How the Strategies Differ Another school year is nearly over. If you have kids, you know how fast time flies. One day you’re dropping them off at daycare or sending them to kindergarten. The next thing you know, they’re preparing for college. Blink and you might miss it.
If your child is in middle school or even college, you may feel like you’re behind on their college savings. Of course, at the same time, you may also feel like you’re behind on your retirement savings. Both are big financial goals, and both are important, but there’s also only so much money available to contribute to savings. How do you balance the two goals? Savings for college is much different than saving for retirement. There are different variables and factors involved. Below are a few things to consider. Time Horizon Time horizon is the amount of time you have before you actually need to use your savings. The longer your time horizon, the more risk you can afford to take. If you suffer a loss, you have time to recover, but as your time horizon shortens, you may want to become more conservative since you don’t have as much time to recover losses. Depending on your age, your time horizon for college may be much shorter than your time horizon for retirement. You could have decades until retirement. On the other hand, if you have a child already in elementary or middle school, you may have 10 years or less until they’re ready for college. Your time horizon should influence your saving strategy for both retirement and college savings. Don’t apply the same allocation to both goals. Rather, look at your time horizon and determine how much risk you can afford. Unless your kids are very young, you likely don’t have time in your college strategy to recover from a sizable loss, so you may want to take a more risk-averse position. Amount According to the College Board, the average cost of tuition and fees in the 2017-18 school year at an in-state public college was $9,970. For an out-of-state public school, the cost was $25,620 and a private school was $34,740.¹ [JR1] If your child attends college for four or five years, it’s possible the cost could be over six figures. That’s a sizable amount, but it’s still not close to what you’ll need for retirement. Consider that you may live in retirement for several decades. You’ll need enough assets to cover your bills, your discretionary spending and more. Consider that Fidelity estimates the average retired couple will need $285,000 just to cover medical expenses. ² While college is big financial goal, it’s usually not as sizable as your retirement need. Don’t delay saving for retirement. It’s too big of a goal to fund at the last minute. Even if you have to start small, it pays to start saving early. Alternative Funding It’s also important to remember that your child has other funding options available for college. They could earn a scholarship or a grant. They may qualify for financial aid. Student loans aren’t popular, but they are an effective funding tool. You may not have similar options available for retirement. You’ll likely receive Social Security benefits, but those payments usually aren’t enough to fund a full retirement. You’ll likely need to rely on your savings to make up the difference. While saving for college is important, don’t let it interfere with your retirement savings. Ready to plan your college and retirement strategies? Let’s talk about it. Contact us today at Beacon Retirement Planning Group. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation. 1 https://www.collegedata.com/en/pay-your-way/college-sticker-shock/how-much-does-college-cost/whats-the-price-tag-for-a-college-education/ 2 https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18786 - 2019/4/18 [JR1]Cite source
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 Remember hunting for Easter eggs as a child? There were few thrills more exciting than racing around the yard or a park to find as many eggs as possible. Your eggs may have contained candy, money or other prizes.
As an adult, you may be too old to participate in a traditional Easter egg hunt. However, there may be another egg hunt that could be far more lucrative. It’s a hunt for hidden retirement assets. Many people fail to inventory their available retirement assets. In doing so, they fail to identify assets that could play an important role in their retirement strategy. Below are four often-overlooked retirement assets. Some of these eggs may be hiding in plain sight. If you haven’t created an inventory of your retirement assets, now may be the time to do so. You could have some valuable eggs waiting to be found. Old 401(k) Plans There was a time when workers stayed with one company for most of their career. Those days are long gone. According to data from the Bureau of Labor Statistics, wage and salaried workers have been with their current employer for a median of only 4.6 years. In fact, the average worker changes jobs 11 times from age 18 to 48.1 When you leave a job, you also may leave behind a 401(k) balance. It’s possible that you still have balances held in former employers’ plans. Make a list of old employers and identify the ones where you may have participated in a 401(k) plan, profit-sharing plan or other qualified retirement plan. If you have an old balance, you could roll it over into an IRA and invest it according to your strategy. Life Insurance Cash Value Do you own permanent life insurance policies? If so, those policies may have a cash value that you can use in retirement. Permanent life insurance policies have a death benefit, but they also have what’s called a cash value account. When you make a premium payment, a portion of that payment is allocated toward the cash value. Your cash value account grows on a tax-deferred basis. The method of potential growth depends on the type of policy. Whole life insurance pays dividends, while universal life policies pay interest. Variable universal life policies allow you to invest in the financial markets. Depending on your type of policy and how long you’ve owned the insurance, you could have a significant amount of cash value. You can use that cash value to provide supplemental income in retirement. For instance, you can withdraw your premiums tax-free. You can also take tax-free loans from the policy, though the loans do have to be repaid. Review your life insurance policies and see whether you’ve accumulated cash value that you can use in retirement. Home Equity Thinking of downsizing in retirement? That could be a smart move. When you downsize to a smaller home, you may be able to reduce your costs for housing, taxes, maintenance, insurance and more. If you have substantial equity in your home, you could also give your retirement savings a nice boost. For example, you could pocket the equity from the sale of your home and add it to your retirement assets. Delaying Social Security Technically, this strategy doesn’t represent an asset, but it is a simple way to increase your retirement income. You can file for full Social Security benefits once you reach full retirement age (FRA). Most people’s FRA lands between their 66th and 67th birthdays.2 However, you don’t have to file at your FRA. If you choose to delay your filing, Social Security will increase your benefit by 8 percent for each year that you wait up to age 70. That 8 percent increase is a permanent credit, so it could represent a significant pay raise, especially if you delay your benefit filing for several years.3 Ready to find the hidden eggs in your retirement strategy? Let’s talk about it. Contact us today at Beacon Retirement Planning Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://www.nerdwallet.com/blog/investing/leaving-401k-behind-job-change-costly/ 2https://www.ssa.gov/planners/retire/retirechart.html 3https://www.ssa.gov/planners/retire/delayret.html Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18692 - 2019/3/26  Everyone is familiar with the popular saying “April showers bring May flowers.” The arrival of spring also means the arrival of rainy weather. While rainy days are never fun, they signal the end of winter and the coming arrival of blossoming flowers and warmer weather. In retirement you might be able to avoid rainy weather by moving to a tropical climate.
Of course, you may not be able to avoid rainy days with regard to your financial strategy. Emergencies happen at all stages of life, including after you retire. Taxes could be a challenge and may stretch your budget. Medical expenses and long-term care costs could pose a financial threat. Market risk is always a concern. One way to protect yourself from emergencies and unexpected costs is to boost your guaranteed* income in retirement. The more predictable, guaranteed* income you have, the less vulnerable you’ll be to unplanned costs. Not sure whether you have enough guaranteed* income in retirement? Below is a three-step process you can use to evaluate your income and take action. If you haven’t projected your retirement income, now may be the time to do so. Step 1: Establish your income floor. Your income floor is the minimum amount of income you need to cover your most important expenses. The best way to determine your income floor is to develop a retirement budget. Granted, you can’t predict every cost you’ll face in retirement. However, you can probably make a reasonable projection based on your current expenses and your desired standard of living. Highlight the expenses that are most important. These will include all your fixed expenses, which are the bills that have to be paid every month no matter what. You also may include a few discretionary costs, which are expenses that could fluctuate from month to month. For example, your most important expenses may include:
Total up your most important expenses and see how much they will cost on a monthly basis. Also, don’t forget inflation. It’s likely that prices will rise slightly between now and your retirement date. The sum of your most important expenses is your income floor. That’s the minimum amount of income you need each month to live in retirement. Step 2: Project your guaranteed* income. The next step is to project your guaranteed* income in retirement. Guaranteed* income is cash flow that will last no matter how long you live and that isn’t affected by market performance or other economic factors. Social Security and pension benefits are good examples of guaranteed* lifetime income. The amounts don’t fluctuate from month to month, and the income lasts for life. Distributions from 401(k) plans, IRAs or other investment vehicles may not be guaranteed*, so you don’t want to include them in this calculation. Add up your projected guaranteed* income. Does it exceed your income floor? If so, you have enough to meet your bare minimum expenses. If it doesn’t, you may want to increase your guaranteed* retirement income. Steps 3: Fill in the gaps. Ideally, you don’t just want your guaranteed* income to match your income floor. You want it to exceed your income floor by a substantial amount. That way you can build a rainy day fund to cover life’s unexpected costs. Extra guaranteed* income could help you pay for medical bills, home repairs or other emergency costs. One of the most effective ways to boost your guaranteed* income is to include an annuity in your retirement strategy. Many annuities offer optional riders known as guaranteed* minimum withdrawal benefits. These benefits allow you to withdraw up to a certain amount each year. As long as your withdrawal stays within the limits, the distribution is guaranteed* for life. It doesn’t matter how long you live or how the market performs. Your income remains consistent and predictable. Talk to a financial professional about how to use an annuity to boost your guaranteed* retirement income. They can help you determine your income floor, project your retirement income and take action to protect yourself from financial rainy days. Ready to boost your retirement strategy? Let’s talk about it. Contact us today at Beacon Retirement Planning Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18686 - 2019/3/25  If you’re a college basketball fan, this is your favorite time of year. March Madness is in full swing. That means a full schedule of games every weekend, buzzer-beating finishes and unbelievable upsets. If you’re like many fans, your bracket is already a mess.
It’s nearly impossible to predict the outcome of the NCAA Tournament. According to a Duke University professor, the odds of predicting a perfect bracket are 1 in 2.4 trillion.1 Even getting the Final Four correct can be difficult: In last year’s Capital One Bracket Challenge, only 54 entries had the Final Four teams correct.2 It may also feel like it’s impossible to predict the movement of the financial markets. The major indexes can swing in any direction on any given day, influenced by an infinite number of events and updates from around the world. In the short term, it’s virtually impossible to predict where the markets are headed. But can you use the winner of the NCAA Tournament to make a market prediction? Researchers from Schaeffer’s Investment Research recently studied S&P 500 index returns from April to December along with past NCAA Tournament champions to see if there’s any correlation between the two. The research found that the market has consistently had positive annual returns when the NCAA Tournament champion has come from the Southeastern Conference (SEC). That’s happened 11 times. The S&P 500 has gone on to have a positive return the rest of the year in each of those instances. The median return from April to December when the champion is an SEC team is 9.56 percent.3 The market has also had positive returns at least 75 percent of the time when the champion has come from the ACC, Pac-12 or Big East. The ACC and Pac-12 have produced the most champions, with each conference winning 16 times. During years in which the ACC has won, the market had a positive return 75 percent of the time, with a median return of 9.59 percent. When the Pac-12 wins, the market has been positive 88 percent of the time, with a median return of 8.91 percent.3 When does the S&P 500 have a negative return from April to December? When the NCAA Tournament winner comes from the Big Ten Conference. In those years, the market has been positive only 36 percent of the time, with a median return of -4.76 percent.3 Coincidence Isn’t the Same Thing as Correlation Of course, just because these patterns exist doesn’t mean there’s an actual correlation between the tournament winner and the returns of the market. There’s no factor tying the championship outcome to the S&P 500, so these patterns are entirely coincidental. They shouldn’t be used to try to make any kind of market predictions. If you want to stabilize your investment performance and reduce volatility, there are other steps you can take besides relying on the outcome of a basketball tournament. Below are a few steps to consider: Review your allocation. As you get older and approach retirement, it’s natural to become less tolerant of risk. You may not be able to stomach the ups and downs of the market like you used to. That’s understandable. After all, you’ll need to rely on those savings for income in the near future. Now could be a good time to review your allocation with your financial professional. It’s possible that your current allocation isn’t right for your goals, needs and risk tolerance. Rebalance. The market moves up and down, but not all asset classes move in the same direction at the same time. As some asset classes increase in value, others decline. That means your actual allocation is always in a state of flux. Over time, it may become far different than your desired allocation. It’s helpful to regularly rebalance your portfolio so it always adjusts back to your target allocation. When you rebalance, you sell some of the assets that have increased in value and buy those that have declined. That can help you lock in gains and stay aligned with your desired strategy. Use an annuity. An annuity can be an effective tool to potentially increase your assets but also limit downside risk. For example, a fixed indexed annuity pays an interest rate based on the performance of an index, like the S&P 500. The better the index performs over a defined period, the higher your rate. If it performs poorly, you may get little or no interest. In a fixed indexed annuity, however, your principal is guaranteed*. There’s no risk of loss due to market performance. That means you get upside potential without the volatility. Want to take steps to make your portfolio less volatile? Don’t look toward coincidental trends. Instead, implement a thoughtful strategy. Contact us today at Beacon Retirement Planning Group. We can help you review your portfolio and find areas for improvement. Let’s connect soon and start the conversation. 1https://ftw.usatoday.com/2015/03/duke-math-professor-says-odds-of-a-perfect-bracket-are-one-in-2-4-trillion 2https://www.ncaa.com/news/basketball-men/bracketiq/2018-03-26/54-ncaa-brackets-correctly-predicted-final-four 3https://www.schaeffersresearch.com/content/analysis/2017/03/23/march-madness-indicator-why-the-stock-market-should-root-for-kentucky *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18583 - 2019/2/27  The deadline for filing your 2018 tax return is right around the corner. Have you filed your return yet? If so, were you satisfied with the outcome? Or were you surprised by how much you paid in taxes last year?
The recent tax law dramatically changed the tax code. For many Americans, the law means reduced taxes. If you don’t plan accordingly, however, it’s possible that you could owe money to the IRS after your filing. It’s also possible that you could pay more in taxes than necessary. Now is a great time to review your strategy and identify action steps that could reduce your tax exposure. If you haven’t reviewed your financial plan recently, you may be missing out on a number of tax-efficient tools and products. Below are a few tips to consider as you review your taxes: Review your deductions. One of the biggest changes of the Tax Cuts and Jobs Act is the elimination and reduction of a wide range of deductions. Most itemized deductions were eliminated, including those for alimony payments and interest on many types of home equity loans. Caps were also implemented for state, local and property tax deductions. The law also eliminated personal exemptions.1 To make up for these changes, the law more than doubled the standard deduction.1 For many people, that means it will be more advantageous to take the standard deduction than to itemize deductions. If you’ve planned your spending based on the ability to itemize and deduct certain expenses, you may want to reconsider your strategy. Those deductions may no longer be allowed under the new law. Check your withholding amount. The law also reduced tax rates across the board and changed the income brackets for each rate level. As a result, many employers adjusted their withholding amounts. Not all did, however. And some may have adjusted their withholdings incorrectly. In fact, according to a study from the Government Accountability Office, 30 million people, or just over 20 percent of taxpayers, are not withholding enough money from their paychecks to cover taxes.2 Are you part of that group? If you’re not sure, talk to your financial professional about whether you should increase your withholdings. Maximize your tax-deferred savings. Tax deferral is a great way to reduce current taxes and save for the future. In a tax-deferred account, you don’t pay taxes on growth in the current year as long as your money stays in the account. You may face taxes in the future when you take a distribution. Many qualified retirement accounts, such as 401(k) plans and IRAs, offer tax-deferred growth. In 2019 you can contribute up to $19,000 to your 401(k), plus an additional $6,000 if you are age 50 or older. You can put as much as $6,000 into an IRA, or up to $7,000 if you’re 50 or older.3 Want more tax deferral beyond your 401(k) and IRA? Consider a deferred annuity. Annuities offer tax-deferred growth. They also offer a variety of ways to increase your assets. Some pay a fixed interest rate and have no downside risk. Others let you participate in the financial markets according to your risk tolerance and goals. A financial professional can help you find the right annuity for your strategy. Develop sources of tax-efficient retirement income. Taxes don’t stop when you quit working. If you’re approaching retirement, now may be the time to plan ahead and minimize your future tax exposure. You can take steps today to create tax-efficient income for your retirement. For example, distributions from a Roth IRA are tax-free assuming you’re over age 59½. You may want to start contributing to a Roth or even consider converting your traditional IRA into a Roth. You can also use a permanent life insurance policy as a source of tax-efficient income. You can withdraw your premiums from your life insurance cash value tax-free. Also, loans from life insurance policies are tax-free distributions. You may want to discuss with your financial professional how life insurance could reduce your future taxes in retirement. Ready to take control of your tax strategy in 2019? Let’s talk about it. Contact us today at Beacon Retirement Planning Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968 2https://www.cnbc.com/2018/08/01/30-million-americans-are-not-withholding-enough-pay-for-taxes.html 3https://www.cnbc.com/2018/11/01/heres-how-much-you-can-sock-away-toward-retirement-in-2019.html Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18582 - 2019/2/27  Worried about the direction the financial markets have taken over the past few months? You’re not alone. After nine consecutive years of growth, the markets ended 2018 on a down note. The S&P 500 finished the year down more than 6 percent, the first time it has ever finished a year negative after being positive through the first three quarters.1
In fact, some indexes have already entered bear market territory. The Nasdaq dropped more than 23 percent from its Aug. 29 high. The Wilshire 5000 and Russell 2000 also dropped more than 20 percent from their respective peaks in early September.1 If you’re approaching retirement, these losses could be stressful. When you’re younger and just starting your career, you have time to absorb losses and recover. That may not be the case if you’re only a few years from retirement. You’ll soon need to use your assets to generate income. A substantial decline may force you to delay retirement or make cuts to your planned lifestyle. Fortunately, there are steps you can take to protect your nest egg and your retirement. Below are three tools that can help you reduce your exposure to downside risk. Talk to your financial professional to see how these may play a role in your financial strategy. Fixed Indexed Annuity When it comes to investing, risk and return usually go hand in hand. Those assets that offer the most potential return often come with the highest exposure to risk. Assets that have little risk also offer little potential growth. It’s difficult to find growth opportunities that don’t have downside market risk. There are some tools available, though. One is a fixed indexed annuity. In a fixed indexed annuity, allows your money the potential to grow on a tax-deferred basis. The potential growth comes in the form of interest credited to the contract typically annually. Your interest credited each year is based on the return of a specific external index, like the S&P 500. The better the index performs in a given period, the higher the potential for the interest credits, up to a certain limit. If the index performs poorly, you may receive less or zero interest, but your contract won’t decline in value. Fixed indexed annuities have guarantees* on the value of the contract. That means you’ll never lose premium because of market declines. A fixed indexed annuity could be an effective way to plan for retirement income without exposing yourself to market risk. Deferred Income Annuity Are you concerned about your ability to generate retirement income in the future? Or are you worried that your retirement income isn’t guaranteed*? A deferred income annuity, also known as a longevity annuity, could be an effective option. With a deferred income annuity, you contribute a lump-sum amount and pick a date in the future to begin receiving income. At the specified time, the annuity company will begin paying you an income stream that’s guaranteed* for life, no matter how long you live. Work with your financial professional to project your income and see if a deferred income annuity can help you fill any gaps. Life Insurance You’ve probably purchased life insurance at some point in your life with the goal of protecting your spouse, children or other loved ones. Life insurance is a highly effective protection tool, but it can also do more. Some life insurance policies have a cash value account. Each time you make a premium payment, a portion goes into the cash value. Those funds grow on a tax-deferred basis over time. The growth usually comes in the form of dividends or interest, depending on the policy. You can also use the life insurance policy to generate tax-free income in retirement via loans or withdrawals. If you have a life insurance policy, you may want to explore how you can use it to achieve low-risk, tax-deferred growth and possibly create supplemental income in the future. Or you may want to look at new policies and see how they can help you protect your assets. Ready to protect your nest egg? Let’s talk about it. Contact us at Beacon Retirement Planning Group. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation. 1https://www.nasdaq.com/article/is-a-recession-coming-heres-how-to-survive-cm1081931 *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18412 - 2019/1/16 Volatility on Valentine’s Day: How Couples Can Overcome Disagreements About Investment Risk2/12/2019  Valentine’s Day is supposed to be a day for romance and reconnection. For many couples, however, this time of year could be marked by disagreements about money. Nearly half of all married couples argue about financial issues.1
With the new year just starting and tax season right around the corner, many people use this time to evaluate their spending, earnings and financial performance over the previous year. That analysis could reopen sore spots about money management. The performance of the financial markets over the past few months could also be a source for disagreement among couples, especially those who have differing investment styles. After starting strong for the first three quarters of the year, the S&P 500 finished with an epic meltdown in the fourth quarter. The index ended the year down 7 percent, the first time in history it’s finished the year negative after being positive for the first three quarters.2 Do you and your spouse disagree about investing styles? Does one of you take a more aggressive stance while the other prefers to play it safe? Below are a few helpful tips on how you and your spouse can meet in the middle and get past your investment-related disagreements: Draft an investment policy statement. Many couples disagree about their investment approach because they’ve never developed a formal investment strategy. They generally know they want to save for retirement, but they’ve never discussed their specific objectives or tactics. An investment policy statement does just that. Your investment policy statement is a written document that states your goals, acceptable risks and the steps you will take to reach your objectives. It outlines which types of investments are appropriate for your strategy and which are not. You can use your investment policy statement as a guide for making future decisions. The process of developing the investment policy statement could be beneficial for many couples. You’re forced to share your differing opinions and compromise to reach a strategy. Those conversations could help you work out differences and find areas where you agree, which could diffuse future arguments. Develop a retirement income plan. Often, arguments are fueled by uncertainty about the future. You’re unsure of when you’ll be able to retire or how much more you need to save, so that heightens your anxiety and sharpens disagreements. You may be able to avoid arguments by eliminating the uncertainty. Work with your financial professional to develop a retirement income plan. You can project your future retirement income from sources such as Social Security, an employer pension and even your own savings. You can also build a retirement budget to estimate your spending. These two projections should give you an idea of how close you are to reaching your goals, how much more you need to save and how much risk you should take to achieve growth. Don’t avoid the conversation. Have you and your spouse agreed to disagree about your differing investment styles? Do you avoid the conversation? Or do you go it alone with your individual accounts so you don’t have to discuss issues that may lead to disagreement? While you may not want to disagree or argue, it’s also not helpful to avoid the conversation. If you each have differing styles and don’t have a cohesive plan, you could be missing out on opportunity. For example, assume your spouse is aggressive with his or her investment style and takes on a substantial amount of risk. Perhaps you’re conservative and choose assets that offer little return potential but also have little chance of loss. You may feel that the “go it alone” approach works because you each invest according to your comfort level and you avoid arguments. By avoiding the conversation, however, you may be missing out on opportunities to meet in the middle and achieve better performance. For example, you could find an allocation that has growth potential and reduced risk. You could use tools such as annuities that offer growth without downside exposure. The only way to find these opportunities is to discuss your differing approaches and look for middle ground. Work with a professional. Finally, you may find it helpful to bring in a third party, like a financial professional. They can give objective, impartial feedback and also provide information and analysis that may change your approach. They can also help you develop a retirement strategy and an investment policy statement to guide your decision-making. Ready to overcome your investment disagreements with your spouse? Let’s talk about it. Contact us today at Beacon Retirement Planning Group. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://nypost.com/2017/08/03/the-reasons-most-couples-argue-about-money/ 2https://www.cnbc.com/2018/12/31/the-sp-500-will-make-history-when-it-ends-the-year-with-a-loss.html Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18408 - 2019/1/14  What’s your greatest financial asset? Your home? Your retirement savings? A business? It may be your ability to work and generate income. If you’re like many Americans, however, you may underestimate the risk associated with your ability to work. According to the Council for Disability Awareness, 1 in 4 working adults over the age of 20 will suffer a disability that prevents them from working at some point in life.1 Think that figure is high? Consider the wide range of medical issues that often cause disability, such as cancer, heart disease and even joint pain. Long-term disability can be financially catastrophic because it takes away your ability to earn income. That creates other financial challenges, like medical costs, debt issues and possibly even the depletion of your savings. If you become disabled after you reach retirement age, you may be able to file for Social Security and simply choose to retire. But what happens if you become disabled in your 50s or even earlier? How do you replace your income? Below are a few options for creating income after suffering a disability. As you will see, there’s no simple solution. The best strategy is to plan ahead and take steps to minimize any potential risk. A financial professional can help you develop a plan. Social Security Social Security is primarily a retirement income benefit, but it also provides benefits to those who are disabled. However, it can be difficult to qualify for benefits. Many people have to apply or appeal several times before their disability filing is approved. Social Security bases the approval decision on several factors. One is your ability to work. If you earn income from a job, even a part-time one, your application may not be approved. Another factor is the severity of the disability. Social Security often reviews medical information and doctor input when making this decision. While Social Security could provide some income, it’s not a certainty that you would be approved. Workers’ Compensation If you suffered your disability on the job, you may be able to qualify for workers’ compensation. As is the case with Social Security, it can be difficult to win workers’ compensation benefits. Your employer may challenge your application, and you may even need help from a legal professional. Generally, workers’ compensation benefits are based on the severity of your injury and your ability to generate income. You may need medical evidence or testimony from a doctor stating that you are unable to work. Again, this could be a source of income, but it’s not a sure thing. Retirement Assets Are you one of the millions of Americans using a 401(k) or IRA to save for retirement? If so, you may be tempted to tap into those accounts to fund your expenses due to disability. However, doing so may be costly and could put you in a difficult financial position in the future. Your distributions from your 401(k) or IRA are likely to be taxed as income. Also, if you’re under age 59½, you could face early distribution penalties. You may be able to get an exception because of your disability, but that’s not a sure thing. Most important, though, if you tap into your qualified plans early, you may deplete those accounts before retirement. You could outlive your assets and have little money to pay for bills and medical costs later in life. While it may be tempting to tap into your qualified accounts, try to look for alternatives so you don’t deplete your savings. Disability Insurance One of the most effective protection tools at your disposal is long-term disability insurance. You pay premiums today but receive a monthly benefit as an income replacement if you become disabled in the future. Some policies will replace nearly all of your income, and many don’t require you to be fully disabled. You simply have to be too disabled to continue in your current occupation. A financial professional can help you determine whether disability insurance is right for you. Ready to protect yourself against disability risk? Let’s talk about it. Contact us today at Beacon Retirement Planning. We can help you analyze your risk and implement a plan. Let’s connect soon and start the conversation. 1http://disabilitycanhappen.org/overview/ Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18185 - 2018/10/22  If you’re a financial provider for a spouse, children or other loved ones, life insurance is probably an important part of your financial strategy. Life insurance protects your loved ones and dependents after you pass away. They can use the tax-free benefit to pay bills, support their lifestyle and overcome other challenges. Life insurance is certainly important when you’re working and have children in the home, but what about after you retire? Do you still need coverage if your children are grown? Many retirees would say no. With no dependent children in the house and a substantial amount of retirement assets, surely you don’t need to keep paying those life insurance premiums. However, life insurance can still serve an important purpose in retirement. In fact, you could use it to achieve some big goals and minimize dangerous risks. Below are a few ways in which you can use life insurance in retirement. A financial professional can help you analyze your policies and options, and then decide which strategies will best help you reach your goals. Spousal Support Today’s retirees are living longer than ever. According to the Society of Actuaries, a married 65-year-old couple would have a 50 percent chance of at least one spouse living to age 94 and a 25 percent chance of one spouse living to 98.1 That means you or your spouse could potentially live in retirement for more than 30 years. A long life is always a good thing, but it can put a strain on your savings. Your savings have to last longer. You also may face high bills for health care and long-term care, especially in the later years of retirement. Those costs could deplete your assets and leave your surviving spouse in a challenging situation. A permanent life insurance policy can provide a tax-free benefit to your spouse after your death. Your spouse can use those funds to pay outstanding bills and live comfortably during the remaining years of his or her retirement. Legacy Do you want to leave a legacy for your loved ones or maybe for a favorite charity? There are a number of estate planning tools you can use to accomplish that goal. For example, you can use a trust to provide specific instructions and to guide the distribution of assets. However, life insurance is also an effective estate planning tool. You can use it to increase the amount you leave to your loved ones. Life insurance also avoids probate, which means your beneficiaries can receive the funds quickly. Your heirs can also use the life insurance death benefit to pay for legal fees and other costs associated with the settlement of your estate. You may have purchased life insurance to protect your children when they were dependents. Just because they’re grown doesn’t mean they can’t still benefit from your life insurance policy. You can use it to leave a legacy for them or other loved ones after you pass away. Tax-Efficient Income Life insurance is primarily about the death benefit, but it can also be a source of supplemental income. Permanent life insurance policies have a cash value account. When you pay your premium, a portion goes toward the cost of insurance, and the remainder goes into your cash value. The cash value then accumulates on a tax-deferred basis. You have the ability to take tax-free loans from your cash value. That could be helpful in retirement if you ever need supplemental income for emergencies or other unexpected costs. You pay back the loan with your premium over time. Any unpaid balance is deducted from the death benefit after you pass away. Ready to explore your life insurance options? Let’s talk about it. Contact us today at Beacon Retirement Planning. We can help you review your goals and develop a strategy. Let’s connect soon and start the conversation. 1https://www.fidelity.com/viewpoints/retirement/longevity Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18214 - 2018/11/1  If you’re approaching retirement, you likely have a number of big projects on your plate. You may be weighing your options for things like Social Security benefits, investment choices and even decisions about lifestyle. One of your biggest decisions may be when and how to file for Medicare. Health care is likely to be a major expense in your retirement. According to a Fidelity survey, the average 65-year-old couple can expect to spend nearly $245,000 on health care expenses in retirement.1 Keep in mind, those are out-of-pocket costs. That means Medicare is likely to pick up an even larger tab. You may be unsure of which options you should choose, when you should file for coverage and what services come with your Medicare enrollment. Below are a few important facts to guide you through the process. You have several options to choose from. Medicare is the general name for the system that provides health care coverage to retirees. However, there are actually several different components to Medicare coverage. You can choose the options that best fit your needs and your budget. Traditional Medicare includes Part A and Part B. Part A generally covers hospitalization and some skilled nursing care to treat a specific condition. Part B covers other components such as lab work, ambulance costs, mental health care, costs for equipment like wheelchairs and more. You can also choose something called Medicare Advantage, which is often referred to as “Part C.” This is a combination of Parts A and B, but it’s offered through a private insurer rather than through Medicare directly. Medicare Advantage may offer you greater access to specific doctors. Finally, there are also Medicare Part D and supplemental policies. Medicare Part D provides coverage for prescription drugs. Supplemental coverage helps you pay out-of-pocket costs like copays, deductibles and more. You have several options available, so it’s important you consider all of them before making your selection. Your selections aren’t permanent. Many new retirees hesitate to choose a Medicare option because they’re afraid they’ll make the wrong selection. It’s certainly hard to know in advance which types of coverage you will need in retirement. That’s why Medicare offers an annual open enrollment period in which you can change your coverage. Your initial selections aren’t permanent. You’ll have an opportunity to change them later if you find they don’t fit your budget or they don’t give you access to certain providers. It may be wise to review your coverage annually to make sure it still fits your needs. You don’t have to start Medicare and Social Security at the same time. Many retirees start Medicare and Social Security at the same time, but you don’t have to. It’s possible you may start Social Security benefits while your spouse continues employment, thus providing employer-based medical coverage, or you may have some form of extended coverage from your employer after you retire. Similarly, you may be ready for Medicare coverage but want to delay Social Security benefits. By deferring payments, you may be able to increase your potential benefits. When you enroll through Social Security, you can state whether you’re filing for Medicare, Social Security or both. You get free health care services with your Medicare coverage. Many retirees don’t realize they’re entitled to free services once they start coverage. For instance, you get a free physical as a form of preventive care. You may also get a vision test, a measurement of your body mass index and a screening for depression. And you may also schedule free annual wellness visits with your doctor to catch issues before they become serious. Why does Medicare offer these free services? As you can imagine, treating a medical issue is often more costly than preventing one. Medicare wants you to be healthy and to take preventive action. Have questions about health care and other major retirement expenses? We welcome an opportunity to help you identify your needs and develop a plan of action. 1 https://www.fidelity.com/about-fidelity/employer-services/health-care-costs-for-couples-retirement-rise This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 15717 – 2016/5/31 |
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Kelly J. Carter: CA Ins Lic # 0E89958 | Steven A. Conte: CA Ins Lic # 0E36640
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Advisory Services offered through Change Path, LLC an Investment Advisor. Beacon Retirement Planning Group, Inc. and Change Path, LLC are not affiliated.
Licensed Insurance Professional. Respond and learn how insurance and annuities can positively impact your retirement. This material has been provided by a licensed insurance professional for informational and educational purposes only and is not endorsed or affiliated with the Social Security Administration or any government agency. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
Annuities are insurance products backed by the claims-paying ability of the issuing company; they are not FDIC insured; are not obligations or deposits of, and are not guaranteed or underwritten by any bank, savings and loan or credit union or its affiliates; are unrelated to and not a condition of the provision or term of any banking service or activity.
Licensed Insurance Professional. Respond and learn how insurance and annuities can positively impact your retirement. This material has been provided by a licensed insurance professional for informational and educational purposes only and is not endorsed or affiliated with the Social Security Administration or any government agency. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.
Annuities are insurance products backed by the claims-paying ability of the issuing company; they are not FDIC insured; are not obligations or deposits of, and are not guaranteed or underwritten by any bank, savings and loan or credit union or its affiliates; are unrelated to and not a condition of the provision or term of any banking service or activity.