It’s worth searching out accounts that offer higher-than-average interest rates — which can keep your money working harder for you. Plus, with these types of accounts, your money will still be accessible to you when you need it.

If your homeownership runway is a little longer, consider a certificate of deposit (CD).

CDs are savings certificates with a fixed interest rate and maturity date. These conservative investments can be suitable if you won’t need access to your funds until after the maturity date, which can be three to five years. Keep in mind that there are penalties for early withdrawal — so choose your timeframe and terms wisely.

Investing your money in the stock market could also be a good option.

Keep in mind, however, that stocks are riskier than CDs, money market accounts, or other high-interest savings accounts. You might make more money if you put your dollars into the stock market — but you could lose a good amount, too. You’ll also want to consider the tax implications of investing if you don’t expect to keep your money in the market very long.

Homeownership is a major life step and accumulating enough savings to make it happen can be a tall order. Taking a strategic approach to how and where you save, however, can help turn your homeownership dream into a reality.


1 More U.S. households are renting than at any point in 50 years. Pew Research Center. Retrieved on July 24, 2017 from
2 Why is 20% ideal for a down payment? Retrieved on July 24, 2017 from

Should long-term care insurance be part of my financial plan?

Fall is right around the corner — and that means open enrollment season is almost here, too. When you think about the benefits choices you’ll make this year, is long-term care insurance (LTCI) on your list?

Before investing in LTCI on your own or through your employer, it’s important to understand how it all works and decide whether it’s right for you.

What is long-term care?

Long-term care (LTC) generally means an extended stay in a nursing home or assisted living facility. It also includes home health care. It’s usually used by people over age 65 who need ongoing health support and treatment for chronic health conditions or disabilities.

What is LTCI?

LTCI works like most other insurance policies. You make monthly payments to the company that’s providing it, and when you need LTC support, your policy helps cover those costs.

How do LTC and LTCI work?

Unless you qualify for Medicaid, you’ll need to buy a long-term care insurance policy or pay for LTC expenses out of pocket. And those costs are something to be prepared for.

When you buy LTCI, you can choose the benefits you want included in your policy — which can help you to only pay for what you can afford. Some of the options you’ll need to consider include:

  • Your daily coverage amount.
  • The length of time you’ll be able to receive benefits.
  • The lifetime maximum dollar amount you can receive.
  • Inflation protection features.

Once you have your policy, you generally become eligible for benefits if you’re unable to perform two out of six “activities of daily living,” or ADLs. ADLs are dressing, eating, toileting, getting in and out of a bed or a chair, managing incontinence, and bathing. You also qualify if you suffer from dementia or another cognitive disability such as Alzheimer’s disease.1

How much does LTC and LTCI cost?

Before you decide on an LTCI policy, you’ll need to understand the costs of LTC. The annual median costs of long-term care in 2016 ranged from about $46,000 for a home health aide to $92,000 for a private room in a nursing home.2 Think carefully about how much LTC support you’ll need — because if you need care that your policy doesn’t provide for, you’ll have to pay the difference out of pocket, which can substantially affect your savings. For this reason, you may want to look for a policy that has flexible options.

When it comes to the price of policies, it varies depending on benefits that are covered, your insurance provider, your age, your health, and where you live. As a point of reference, however, for a couple both aged 60 in standard health, the average cost of an LTCI policy ranged from $1,920 to $3,560 in 2016.3

Decisions, decisions.

So, is LTCI right for you? That’s a personal decision, of course, but here are a few factors that may help you decide:

  • Your age and health. It’s general practice for insurance companies to increase premiums for older and less healthy applicants. For this reason, it’s a good idea to consider purchasing your policy when you’re younger if you think you may need LTC later in life. If you’re healthy, you may not think you need LTCI. But it may actually make sense for you because you could live longer than others who are not quite so healthy. And the longer you live, the more likely you are to need long-term care later in life.
  • Your family medical history. Look at the longevity and health of your family members to help gauge your care needs in your later years. You can learn a lot from your parents, siblings, aunts, and uncles.
  • How much you can afford. Like other types of insurance, many LTCI policies allow you to dial up or dial down the benefits you want, which affects the cost of your policy. That flexibility is helpful — some coverage is better than none in many cases. But the lower you go, the more you may have to pay out of pocket if and when you need your benefits.
  • Impact on your loved ones. More than 43 million Americans each year provide some form of LTC for their loved ones.4 If you need LTC, do you know if a family member will help? If so, you may want to think about the emotional and financial impact your decision could have on family members when deciding whether to buy LTCI. It can help to ease the burden for your loved ones and give you more options for how you’ll get the care you need. It may also help enable you to maintain some of your independence.
  • Your gender. LTCI policies for women are generally costlier than policies for men. This is because women tend to live longer.5 As a result, women are more likely to make long-term care insurance claims.

Investing in LTCI isn’t an easy decision, but it’s one worth looking at, especially during open enrollment season. While we don’t offer LTCI at Financial Engines, we can help you as you talk with your insurance provider and/or employer to figure out if it’s right for you.

Having an LTCI policy may give you peace of mind and help you through some of those ‘you just never know’ situations that seem to spring up in later years. Think about your future needs, talk with your loved ones, and understand the details of how it all works to decide whether LTCI should be part of your financial plan.


1, 2, 5 Marquand, B. (June 22, 2017). Long-Term Care Insurance Explained. Nerd Wallet. Retrieved August 3, 2017, from
3 (January 2017). 2016 National Long-Term Care Insurance Price Index. American Association for Long-Term Care Insurance. Retrieved August 02, 2017, from
4 (2016). Caregiver Statistics: Demographics. Retrieved May 06, 2017, from

Only 6% of Americans passed this financial literacy quiz. Can you?

Nearly half of Americans are feeling more financially secure today compared to five years ago, but this sense of security may be masking blind spots that could undermine their long-term financial health, according to our recent Financial Engines survey. We found that just 6% of Americans were able to pass a quiz about a broad range of financial decisions they’ll most likely confront during their lifetimes. As a result, many could be underestimating just how much they will need to save for the long-run.

How much do you know about planning for your financial future?

Take our quiz to find any gaps in your financial knowledge.

How’d you do? Check out the infographic below to see how average Americans fared and learn more about the toughest topics.

If you discover that you could use a little extra help in a few areas, reach out to a financial advisor in your area.


Market Summary: August 2017

An eventful August brings mixed market results.

The past several months were strong for stocks around the world. But August saw both an increase in volatility and mixed returns. Large-cap U.S. stocks (S&P 500 index) managed a +0.31% return, after dipping as much as -1.81% earlier in the month. Mid- and small-cap stocks fell, returning -1.53% and -2.57% respectively (S&P 400 and 600 indices). They both also saw considerably lower returns mid-month. International developed-market stocks closed the month basically right where they started and were down -0.04% (MSCI EAFE index). Emerging-market stocks saw the best returns in August by closing the month up +2.23% (MSCI Emerging Markets index). Meanwhile, bonds edged upward with the Barclays Aggregate index returning +0.90%, in response to interest rates falling over the month.

Hardship withdrawals from employer-sponsored retirement plans: What they are, what to do if you need one.

Life’s path has a way of taking unexpected detours. When facing difficulties, particularly of the financial sort, it’s important to understand your options and not make rash decisions under pressure. If you find yourself in need of money on short notice, you should consider all of your options, which can include tapping your personal savings, borrowing money, or, as a last resort, dipping into retirement savings.

Typically, money in your employer-sponsored retirement plan is accessed by taking what’s known as a hardship withdrawal.

What’s a hardship withdrawal?

Hardship withdrawals are an optional type of distribution you can take from some employer-sponsored retirement plans, such as 401(k)s, 403(b)s, and 457 plans. Typically, you can’t take money out of these types of plans without paying a penalty unless you turn 59½ (except for a 457 plan, which doesn’t have this age requirement), leave your employer, or retire. However, a hardship withdrawal allows you to take money out of your plan in certain extenuating circumstances.

Note that your plan isn’t required to allow hardship withdrawals. So talk with your plan administrator or your employer’s benefits department to find out if they’re available to you.

What qualifies as a hardship withdrawal?

In a traditional or Roth 401(k) plan, you can withdraw your own elective contributions if you, your spouse, your dependents, or your plan beneficiary have an “immediate and heavy financial need.” Your elective contributions are the money you personally put in — not any employer match or profit-sharing.

Whether you have an immediate and heavy financial need can vary by situation. However, the Internal Revenue Service provides guidance about situations that generally qualify:

-Expenses to repair major damage to your primary home after certain catastrophes, like a natural disaster.

-Certain medical bills for you, your spouse, children, other dependents, or your plan beneficiary.

-Costs directly related to buying a primary home for yourself (note that this does NOT include mortgage payments).

-Post-secondary tuition for you, your spouse, children, other dependents, or your plan beneficiary.

-Payments needed to prevent eviction from or foreclosure on your primary home.

-Burial and funeral expenses for a parent, spouse, child, other dependents, or your plan beneficiary.

-Income taxes and/or penalties you owe on the hardship withdrawal itself.

Check with your employer to see if they have any additional requirements or restrictions. Some plans won’t let you take a hardship unless you’ve already taken all other available distributions and nontaxable loans from your plan. They may also restrict you from making any new contributions to the plan for six months or more after taking a hardship withdrawal. In addition to a 401(k) plan, your employer can also provide information on the special rules for 457(b) and other nonqualified deferred compensation plans that you participate in.

How much can I take in my hardship withdrawal?

In a 401(k) plan, the amount available for hardship withdrawal is generally equal to the sum of your personal contributions, minus any prior hardship withdrawals. Some plans may also let you withdraw your employer’s regular matching contributions and profit-sharing contributions as well. However, the rules about hardship withdrawals from these dollars may be different from the rules about hardship withdrawals from your elective contributions.

You can’t necessarily take the entire amount that’s available for hardship withdrawal, however. You can only withdraw the amount necessary to satisfy your financial need. Your employer may ask for documentation to support the amount of your request, such as copies of bills or a purchase and sale agreement for a home.

How to get a hardship withdrawal.

There are five main steps to take a hardship withdrawal:

1 – Determine how much money you need and whether there is any other reasonable way you can cover the cost.

2 – Check with your plan administrator to find out if your plan allows hardship withdrawals, the requirements to qualify, and the maximum amount you can withdraw.

3 – Request a hardship withdrawal from your plan administrator. This will typically involve filling out some paperwork and providing proof of hardship, if requested.

4 – Get your spouse’s consent, if necessary (your plan administrator will let you know if you need to do this).

5 – Pay any income tax and/or penalties due on the hardship withdrawal. You will typically do this when you file your federal and state income tax returns for the year of the withdrawal.

What else should I think about?

A hardship withdrawal is generally treated as taxable income to you for federal (and possibly state) income tax purposes. In addition, if you aren’t at least age 59½, a 10% early-withdrawal tax may apply. Before taking a hardship withdrawal, it’s a good idea to consult a tax advisor about any income tax implications.

Be sure to also consider the long-term financial impact of your choice. While short-term needs have to be taken care of, remember that you only have one retirement. By taking a hardship withdrawal, you’re not just diminishing the amount you have for retirement by the amount you withdraw, you’re also depriving yourself of any investment growth you might have earned on that money if it had stayed in your account. In addition, if you’re barred from making contributions to your account after taking a hardship withdrawal, you’re missing out on matching funds from your employer too. If you’re a long way away from retirement, that could translate into a significant amount.

Whatever hardship you’re facing, know that you have options. Consider all the different sources you have to get money, and the potential consequences of each. Having a trusted advisor on your side can help as well. Finding the right solution can help you take care of your needs in the present, and set you back on the path to a bright future.


Part of this content has been contributed by Broadridge Investor Communication Solutions, Inc.