It’s never too early, or too late, to start saving for retirement. No matter where you are in your retirement strategy — or how much you need to save for other life goals — we can provide guidance on saving and investing that will help you retire the way you want. Whether you’re a long-time employee or just out of college and starting your first job, we’ll share tips that fit your unique circumstances.
Knowing what you want in retirement can help you build a successful, personalized strategy. The 20% of Americans who are financially confident have a plan and stick to it.1
When you’re preparing for retirement, take a look at your budget, determine what your monthly expenses are compared to your income, and see what additional money you will have for leisure, healthcare costs, and more. People are living longer. Will you be able to cover 20 to 30 years in retirement based on what you’ve saved and your budget?
Having guaranteed income, such as through annuities, can help provide a steady stream of money in retirement.
The best time is now. Saving for both retirement and other major expenses, like a mortgage or college, can be complicated, but there are many strategies to help you get started and go beyond Social Security. Consider tax-deferred investments. For example, if your employer offers a 401(k) plan, you may want to max out your contributions. Also consider IRAs, annuities,2 and whole life insurance for a mix of cash value assets and guaranteed income.
A qualified retirement plan is a type of plan established by an employer for the company’s employees that allows employees to defer a portion of their salaries into the plan with certain tax benefits. Examples of this include employer-funded 401(k)s or pensions.
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Many of us want to leave an impact that lasts a lifetime and beyond. You don’t need to be a millionaire to leave behind a meaningful legacy to your family, and you don’t need a castle to have an estate. To make sure your estate is in order and your heirs are taken care of, look into getting a will, a living will, and life insurance.*
Your estate simply refers to the sum total of your finances, which includes property and real estate, money in the bank, cash value you’ve built in a whole life insurance policy, stocks and bonds, retirement accounts, financial assets, and possessions – basically anything that remains after accounting for unpaid loans.
Depending on what you’re looking to save for, an investment in a college savings plan, such as a 529 plan, may be right for you. It can provide you the opportunity to have your dollars grow over time and provide your child a gift for their future. Another savings option is life insurance, particularly permanent life insurance (like whole life insurance). Besides the important guaranteed death benefit a whole life insurance policy provides, it also offers the tax-deferred accumulation of cash value through dividends.** In addition, a whole life policy may allow access to cash, tax free, throughout your lifetime to help realize your dreams—like paying for college for the kids.***
Without a will that sets out your choices, the state in which you live may make all the decisions. Your estate may also be subject to federal and state taxes. Handling your affairs could take months. Use an estate lawyer – licensed within your state – to ensure it gets done right.
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Planning for senior care, often called eldercare, and protecting dependents after you’re gone presents financial challenges, and Medicare may not cover it all. Care provided to someone for non-medical assistance with daily activities, such as bathing, dressing, and being mobile, is referred to as custodial care.
The good news is that you can better prepare for long-term care if you start planning today for your special needs children or elderly care for yourself.
Whole life insurance is an option to consider for both retirement and elder care. It can provide guaranteed coverage for life, with the potential to accumulate cash value, which you may be able to access if you need to care for a parent or dependents. Some policies offer optional benefits to help cover the health needs of a covered individual.
Talking with your parents now can save you time and money, and let you tackle potential problems ahead of time. Spending money on legal advice may be the last thing you want to do if your parents are of limited means. Knowledgeable advice, though, can be critical in assessing issues, making vital decisions, and putting paperwork in order.
It can, via a supplemental needs trust. This type of trust is sometimes a tool to provide for a special needs child who may also receive government benefits such as Supplemental Security Income and Medicaid. Such a trust is established to manage assets for a beneficiary, in this case a child with special needs. The assets may be beyond the reach of creditors of the child and parents, may be for the benefit of the child but may not be owned by the child. Assets in the trust may be used to pay for rehabilitation, educational services or medical services not covered by other sources. They can be used towards quality-of-life enhancements such as entertainment or vacations but may not be able to be used to pay for services that a government program normally covers.
Many special needs trusts are empty when established and are expected to receive future funding, usually the proceeds of life insurance. While sometimes funded by life insurance proceeds, the trust can also be funded by cash gifts or investments such as retirement fund proceeds or individual retirement accounts (IRAs) if the IRA custodian allows it. Funding can also be accomplished through specific instructions left in a will.
Regardless of the source of funds, you may want to discuss with your counsel the benefits of naming the trust as the recipient for the benefit of the child, rather than your child him or herself. ****
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Medicare is the government health care program for people 65 and over, and for younger people with disabilities. Medicare coverage plays an important role in containing medical costs as you age. But its benefits may not pay for everything—such as most dental care, eye exams and eyeglasses, and hearing aids.****
Whole life insurance is an option to consider for hedging against healthcare costs in retirement. It can provide guaranteed coverage for life, with the potential to accumulate cash value, which is money you can apply to healthcare costs.
If you are an employee with benefits, an HSA helps you cover healthcare expenses with tax-deductible funds you set aside from your paycheck. They are on the rise as employees look for ways to manage the costs of high-deductible health plans (HDHPs) – plans in which people pay more out-of-pocket costs before insurance kicks in. Ask your insurance company or HR department if you can open an HSA.
Supplemental insurance, which refers to insurance coverage like accident, critical illness, cancer, and hospital indemnity, can alleviate the out-of-pocket expenses associated with HDHPs.
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