Dean Akey

As a financial planner, I am often asked about reverse mortgages. In certain scenarios a reverse mortgage can be a useful tool in making your retirement work.

The Housing and Economic Recovery Act of 2008 made changes to reverse mortgages effective October 1, 2008. They include higher borrowing limits and protections from aggressive marketing.

A homeowner who is at least 62 years old can use a reverse mortgage to access home equity. It doesn't have to be repaid until the owner moves permanently, sells or dies.

The act raises the maximum amount for a reverse mortgage to $417,000 (or $625,500 in areas of high housing costs) from the previous limits of $200,160 and $362,790.

The amount that can be borrowed depends on the value of the home, its location, current interest rates and the borrower's age.

Loan origination fees may not exceed two percent of the initial $200,000 and one percent of the remaining balance up to a maximum fee of $6,000.

The loan originator's duties include all arrangements related to the loan until the loan is granted.

Lenders are prevented from requiring borrowers to purchase insurance, annuities, and other products as a condition for obtaining the mortgage, or allowing others to attempt to sell financial products as part of the closing process.

If you would like to learn more about how to prepare for your retirement please give me a call at 630-232-9811 or drop me a note at deanakey@allstate.com

Even before the recent colapse of our financial markets clients would ask me where to put their emergency fund monies.

Financial planners quoted in Readers Digest suggest placing your just-in-case money in a series of short-term CDs that continuously come due. This provides a higher rate of return without tying up a lot of money and gives the option of using it when needed, penalty free.

If you have $10,000 to invest, put $2,500 in a one-year CD in September, then $2,500 in a one-year in December and March. You'll have $2,500 plus interest coming in every three months. You can roll it into new CDs or invest more each time it matures.

To shop for CDs, check with you bank or Bankrate.com which lists the best CD rates from banks nationwide. There are no fees when you buy a CD. The penalty for removing money prior to maturity can be up to six months interest.

While interest rates are low, this is a secure way to have your emergency fund available when you need it.

The whole point of life insurance is that you never know when you'll need it. So even though your policy might be long-term, you need to make sure it offers the right amount of benefits for your current situation.

A good rule of thumb is to recalculate your life insurance needs once a year, or more often if there's a major change in your life. Here are some examples:

The Things You Own

Whether you're married or single, it's good to know that your finances will be resolved if you should die unexpectedly. That could mean paying off loans or a mortgage, and it's especially important if you have a lot of debt or want your family to keep living in your home.

Take another look at your policy when:

•· You buy or sell a home

•· You take on new debt

Family Matters

You'll want to know that your family's financial needs will be covered if you're no longer able to provide for them. You'll need the most life insurance when your kids are growing-enough to last them until they become adults and cover their college education. This is even more important if you're the main breadwinner.

Consider raising or lowering your coverage when:

•· You get married or divorced

•· You have a baby

•· Your children become financially independent

•· Your children finish college

•· Your long-term goals change

Work Life

The general rule for life insurance is that your policy's "death benefit" (the amount that gets paid to your beneficiaries if you die) should pay seven times your annual salary. The idea is that as your salary changes, your family's lifestyle changes to match. If you're self-employed or own a business, you might also have business-related expenses to cover.

Think about adjusting your policy when:

•· Your salary changes

•· You start or sell a business

•· Your spouse's job changes

Life rates are at historically low prices. Recently I was able to provide a 45 year old male client $100,000 worth of term coverage for $199 a year. If you would like to learn more about how life insurance can help protect your family please call me at 630-232-9811 or drop me a note at deanakey@allstate.com

When the temperature falls below 20 degrees and is accompanied by strong winter winds, the potential for pipes freezing dramatically increases. The result is often burst pipes and flooding.

"The winter months can be very damaging to your home if you do not plan ahead," says Allstate agent Dean Akey. "By keeping track of the weather forecast and taking some precautions, your house has a better chance of staying dry this winter."

The following tips from Allstate Insurance Company, the American Red Cross and the Federal Emergency Management Agency will help to keep your home dry this winter:

• Detach all gardening hoses and shut off water supply to outside faucets.
• Wrap pipes nearest exterior walls and in crawl spaces with pipe insulation or with heating tape.
• Caulk or weather seal windows to cut down on wind drafts.
• Tag the location of your main water valve and make sure you can easily turn it on and off.
• If you have a thermostat that uses a battery, be sure to replace it regularly.
• Shut off the water supply to your washing machine when not in use.
• If you plan to travel or be away from home for an extended period of time, ask a friend or neighbor to check your pipes and the temperature in your home.

During a deep freeze, consider the following steps:

• Try to keep the temperature in your home at 68 degrees.
• Keep cabinet doors open to allow heat from the home to circulate around the pipes.
• Check the water flow from all faucets before retiring for the evening and again in the morning. (Reduced water flow can be a sign of early freezing.)
• Allow your faucets to drip lukewarm water in order to minimize the chances of a pipe freeze.
• Remember, that a pipe doesn't necessarily burst the first time it freezes. Sometimes it takes several freezes and thaws before damage occurs. However, special care and forethought could help swing the odds in your favor.

For more information on this and other safety topics, contact Allstate agent Dean Akey at 630-232-9811.

If you're like most of us and in debt, chances are credit cards have played a part. If you're trying to get out, congratulations! With a bit of perseverance, you can make great progress. One of your top priorities should be to get smart with your credit cards. Here's how:

Stop using them.

To get out of a hole, you've got to stop digging. Eventually you can probably start using credit cards again. First you need to practice living within your means, so switch to your debit card to make sure you're only spending money you have on-hand. Don't think of this as a punishment. You're actually doing yourself a big favor.

Know what you're working with.

If you have balances on more than one card, list out each card's balance, credit limit, interest rate, and minimum payment. Keep sending the minimum balance to each, but pay whatever extra money you can toward the card with the highest interest rate. (That will help you pay less interest over the long run.)

Get your rates lowered.

Call the phone number on the back of each card. When you get connected to a customer service representative, tell them you'd like your interest rate lowered. If you have a good record with the company and haven't already had your rate lowered in the last six months, there's a good chance they'll offer you a lower rate. Even a few percentage points can save you hundreds while you pay the card off. All it takes is five minutes of your time.

When you're ready, practice using them responsibly.

Credit cards can be a great tool, but it takes discipline to make them work for you.

Start by using just one credit card-hopefully one that offers rewards. Use it for daily expenses and other planned purchases. Along with this, stick to one unbreakable rule: The card must be paid off in full every month. Once this is no longer a struggle and you aren't tempted to overspend, you'll know you've mastered credit cards.

Protect your credit score.

As you pay off each card, it might seem like a good idea to close the account so you aren't tempted in the future. Watch out! Doing that can temporarily lower your credit score. Your score depends partly on how much of your available credit you're using. Closing accounts can wreck that ratio.

Instead, take the cards out of your wallet and put them somewhere safe. To keep the cards active, use each one once a year and pay it off right away.

Your oldest credit card can be especially important. It shows a longer credit history, which can help raise your score. You definitely want to keep that card active. If the card has an annual fee, a high interest rate, or some other feature you don't like, contact the card company and ask to have the fee waived or the rate lowered. If that doesn't work, just wait until you have a better card with seven to ten years of history, and cancel the first card.

I actually have now gone 18 months without using a credit card so I can tell you firsthand that if I can do it you can too. If you would like to learn more or have any questions please call me at 630-232-9811 or drop me a note at deanakey@allstate.com