Fixed income is something many Americans don’t understand, according to the 2019 survey, “Fixed Income, Not Fixed Thinking,” by BNY Mellon Investment Management, one of the largest asset managers in the world. The study revealed that the majority of Americans surveyed have a limited understanding of fixed income investments, regardless of age, income, education level, and other demographics. The lack of understanding ranged from bonds, different fixed-income solutions including fixed-income insurance products, comprehending how fixed-income plays into retirement planning, and understanding its risk in comparison to other asset classes.

The same study revealed that Americans think fixed income is important solely in the immediate run-up to retirement, or during the decumulation phase when investors start to draw from their retirement nest egg. However, fixed-income solutions can play a part in anyone’s portfolio at any age.

Fixed-Indexed Annuities

One such fixed-income solution, fixed-indexed annuities, offer protection of principal, growth based on the performance of the index it follows and provides fixed payments for the insured’s life during the decumulation phase. Interested is credited when the index value increases, but the interest rate is guaranteed never to be less than zero, even if the market goes down. All annuities are insurance products and not traded on public markets. Annuities are guaranteed by the claims-paying ability of the insurance company issuing them.

A secondary 2019 study by WealthManagement.com Research, “How Advisors are Using Fixed-Income Annuities,” reports that two-thirds of advisors surveyed are very familiar with these products and have incorporated them into client portfolios to obtain these key objectives:

• Principal protection
• Tax-deferred growth
• Retirement income planning
• Avoid Social Security income offset
• Current income
• Estate/Legacy planning

Before purchasing a fixed-indexed annuity, it is important to understand all fees associated with the annuity, if your money is available right away, and the surrender fees, if any. Secondly, there are pros and cons to purchasing a fixed-indexed annuity:

Pros:

• Your principal is protected from a down market, and you won’t lose your initial investment or accumulation.
• Grow on a tax-deferred basis.
• The return is based on an index (ex. The S&P 500), which grows the annuity’s value over time.
• Provides a guaranteed lifetime income and protection against longevity risk; you receive annuity payments for life.

Cons:

• Some are complex, costly, and aren’t always necessary for the investor.
• A Fixed-income annuity is not a growth-market product and is unregulated. Ask for written information from the insurer about the annuity product and don’t just accept the ‘sales-hype.’

If you have questions regarding fixed income options or fixed-indexed annuities as a way to protect the premature depletion of your assets during a down market in retirement, contact our office.

Additional Disclosure: The newsletter and links are being provided as a service to you. Please note that the information and opinions included are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions. Nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

Additional Disclosure: An annuity is intended to be a long-term, tax-deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax-qualified plans, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income. Taxes and penalties may apply to non-qualified distributions. Consult a tax advisor for specific information.

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In addition Ronald A. Bartlett & Associates, LTD. are Registered Investment Advisors and has been working with the Communication Workers of America since 2007. At Ronald A. Bartlett & Associates, we know that it is your retirement, and you should have control over it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

In November 2019, the Internal Revenue Service (IRS) announced the cost of living adjustments for 2020 for most retirement savings plans. However, IRA contribution limits will stay the same. If you plan to make the maximum contributions to your retirement plan in 2020, here’s what you need to know:

• The limit on annual employee contributions to 401(k)s, 403(b)s, most 457 plans, and the Federal government’s Thrift Savings Plan will rise to $19,500 in 2020, up from $19,000 in 2019.
• The retirement plan ‘catch-up’ provision for savers age 50+ will be $6500 for 2020. Super-savers who want to max their retirement savings contributions can save $33,000 into these tax-advantaged accounts in 2020.
• The limitation regarding SIMPLE retirement accounts for 2020 increases to $13,500 (up to $500 from 2019).
• You can save even more if your employer allows after-tax contributions. The defined contribution plan limit moves up to $57,000 in 2020.

Traditional IRA

Taxpayers can deduct contributions into a traditional IRA if they meet certain conditions. The deduction may reduce if during the year either the taxpayer or their spouse were covered by a workplace retirement plan. The deduction may also phase out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor spouse are covered by a workplace retirement plan, the phase-outs don’t apply.) Here are the phase-out income ranges for 2020, up slightly from 2019:

• Single taxpayers covered by a workplace retirement plan, the phase-out income range is $65,000 to $75,000, up from $64,000 to $74,000.
• Married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $104,000 to $124,000, up from $103,000 to $123,000.
• An IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered. The deduction is phased out if the couple’s income is between $196,000 and $206,000, up from $193,000 and $203,000.
• In addition, a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Other income phase-outs to be aware of:

The income phase-out for Roth IRAs is $124,000 to $139,000 for singles and heads of household. For married couples filing jointly, the income phase-out range is $196,000 to $206,000. In addition, the phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $65,000 for married couples filing jointly, $48,750 for heads of household, and $32,500 for singles and married individuals filing separately.

For instance, you’re not able to save the maximum into your retirement accounts, now is a great time to increase your contributions anyway. If you have any questions regarding contribution limits or setting up IRAs, contact our office.

Additional Disclosure: This article is designed to provide general information on the subjects covered. Pursuant to IRS Circular 230, it is not intended to provide specific legal or tax advice. It cannot be used to avoid penalties or to promote, market, or recommend any tax plan or arrangement. You are encouraged to consult your personal tax advisor or attorney.

SW3-20191119

In addition Ronald A. Bartlett & Associates, LTD. are Registered Investment Advisors and has been working with the Communication Workers of America since 2007. At Ronald A. Bartlett & Associates, we know that it is your retirement, and you should have control over it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

Here we are, already to the end of 2019! The end of a year and the start of a new one is when most people decide to clean up and implement changes in some areas of their lives. Whether it is financial or health-related, starting the New Year off with tasks completed feels good! Here are ten financial tasks that can make a difference to you now, and later:

Task #1- Increase Retirement Savings Contributions

Increasing or maximizing your pre-tax and after-tax retirement savings contributions helps in two ways; first, it helps to ensure you will have more money in retirement. Second, contributions into pre-tax retirement savings accounts help to lower your taxable income in the year the contributions made.

Task #2- Take your Losses

If you decide to sell losing assets before 2020, you may be able to use those losses to offset your taxable capital gains. Make sure to consult your tax professional to understand if tax-loss harvesting will benefit you or not.

Task #3- Consider Converting to a Roth IRA

Since contributions and earnings in a Roth IRA grow tax-free, converting your tax-deferred retirement savings into a Roth may make sense for you. Although you are required to pay taxes on the entire contributions and earnings, the conversion in 2019 may be a tax-smart move in the long term.

Task #4- Prepare for 2019 Tax Reporting

You don’t need to wait until 2020 to meet with your tax professional. Having an idea of how much you may need to pay in taxes for 2019 can benefit you when you still have time to contribute to tax-sheltered investment accounts opened by December 31st, 2019, to off-set personal income and capital gains. Especially if you’ve made more money in 2019 than in previous years, having an idea of taxes due in the 4th quarter and pre-paying taxes can save you stress later. 

Task #5- Evaluate Health Savings Account (HSA) Contributions

HSAs allow pre-tax contributions, much like your pre-tax retirement savings. However, when used at a later date for health-related expenses, including future long-term care expenses, the contributions and accumulation are tax-free upon withdraw. Make sure you are maximizing your contributions to enjoy the benefits of using the account later and lowering your taxable income for 2019!

Task #6- Contribute to your Children’s or Grandchildren’s 529 College Savings Plan

Many states offer a state income tax credit or deduction up to a certain amount for parents or grandparents that contribute.

Task #7- Rebalance, Rebalance, and Rebalance

Market swings cause portfolio allocations to change over time. The end of the year is a great time to rebalance all of your investment accounts.

Task #8- Spread Your Wealth to Benefit Non-Profits

Donor-Advised Funds allow you to deduct your contributions to a non-profit. Due to the Tax Cuts and Jobs Act, contributions must be made into a donor-advised fund in 2019 to be itemized and deducted on your 2019 tax return.

Task #9- Check and Update Beneficiaries

Check and update beneficiary information on your employer retirement plan and all life insurance policies. Has there been a marriage, divorce, or name change for any beneficiary? Keeping beneficiary information and your information current is essential to help avoid problems later if there is a death claim.

Task #10- Schedule Your Annual Review for 2020

The beginning of a new year is a great time to schedule an annual investment review, complete or update your financial plan.

If you have questions regarding any of the above financial tasks, contact our office to complete these before we say goodbye to 2019 and welcome 2020!

Additional Disclosure: Diversification and asset allocation strategies do not assure a profit or protect against loss.

SW3-20191119

In addition Ronald A. Bartlett & Associates, LTD. are Registered Investment Advisors and has been working with the Communication Workers of America since 2007. At Ronald A. Bartlett & Associates, we know that it is your retirement, and you should have control over it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

Dreaming and goal setting are interrelated; first, you dream about what you want, then you determine how to obtain it. Our dreams should help guide us to make the right choices at the right time and in the proper manner. But merely dreaming about something is not enough; we must set goals to achieve it. In psychology, goal setting refers to a successful plan of action that we set for ourselves.

Psychologist Frank L. Smoll, a Ph.D. and working psychologist at the University of Washington, emphasized through his studies the three essential features of goal-setting, which he calls the A-B-Cs of goals. Smoll said that effective goals are:

A-Achievable

B-Believable

C-Committed

Others in the field of psychology have determined that goal-setting for productivity involves five criteria; it must be specific, measurable, achievable, realistic, and time-sensitive. Whether your dream is buying a larger house, completing a degree, losing weight, or saving a specific amount for retirement, all of these criteria must be included in your planning to achieve success.

If dreaming and ‘goal-setting psychology’ sounds a lot like financial planning, it is. Financial plans develop with all of these productivity criteria in mind. Financial advice is then executed to help make a dream a reality. Achieving more significant goals, such as saving for retirement to live in retirement as one envisions, takes longer. Throughout a client’s life, they may change their retirement dream or adjust their goals to the evolving criteria.

Dreams are Like a Destination

Remember that dreams are like a destination- if you want to go somewhere, you need to visualize where you want to be, recognize where you are at now, and make a plan to get there. You must also stay motivated and keep dreaming! I can help you do all of this; all you need to do is ask.

Additional Disclosure: The newsletter and links are being provided as a service to you. Please note that the information and opinions included are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Planning services are generally available at additional cost and can only be offered only by appropriately licensed registered investment advisors.

1016680(a) -1119

In addition Ronald A. Bartlett & Associates, LTD. are Registered Investment Advisors and has been working with the Communication Workers of America since 2007. At Ronald A. Bartlett & Associates, we know that it is your retirement, and you should have control over it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

Back To School Financial Guide For 2019

In a recent study conducted by the ‘National Retail Federation and Prosper Insights and Analytics’, it was found that the average American family will spend just south of $700 for back-to-school costs in 2019. Is your child soon to be a college student? The same survey reported you should be ready to spend a little less than $1,000 alone for start-up school supplies. While this cost seems large, it’s just a part of your financial portfolio. Back-to-school time is not only a great time to plan a scholastic budget, but also reviewing and reassessing your financial plan. Below is your Official 2019 Back-To-School Financial Guide to make sure your student, and your financial goals, stay on track:

Create a Baseline Report

How has your year progressed in terms of finances? Have you met or succeeded in your goals? Developing a spreadsheet and comparing where you were at the beginning of the year to where you are now can help you asses how aligned you are with your financial goals. Building this report toward the latter of the year will also give you time to adjust your plan (if needed), throughout the remainder of 2019.

Rethink Insurance Needs

Life happens, which is why insurance was invented. Whether you want to provide for your family in case of an emergency or someone forgets to turn off the stove…again; insurance of all sorts can help cushion the blows to your wallet and financial well-being. However, just as life is always changing, so too are your insurance needs and costs. Once a year, you should reevaluate your insurance needs and coverage for any change. While you may not be able to change health insurance in the middle of the year, items like car and home can be changed with a little research and not much effort.

Develop or Update Your Budget

Regardless if you are married, single, with or without dependents, it is crucial to create and maintain a workable budget. Life changes on a regular basis and your budget must coincide with your current income, needs wants, and goals. Back-to-school time is an ideal time to revisit your budget. It’s a relatively slow time on the tail end of summer travels and on the steps leading up to the holiday season. Budgets should be regularly checked throughout the year and especially after any life changes like marriage, death, education, etc. 

Plan Out Taxes for 2019

Now is the best time to make sure you are receiving the most tax breaks you can on income for 2019. Items like 401(k), charitable contributions, and retirement contributions are all fantastic ways to reduce your tax liability. Consider boosting certain contributions to reduce what you’ll pay in taxes. While ‘tax season’ is still months away, it’s important to start looking at your 2019 year from a financial perspective and start looking out other ways to save on taxes before years end. 

Back-to-school season signifies the approach of cooler weather, the quick onset of school costs, and the ultimate approach of years end. Make sure you have a great start to 2020 and finish off 2019 by utilizing this guide when looking at the remainder of your financial year. Although these are good recommendations to start with, you should connect with a financial professional to see where you are on your financial journey and how these tips could benefit you.

Ronald A. Bartlett & Associates, LTD. are Registered Investment Advisors and has been working with the Communication Workers of America since 2007. At Ronald A. Bartlett & Associates, we know that it is your retirement, and you should have control over it. We offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!

Content derived from www.money.usnews.com and www.usatoday.com

Disclosure: This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives.

The post Back To School Financial Guide For 2019 appeared first on Adult Financial Education Services.

Provided by: Adult Financial Education

Guaranteed Income in Your Retirement

One of the biggest concerns of preretirees and retirees is income. This makes a lot of sense when you consider that all your savings essentially breaks down to an annual income you need to have to live comfortably during your retirement years. One of the options many seniors explore when trying to secure their retirement income is a fixed index annuity1.

Fixed index annuities, much like pensions plans of old, are contracts issued by insurance companies that allow your principal contribution to earn money based on the performance of a market index. Unlike other financial instruments, however, a fixed index annuity offers you a guarantee against losses should the performance of the index falter. It also ensures the gains you made are locked in, so you can’t lose them. Fixed index annuities can also be designed with a guaranteed income rider2 so that you get a fixed, guaranteed income3 throughout your retirement.

A market index4 is a listing of assorted stocks or bonds that are representative of a specific segment of the market. They might represent a selected industry, emerging market or capitalization. While investors can’t actually purchase an index, there are investment vehicles, such as exchange trade funds, that are designed to mimic the performance of a chosen index. Popular indexes that you’ve probably heard of include the Dow Jones Industrial Average, which is a collection of 30 blue chip stocks, and the S&P 500®, which follows 500 large companies.

Three Facts about Fixed Index Annuities

A fixed index annuity isn’t the right product for every retiree, but it can make a difference to some. Three facts to keep in mind when exploring the benefits of these annuities with a qualified financial professional include:

1. They are not suitable for short-term savings goals. Fixed index annuities can expose you to surrender charges and tax consequences if you withdraw them too early.
2. Fixed index annuities can be a good choice for risk-averse savers. With little to no risk of principal loss, a guaranteed interest rate and the option of a guaranteed lifetime income3—fixed index annuities can offer savers a low-risk product. But for risk takers, they may not be satisfying. Those with a higher risk tolerance may want to limit just a small portion of their portfolio to the guarantees offered by the annuity.
3. Fixed annuities offer both immediate and deferred options. If you don’t need access to your money or annuity income immediately, then you can choose a deferred annuity allowing your balance longer to grow.

Overall, annuities can protect retirees from longevity risk and establish a floor of income — beyond the modest annuity paid by Social Security — safe from investment losses, according to a 2012 article by Willis Towers Watson.

If you’re in or near retirement, be sure to talk to your financial professional about your retirement goals and how fixed index annuities may be an option to guarantee income during your golden years.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or products may be appropriate for you, consult with your financial advisor.

Source:

“Annuities and Retirement Happiness,” Willis Towers Watson

Smart Money Advisors
April 2017

1Annuities are designed to meet long-term needs for retirement income. They provide guarantees of principal and credited interest, subject to surrender charges, and a death benefit for beneficiaries.

2Product and features may differ depending on the state of issuance and may not be available in all states.

3Guarantees are backed by the financial strength and claims paying ability of the issuing company.

4The interest credited on your contract may be affected by the performance of an external index. However, your contract does not directly participate in the index or any equity or fixed interest investments. You are not buying shares in an index. The index value does not include the dividends paid on equity investments underlying the equity index or the interest paid on any fixed income investments underlying any bond index. These dividends and interest are not reflected in the interest credited to your contract. Any interest credited are guarantees that are backed by the financial strength and claims paying ability of the issuing company.

The post Guaranteed Income in Your Retirement appeared first on Smart Money Advisors.

Source: Newsletters

The post Guaranteed Income in Your Retirement appeared first on Adult Financial Education Services.

Source: Adult Financial

Guaranteed Income in Your Retirement

Guaranteed Income in Your Retirement

One of the biggest concerns of preretirees and retirees is income. This makes a lot of sense when you consider that all your savings essentially breaks down to an annual income you need to have to live comfortably during your retirement years. One of the options many seniors explore when trying to secure their retirement income is a fixed index annuity1.

Fixed index annuities, much like pensions plans of old, are contracts issued by insurance companies that allow your principal contribution to earn money based on the performance of a market index. Unlike other financial instruments, however, a fixed index annuity offers you a guarantee against losses should the performance of the index falter. It also ensures the gains you made are locked in, so you can’t lose them. Fixed index annuities can also be designed with a guaranteed income rider2 so that you get a fixed, guaranteed income3 throughout your retirement.

A market index4 is a listing of assorted stocks or bonds that are representative of a specific segment of the market. They might represent a selected industry, emerging market or capitalization. While investors can’t actually purchase an index, there are investment vehicles, such as exchange trade funds, that are designed to mimic the performance of a chosen index. Popular indexes that you’ve probably heard of include the Dow Jones Industrial Average, which is a collection of 30 blue chip stocks, and the S&P 500®, which follows 500 large companies.

Three Facts about Fixed Index Annuities

A fixed index annuity isn’t the right product for every retiree, but it can make a difference to some. Three facts to keep in mind when exploring the benefits of these annuities with a qualified financial professional include:

1. They are not suitable for short-term savings goals. Fixed index annuities can expose you to surrender charges and tax consequences if you withdraw them too early.
2. Fixed index annuities can be a good choice for risk-averse savers. With little to no risk of principal loss, a guaranteed interest rate and the option of a guaranteed lifetime income3—fixed index annuities can offer savers a low-risk product. But for risk takers, they may not be satisfying. Those with a higher risk tolerance may want to limit just a small portion of their portfolio to the guarantees offered by the annuity.
3. Fixed annuities offer both immediate and deferred options. If you don’t need access to your money or annuity income immediately, then you can choose a deferred annuity allowing your balance longer to grow.

Overall, annuities can protect retirees from longevity risk and establish a floor of income — beyond the modest annuity paid by Social Security — safe from investment losses, according to a 2012 article by Willis Towers Watson.

If you’re in or near retirement, be sure to talk to your financial professional about your retirement goals and how fixed index annuities may be an option to guarantee income during your golden years.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or products may be appropriate for you, consult with your financial advisor.

Source:

“Annuities and Retirement Happiness,” Willis Towers Watson

Smart Money Advisors
April 2017

1Annuities are designed to meet long-term needs for retirement income. They provide guarantees of principal and credited interest, subject to surrender charges, and a death benefit for beneficiaries.

2Product and features may differ depending on the state of issuance and may not be available in all states.

3Guarantees are backed by the financial strength and claims paying ability of the issuing company.

4The interest credited on your contract may be affected by the performance of an external index. However, your contract does not directly participate in the index or any equity or fixed interest investments. You are not buying shares in an index. The index value does not include the dividends paid on equity investments underlying the equity index or the interest paid on any fixed income investments underlying any bond index. These dividends and interest are not reflected in the interest credited to your contract. Any interest credited are guarantees that are backed by the financial strength and claims paying ability of the issuing company.

The post Guaranteed Income in Your Retirement appeared first on Smart Money Advisors.

Source: Newsletters

Guaranteed Income in Your Retirement

Taxes in Retirement: What You Need to Know

Life after retirement is full of changes and challenges, not the least of which is trying to understand how taxes will impact your income and deductions in retirement. Many wonder how big their tax bill will be in retirement and how long their retirement will last.

The average American can expect to spend roughly 20 to 30 years in retirement. However, several unsettling facts about retirement savings were revealed in the 2016 Retirement Confidence Survey.¹ In 2014, 30 percent of workers with access to a defined contribution plan, such as a 401(k) plan, did not participate. Of workers with some retirement savings, 54 percent had less than $25,000 and 26 percent had less than $1,000.

The survey also found that less than half of Americans have calculated how much they need to save for retirement. These reports show a considerable gap between workers’ expectations and retirees’ experience about leaving the workforce. Retiring earlier than planned may be due to unexpected downsizing, health issues, or caregiving choices.

So what can you do? Be sure to start preparing now for retirement, if you haven’t already done so. Preparing for retirement can become a great habit. To promote this, the IRS has incentives such as tax credits.²

With a 401(k), 403(b) and most government plans, the limits for 2017 stayed the same as the previous two years: $18,000, plus a $6,000 catch-up contribution for those 50 and older. If you’re lucky enough to have a generous employer matching your 401(k)-type plan or are self-employed, the maximum that can be contributed annually rose to $54,000 a year from $53,000.

For a traditional IRA, you can deduct contributions if they were not covered by a retirement plan with your employer up to $5,500 and $1,000 for catch up amounts.

The IRS has income limits² for those who contribute to both a traditional IRA and a workplace retirement plan (or those whose spouses have access to a workplace plan), as well as the income limits for those who contribute to Roth IRAs.

If you contributed up to $2,000 in your retirement plan or IRA in 2016 or will in 2017, middle and low income earners could qualify for a Saver’s Credit.³ For 2017, plan ahead for this by including regular amounts automatically deposited into your retirement accounts, depending on your Adjusted Gross Income (AGI).

Take the time to understand your retirement plan tax credits for filing your 2016 income tax return and consider your future goals. Tax time is also a good time to do a financial check-up, including your overall retirement planning. Be sure to talk to your financial professional about your taxes in retirement and how to best plan for a bright financial future.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or products may be appropriate for you, consult with your financial advisor.

Sources:

¹The 2016 Retirement Confidence Survey, Employee Benefit Research Institute (EBRI)

²Internal Revenue Service (IRS) website, Retirement Topics – Contributions

³Internal Revenue Service (IRS) website, Save Twice with the Saver’s Credit

The post Taxes in Retirement: What You Need to Know appeared first on Smart Money Advisors.

Source: Newsletters

Taxes in Retirement: What You Need to Know

Insure Your Love

Why do people really buy life insurance? For most it comes down to love. They love someone and want to make sure their family or loved ones wouldn’t suffer financially if something happened to them.

A life insurance policy is the ultimate gift of love. It’s less expensive than many other standard gifts like jewelry, yet provides a tremendous value that your family will need, should they lose you.

Life insurance also delivers added benefits that can help you and your family through a very difficult time, including advanced payments for terminal illness and long-term care riders to help you pay for non-medical assistance when you can no longer dress or feed yourself. Some life insurance policies have cash values that grow and can be borrowed against to help pay for college tuition, retirement and more.

Protect the ones you love with life insurance

It’s never too early to have a discussion about life insurance with your significant other so you’re both on the same page. Life insurance can be less expensive than you think. In a recent survey, 35% of Americans said that they wish their spouse or partner had life insurance.1

Every adult in your family needs coverage, whether they have an income or not. Many people think only the income-contributing spouse needs coverage, but that’s a dangerous assumption to make. While the working spouse definitely needs a policy to replace his or her income after death, the non-working spouse has duties within the house that can be expensive to outsource and impossible for a single parent to complete. Imagine how difficult it would be to lose a stay-at-home spouse and find a way to work, do all the shopping, cooking, cleaning, driving, and more. Additionally, the working spouse may need to take an extended leave from work, to comfort the kids and grieve, something they might not be able to do without the financial cushion of a life insurance benefit.  

When you realize that life insurance doesn’t provide income replacement but lifestyle maintenance, you can better appreciate the far-reaching application of a life insurance death benefit.

Determining How Much Insurance to Buy

When buying an engagement ring, the traditional advice is to get a ring that costs two months’ salary. But with a life insurance benefit, securing two years’ salary is a better starting place. Still, that only gives your family two years to maintain their lifestyle and find a way to replace your income. It doesn’t address any added concerns such as debt, college tuition and retirement savings.

Before making a decision, it’s a good idea to sit with your spouse or significant other and decide what you want the life insurance policy to accomplish. Consider your salary and any anticipated raises, including cost-of-living increases, and other financial goals you hope to achieve together but would struggle to achieve alone. Finally, think about the non-financial contributions each of you make to your family and the cost of outsourcing those.

Valentine’s Day is right around the corner and that means shopping for gifts that show your love to all the important people in your life. This year, instead of buying some chocolates and a card, consider securing a life insurance policy that will help your loved ones maintain their current lifestyle after you’re gone. Be sure to contact your financial advisor to help you with your life insurance needs.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or products may be appropriate for you, consult with your financial advisor.

1Source: 2016 Insurance Barometer Study, Life Happens and LIMRA

The post Insure Your Love appeared first on Smart Money Advisors.

Source: Newsletters

Insure Your Love

Make Saving More Money for Retirement Your #1 New Year’s Resolution

It’s that time of year when we all make New Year’s resolutions, such as eating better, working out more, and getting into better shape.

But what about your financial future? What kind of shape is your portfolio in? How much are you currently saving for your retirement? You may want to consider saving more money for retirement as your number-one resolution for 2017.

Since many New Year’s resolutions tend to be broken by January 2^nd, here are some simple suggestions to keep you on track and to avoid that happening to your retirement savings resolution.

1. Be sure you’re enrolled in your workplace’s 401(k) plan.
If your employer offers a 401(k) benefit plan, you should contribute as much as you can possibly afford in order to take advantage of all matching benefits. That’s as close to free money as you can get. You should also consider funding a Roth 401(k), if available, as tax-free sources of retirement income may become increasingly important.

2. Start saving early.
If you don’t have an employer who offers a benefit plan, open your own IRA or Roth IRA as soon as you can. Even small amounts put away earlier in life can have significant benefits. The earlier you start saving the better—not only to help grow your accounts, but also to help make saving for retirement a priority.

3. Create a realistic plan.
Too many people either don’t know or don’t take the time to research how much money they will need at retirement until it’s too late. Assess your needs realistically. Think about how you would like to spend your retirement years and then sketch out your expected costs for that lifestyle — and then double them. After you double them, you’re probably in the ballpark of your actual needs, because people rarely ever plan for the unexpected such as medical costs, nursing home fees, and long-term care expenses. For example, a 65-year-old, healthy couple can expect to spend $266,600* over the course of their retirement on Medicare premiums alone, according to HealthView Services.

4. Take a long-term view.
It’s important to remember to keep a diverse portfolio that balances your needs, as you grow older — you may want to consider a higher ratio of stocks and riskier investments in your youth, but then slowly shifting to more conservative investments as you near retirement. Buying hot stocks, trying to time the market, panicking after losses and dropping out of the market entirely, concentrating your investments with no diversification… these can all work against your retirement goals.

One example of a conservative retirement product is a fixed indexed annuity. An annuity serves as a complement to other retirement income sources, such as Social Security and pension plans. Fixed indexed annuities can offer principal protection with stable retirement income. The biggest advantages annuities offer is that they allow you to sock away a larger amount of cash and defer paying taxes.

The problem with New Year’s resolutions is that they’re so hard to keep. That’s especially true for resolutions associated with saving money and finances. But if you can find a way to keep this as your number-one resolution, you’ll not only improve your financial situation, you’ll be more optimistic about your retirement and your future.

Be sure to make retirement planning a priority for 2017 by contacting your financial advisor and setting up a meeting to discuss your options and the best financial tools for your portfolio.

^*HealthView Services’ 2015 Retirement Health Care Cost Data Report

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investments or products may be appropriate for you, consult with your financial advisor.

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Source: Newsletters

Make Saving More Money for Retirement Your #1 New Year’s Resolution