August 2022 newsletter
AUGUST 2022 NEWSLETTER
Welcome you to this month's newsletter with Ha Le.
I'd like to treat you with tea and mooncake and chit-chat a little bit because Mid-Autumn Festival is coming. This is a traditional festival in the Vietnamese community where family members get together and enjoy the full moon harvest.
One of the good news these days was President Biden signed an executive order to cancel the student loans for those with income below $125,000. The amount canceled can be $10,000 or $20,000 depending on whether they received Pell Grants.
12 million people may be wiped out of all the student loans of $10,000. Other 30 million people's loan balance can be reduced. This piece of good news may cost the government from 300 billion to 980 billion dollars.
Good news for student loan carriers.
What do you think, parents with to-be college students?
And so, we talk about DEBT.
Have you got any DEBT?
Debt is a taboo that no one wants to talk about. But it still exists despite avoiding talking about it.
Some distinguish Debt as the Good and the Bad.
Others categorize Debts into Planned and Unexpected.
Student Loan is Planned. It is a big investment for your own or your kid's future. It can be considered The Good Debt at first because it helps you prepare for a better future with a good job. Besides, the loan interest can be deducted from your income tax. However, if the loan is so big, it'll become The Bad one.
There is one kind of debt that no one wants to have.
Medical Debt is The Ugly one.
In the survey by NPR, 41% of Americans have medical debt.
Elizabeth Woodruff and her husband were sued by the New York hospital for their $10,000 debt due to her husband's leg being amputated.
Ariane Buck had outstanding bills, so he couldn't set an appointment with his doctor for his intestinal infection.
Chayenne Dantona, 31 years old, was diagnosed with blood cancer in college. Her cancer slows down but she was billed thousands of dollars because her primary physician was out-of-network. She used her credit cards to pay for the bill and then was stuck with a high-interest credit card loan. Her credit scores were affected badly, and now she was reluctant to continue her treatment.
The story of Terri Logan
After delivering her daughter prematurely, Terri Logan was shocked to receive her hospital bill.
A math teacher in Georgia and a single mom, she didn't have any means to pay off her bill. "I avoided it like the plague," she said.
But the avoidance can't make the bills disappear as she wished.
She got anxiety attacks when thinking of the debt and finding ways to pay the debt as long as to pay for her daughter's daily needs.
13 years later, Terri Logan got a yellow enveloped letter telling her that her debt was forgiven by a non-profit organizer.
Do you wonder which organizer did it and how they did it?
After a while when patients can't pay the bills, hospitals will sell off their debt packages to debt collectors for pennies on the dollar. The debt collecting companies will earn profits by collecting the full amount of debts.
Craig Antico and Jerry Ashton had collected debts before.
They also used their expertise to help "Occupy Wall Street" buy debts to help Americans relieve their debts. After those incidents, Jerry Ashton decided to become a debt reliever instead of a debt collector.
So, Craig Antico and Jerry Ashton founded RIP Medical Debt in 2014. They raised funds and buy debt packages from the secondary market, then sent letters to the debtors and said that their debts were erased.
Terri Logan was one of the people helped by RIP.
Reagan Adair, a teacher in Murchison, Texas with a debt of $3,100 was also forgiven by RIP.
The new rules now allowed RIP to buy debt packages directly from the hospitals.
It's a relief for the medical debtors, but Ashton admitted that this is not a solution to a debt factory like the American health system.
Americans owed 195 billion dollars due to medical bills in 2019, and this number is estimated about 1 trillion dollars now.
They have jobs and health insurance but the bills may exceed their abilities to pay.
Almost half of the American households with $90,000 annual income have had medical debts during the last 5 years.
One of every 8 American adults owed more than $10,000 in medical debt. They are all trying to pay off their debts, but only 23% said that they can finish paying in 3 years, and the other 18% said that they had no chance to pay off the debt.
Half of the American adults don't have $500 cash to pay for anything unexpected. They may use a credit card to pay (and produce a credit card loan with high interest) or borrow money from relatives or banks.
Women are likely to have more debts than men. And the percentage of parents who have medical debts are higher than childless couples.
What do you think after reading about those numbers?
Do you have $500 cash to pay for unexpected events?
Do you have an emergency fund that can cover from 6 months to 1-year expenses if you are unemployed?
Do you have plan B for the worst thing ever to happen?
You will be able to find a solution after talking out those worries with me. Schedule a 15-minute chat with me here.
You may not know
Some insurance carriers offer Return of Premium Rider automatically on Indexed Universal Life, which means you will get 100% of your premium after 20 years.
But is that for poorly designed policy?
You can have more cash in your IUL account than your 20-year total premium if you see the right advisor, like me.
Upcoming event
Milky Way Retirement is going to be present at the Mid-Autumn Festival with the Senior Club organized by Vietnamese American Services (VAS) in Maryland this September 11, 2022.
I will be there to directly answer all questions about Long-term care planning.
Hope to see you there.
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