News

1
Dec

Give yourself the gift of peace of mind with Life Insurance

Give yourself the gift of peace of mind with Life Insurance

One of the biggest stressors of the holiday season can be money or more specifically, not having enough to purchase the presents we think we should. In the U.S., we live in a country that is obsessed with stuff — both giving and receiving it. While there is nothing wrong with having nice things, there comes a point when the getting of these things can become very stressful. Instead of accumulating more stuff you really don’t need, an alternative is giving yourself a gift that can help protect you and your family versus causing more stress. One such gift is life insurance.

Life insurance can be a great way to show the people you care about the most, just how much you love them. During this season of gift-giving, people spend $128 on average on their loved one for a special occasion. Yet only 55% say they have life insurance, which can be just $13 a month.1

Life insurance is designed to provide financial protection for your loved ones in the event you were to pass away unexpectedly. But what could this really mean for your family? It may seem counterintuitive that empty nesters or retirees need life insurance, but some still have dependents, such as disabled adult children. Many also still have financial obligations, such as the mortgage on a home or second home, that could become a burden if a spouse died or becomes disabled. More importantly, if you died today, your spouse could outlive you by decades. Would they have to make drastic lifestyle changes to make ends meet? Your death could reduce the Social Security benefits they’d been counting on. It could also bring unplanned medical and funeral expenses.

Life insurance coverage can preserve the retirement plan you worked so hard to put in place and ensure your estate will be passed on, intact, to your survivors. A policy’s death benefit can help foot the estate tax bill from Uncle Sam and provide a legacy for your children and grandchildren, even if you use up most of your assets during your lifetime. For all these reasons, if you’ve been thinking about dropping your life insurance coverage, you may want to reconsider.

What if you’re retired or nearing retirement and you don’t have life insurance? You may think that you’ll no longer qualify due to your age or health conditions you may have. That’s not necessarily the case. Final expense insurance is a form of life insurance that requires little or no underwriting, which means almost anyone can qualify. Policies are available in face amounts typically ranging from several thousand dollars up to a maximum of $50,000 or $75,000—much less than a standard life insurance policy.1 That’s because these policies are only intended to cover final expenses and not longer-range expenses like ongoing living costs or college and retirement funding.

Final expense insurance typically comes in two varieties. Immediate full benefit policies, which pay the full face value upon your death, are generally available to people with no serious health concerns. Graded benefit policies provide limited benefits during the first few years and are available to people with serious health concerns. These policies can provide the peace of mind of knowing that your survivors won’t struggle to pay for your funeral or be saddled with outstanding medical bills and other debts. To find out more about life insurance and what type of coverage you may need, be sure to contact your financial professional.

Information for this article was provided by Life Happens, a nonprofit organization dedicated to helping consumers make smart insurance decisions to safeguard their families’ financial futures: www.lifehappens.org.

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 professional.

 

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

 

Sources:

1The 2017 Insurance Barometer Study, Life Happens and LIMRA

 

Adult Financial Education Services (AFES)
December 2017

The post Give yourself the gift of peace of mind with Life Insurance appeared first on Adult Financial Education Services.

Source: Adult Financial Education

Give yourself the gift of peace of mind with Life Insurance

2
Nov

How Much Money Will I Need in Retirement?

How Much Money Will I Need in Retirement?

Planning and saving for retirement can seem daunting, but as with any long-term project, it may help to have a plan. Surprisingly, less than half of current workers have tried to estimate how much savings they will need to live comfortably in retirement.1 And even more alarming is the fact that one-third of Americans report that they have no retirement savings at all.2

Though everyone’s situation is different and there’s no one-size-fits-all plan, one common guideline is that you may need to replace 70% to 80% of your pre-retirement income. This typically assumes that you will have paid off your mortgage, will be in a lower tax bracket when you retire, and will not have work-related expenses, such as for commuting and business clothing.

If your retirement is 20 or 30 years away, it might be difficult to project your retirement income needs and living expenses, but it may help to start with some rough numbers. If your retirement is closer, projecting income and expenses should be easier. Here are some things to consider:

Social Security benefits. You can estimate your future Social Security benefits using the Retirement Estimator at ssa.gov. This tool assumes current benefit levels, so keep in mind that these are just estimates. The Social Security Administration (SSA) can’t provide your actual benefit amount until you apply for benefits. And that amount may differ from the estimates provided because:

  • Your earnings may increase or decrease in the future.
  • After you start receiving benefits, they will be adjusted for cost-of-living increases.
  • Your estimated benefits are based on current law. The law governing benefit amounts may change because, by 2034, the payroll taxes collected will be enough to pay only about 79 cents for each dollar of scheduled benefits.3

Income streams and investment returns. What income streams will you have in retirement, if any? Do you have an annuity or another financial product that you can receive income from? For your investments, higher returns might enable your nest egg to grow faster, but it may be more prudent to use a modest rate of return in your calculations. If you experience higher returns, you might consider it a bonus. Remember that all investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.

Your retirement lifestyle. Perhaps you want to travel more, move to a different area of the country, or engage in new activities. Would these lifestyle choices require more retirement savings? If you’re anticipating that dream vacation to Italy, be sure to plan for it accordingly.

Expect a long retirement. Nowadays people are living longer, so your retirement may last 25 or more years. According to recent mortality tables, a healthy 45-year-old man would have a 45% chance of living to age 90 and a 27% chance of living to age 95. The odds of living to 90 or 95 are 56% and 37%, respectively, for a healthy 45-year-old woman.4 (Both scenarios based on a nonsmoker in excellent health.)

Plan for increased medical expenses. Modern medical care has contributed to longer life expectancies, but costs continue to rise. The average healthy 65-year-old couple today is expected to spend $377,000 or more on healthcare costs in retirement.5 Future retirees might face even higher medical expenses. Plus, that $377,000 figure doesn’t take long-term care costs (such as home-health care, assisted living or nursing homes) into account, which could run you at least $40,000 per year or more depending on the type of care needed.6

Be sure to contact your financial professional to help you estimate your retirement needs and a more thorough cash-flow analysis. A professional who focuses on your overall objectives can help you consider strategies that could have a substantial effect on your long-term financial situation.

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 professional.

 

Sources:

1The 2017 Retirement Confidence Survey, Employee Benefit Research Institute (EBRI)

2GOBankingRates.com Survey 2016

32017 Understanding the Benefits, Social Security Administration

42017 Simplified Issue Composite Mortality Tables Report, American Academy of Actuaries and Society of Actuaries

52017 Retirement Health Care Costs Data Report©, HealthView Services

6Genworth 2017 Cost of Care, Genworth Financial, Inc.

 

Adult Financial Education Services (AFES)
November 2017

The post How Much Money Will I Need in Retirement? appeared first on Adult Financial Education Services.

Source: Adult Financial Education

How Much Money Will I Need in Retirement?

3
Oct

3 Retirement Pitfalls to Avoid

3 Retirement Pitfalls to Avoid

As you near retirement, you’re probably looking forward to the laid-back lifestyle it can offer. But there can also be some snags that could cause you to run into financial trouble later in life. Here are three retirement pitfalls you should try to avoid.

1. Underestimating your spending in retirement

Many older Americans bank on their expenses going down in retirement, and while some seniors are perfectly comfortable living on 70% of their previous income, almost half of retirees wind up spending more money once they stop working, not less. The Employee Benefit Research Institute (EBRI) reports that 46% of retired households increase their spending during the first two years of retirement, and for 33%, this pattern continues for six years.1 And it’s not just wealthy retirees who take the opportunity to indulge. The EBRI found this data to be consistent across all income levels.

Even if you don’t indulge in retirement, there are medical costs to consider. The average healthy 65-year-old couple today is expected to spend $377,000 or more on healthcare costs in retirement.2 If your health isn’t great or you have a known medical condition, you could spend even more. Plus, that $377,000 figure doesn’t take long-term care costs (such as for nursing homes) into account either.

While you may end up spending a bit less money per year in retirement, don’t count on huge savings. Your budget should reflect the fact that your expenses are likely to stay the same or drop only slightly.

2. Depending upon Social Security alone

Social Security serves as a critical source of income for many seniors; however, it was never meant to sustain retirees on its own. According to the Social Security Administration, on average, a typical recipient’s benefits will replace only 40% of his or her pre-retirement income.3

The average Social Security beneficiary collects roughly $1,360 a month, or $16,320 a year, so a dual-income household could collect $32,640 a year.3 Even if we use the higher figure, it’s still not enough to cover most retirees’ basic living costs, especially given that over a 20-year period, $20,000 of that amount might go toward healthcare alone.

3. Forgetting about taxes

The one major expense that catches so many seniors off guard is taxes. Even though you’ve stopped working, you’re not immune to paying taxes. In fact, depending on your specific income streams, you might face a host of demands from the IRS.

For example, unless you have a Roth account, withdrawals from an IRA or 401(k) are always taxable in retirement. Not only that, but they’re treated as ordinary income, which means they do not qualify for any tax break whatsoever. The same holds true for whatever traditional investment income you collect in retirement, whether it’s capital gains, dividends, or bond interest payments.

Then there’s Social Security, which can also be taxable if you have income sources outside of those monthly payments. Though not all seniors pay taxes on Social Security, if your provisional income is high enough, you could be taxed on up to 85% of your benefits. There also are 13 states that tax Social Security income to varying degrees, and if yours is on the list, you might lose a portion of your benefits to state taxes.3

Be sure to plan for all three of these potential pitfalls when establishing your retirement budget. Talk to your financial professional, and together, you can take the necessary steps to plan accordingly and avoid compromising your financial security.

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 professional.

 

Sources:

1The 2017 Retirement Confidence Survey, Employee Benefit Research Institute (EBRI)

2 2017 Retirement Health Care Costs Data Report©, HealthView Services

32017 Understanding the Benefits, Social Security Administration

The post 3 Retirement Pitfalls to Avoid appeared first on Adult Financial Education Services.

Source: Adult Financial Education

3 Retirement Pitfalls to Avoid

1
Sep

Do I Really Need Life Insurance?

Do I Really Need Life Insurance?

Do I Really Need Life Insurance?

Let’s face it. Most people put off buying life insurance for any number of reasons. Take a look at this list—do any of them sound like you?

  1. It’s too expensive. In the ever-burgeoning budget of having a family, things like day care and car payments and possibly even college tuition eat up a good chunk of the money each month, and a lot of people think that life insurance is just outside those “necessities” when money’s tight. But two things: life insurance is often not nearly as expensive as you might think, especially when you can get a good policy for less than the cost of a daily cup of coffee at the local café, and well, if money’s tight now, what if something happens to you?

People with no life insurance overestimate its cost by three times. And even those who have coverage, overestimate its cost by two times.1 While it is an expense that you have to budget for, imagine what the financial impact would be for your family if something were to happen to you and you had no life insurance coverage at all.

  1. That’s that stuff for babies and old people, right? People of a certain age remember Ed McMahon telling them their grandparents couldn’t be turned down for any reason and figure that’s the target demographic for life insurance. Or, you might have been offered a small permanent insurance policy for your newborn. The truth of the matter is that these are very specific insurance products—just as there are many insurance products for adults in their working and retirement years.
  2. I’m strong and healthy! You eat right, you stay active, and everyone admires how grounded and centered you are. You passed your last physical with flying colors! That’s GREAT! But you’re neither immortal nor indestructible. It’s not even that something could happen to you—though it could—so much as when you’re at your strongest and healthiest, there’s no better time to get a policy to protect your loved ones. If you fall seriously ill or suffer significant injury later, it will make it tougher to get that kind of policy, if any at all.
  3. I have life insurance through my job. Many people are offered life insurance as part of their employee benefit coverage –and often, it’s the first time they encounter life insurance and have no idea that a $50,000 policy, or one or two times their salary, isn’t as much as they think it is. It sounds like a lot of money (and it is!), until you realize that it has to cover some or all of the expenses for your loved ones in your absence. Plus, if you leave the job, it’s typically the type of insurance that doesn’t “move on” with you.
  4. I don’t have kids. Sure, kids are a big reason why some people get life insurance. But that’s not the only litmus test for needing protection. If there is anyone in your life who would suffer financially from your loss—your spouse or live-in partner, a sibling, even your parents—a life insurance policy goes a long way in making sure everyone’s still okay even if something happens to you.
  5. Life insurance—it’s on my list … eventually. There’s no deadline on life insurance, no mandate from the government on purchasing it. Your parents may have never talked to you about its importance, and it’s certainly not the most invigorating topic for conversation. But don’t let your “eventually” turn into your loved ones’ “if only.”
If any of this sounds daunting, just know that it doesn’t have to be. Be sure to talk things through with your insurance agent. Your financial professional will help you figure out how much you may need, and find a policy that fits into your budget. There’s a policy to fit every budget, and a life insurance agent can help you find coverage that’s right for you.

Information for this article was provided by Life Happens, a nonprofit organization dedicated to helping consumers make smart insurance decisions to safeguard their families’ financial futures: www.lifehappens.org.

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 professional.

 

Sources:

1The 2017 Insurance Barometer Study, Life Happens and LIMRA

Adult Financial Education Services (AFES)
September 2017

 

 

The post Do I Really Need Life Insurance? appeared first on Adult Financial Education Services.

Source: Adult Financial Education

Do I Really Need Life Insurance?

1
Aug

Countdown to Retirement – 4 Tips to Get You Ready

Countdown to Retirement – 4 Tips to Get You Ready

Getting ready for retirement can be pretty exciting. With such a huge lifestyle change, you should consider to start laying the groundwork now. Here are some tips to help you through that transition.

 

Create a realistic budget

Your early 60s is a great time to start crunching some hard numbers on your retirement budget. You’re probably just a few years from your actual retirement date at this age, which means you’re close enough to be able to accurately estimate your income and expenses, but far enough away to manage any corrections. When planning your retirement budget, remember that some expenses may decline in retirement, but your medical expenses will most likely go up as you age. Plus, be sure to include any long-term care expenses.

 

Set a firm retirement date

As you approach 60, you probably have an idea of when you’d like to retire, but now could be a good time to set that date in stone. One option to ease into retirement is to switch from a full-time to a part-time work schedule rather than quitting your job entirely. If your employer is open to this idea, it can give you a chance to test drive retired life instead of fully committing to retirement. Plus, having a little extra income during your first few years of retirement can be a big help. This is also a good time to determine when you should claim Social Security to maximize your benefits and factor that into your planned retirement date.

 

Determine your retirement lifestyle

Let’s say that your dream retirement has always been to move to Florida and live out your days on the golf course. You’ve probably done a fair amount of research online at this point and maybe have spoken with friends or family who are now living in the Sunshine State. But as the big day is fast approaching, it’s probably a good idea to confirm that this is still what you want your retirement to look like and to make some concrete plans to make them a reality.

In-depth research is a must no matter where you plan to live in retirement—whether it’s in another country or a nearby assisted-living community. Aside from obvious factors like the weather, you should also consider factors like state and local taxes, the local real estate market, proximity to friends and family, access to the kinds of activities you enjoy, and access to high-quality healthcare. Of course, the best way to determine whether a living situation is right for you is to try it out beforehand. If possible, take some of your saved vacation time and spend a couple of weeks living as you plan to in retirement. Remember, you’ll likely be spending the rest of your days in this place, so due diligence ahead of time is vital to your future happiness.

 

Review your portfolio

Soon you’ll be switching over from putting money into your retirement accounts to taking money out. If you haven’t already done so, you should rebalance your investments in preparation for retirement. For example, you may want to change the types of stocks you’ve selected. High-dividend stocks can be useful during retirement because of the regular income they generate. This is also a good time to take your account statements to a financial professional who has experience in retirement planning and ask for guidance.

Most pensions offer you the option of receiving your money either in a lump sum (meaning you get it all at once) or as an annuity (meaning you get a check every month as long as you live). There are pros and cons for both options, so your own personal circumstances will determine which one is the best for you—although for many retirees the guaranteed income of an annuity may be the better choice. Lump-sum payouts can be riskier because it’s up to you to use the money wisely. There’s the possibility that retirees can make poor investment decisions or spend the lump sum too quickly and run out of money too soon. On the other hand, if you’re an experienced and disciplined investor, you may be able to put that lump sum to work and end up with more income than you would get from an annuity. Be sure to consult with both your Human Resources contact and your financial professional at length before deciding which option to take.

No matter what your vision of retirement is, working with the right financial professional can help immensely. Be sure to contact your financial professional today to help you plan and take the necessary steps toward a stress-free retirement.

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 professional.

The post Countdown to Retirement – 4 Tips to Get You Ready appeared first on Adult Financial Education Services.

Source: Adult Financial Education

Countdown to Retirement – 4 Tips to Get You Ready

30
Jun

How much life insurance do I need?

How much life insurance do I need?

The most important part of buying life insurance is determining how much you need. Since everyone’s financial circumstances and goals are different, there is no rule of thumb to tell you how much to buy.
But do you really need $250,000, $500,000, $1 million or more? Sounds like a lot of money, but imagine if one of those amounts had to pay for a funeral, retire credit card balances and other debts, and support your loved ones for many years to come. Would it be enough? How would you know?

To start, estimate what your family members would need after you’re gone to meet immediate, ongoing, and future financial obligations (see below for examples of each). Then, add up the resources your surviving family members could draw on to support themselves. These would include things like a spouse’s income, accumulated savings, life insurance you may already own, etc. The difference between the two is your need for additional life insurance. This mathematical equation may seem simple enough, but coming up with all the inputs can get tricky. Plus, you’ll need to factor in the effects of inflation and assumptions about how much your investments will earn over the long run.

 

Insurance Proceeds Can Fund Many Types of Expenses

Immediate Expenses

  • Funeral costs
  • Uncovered medical expenses
  • Mortgage
  • Car loans
  • Credit card debt
  • Taxes
  • Estate settlement costs

Ongoing Expenses

  • Food
  • Housing
  • Utilities
  • Transportation
  • Health care
  • Clothing
  • Insurance

Future Expenses

  • College
  • Retirement

About 38% of Americans believe they would feel the financial impact from the death of the primary wage earner within a month of their passing.1 When you consider all the things that life insurance proceeds need to fund and how long the money will be needed, you begin to realize that your true need for coverage is often 10 or 15 times your gross annual income, sometimes more.

Fortunately, there are plenty of resources you can turn to for assistance. The first step is easy: Commit to finding out what kind of coverage is right for you. Just remember there are no substitutes for the advice you’ll get by meeting with a qualified insurance professional, who can conduct a thorough analysis of your needs, and then help you determine the right amount and type of life insurance to protect the ones you love. So be sure to talk to your financial professional today.

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 professional.

Sources:

1The 2017 Insurance Barometer Study, Life Happens and LIMRA

 

Adult Financial Education Services (AFES)
July 2017

The post How much life insurance do I need? appeared first on Adult Financial Education Services.

Source: Adult Financial Education

How much life insurance do I need?

2
Jun

4 Ways to Start Saving for Retirement Today

4 Ways to Start Saving for Retirement Today

Saving money is an important part of leading a successful and financially independent lifestyle. While saving can help fund big-ticket items such as cars, homes, or vacations, it also serves as part of a balanced preparation for a stress-free retirement.

It’s often difficult to begin saving money – especially when you’ve grown accustomed to spending a significant amount of your paycheck. To help get over the initial heartache that may come with handing over a percentage of your salary to a savings account, here are a few pain-free and creative strategies that can help you get into the habit.

  1. Make Saving a Priority
    With a little planning, you may be able to save for retirement and still take care of your other financial responsibilities. An important first step is to understand where your money is going. If you’re not sure, track your spending for a couple of months. This will help you create a budget that can help find money for retirement.

    One way to help you keep a tab on your spending is to use a budget-tracking app. With the advent of online banking, balancing a checkbook may have become a lost art. Luckily, there are several ways to stay accountable by utilizing the multitude of budgeting apps that have developed in the past few years. These apps allow you to track how much and where you are spending your hard-earned income. Many have extra features such as reminders to stick to your established budget and notifications for when you have bills to pay or when you’ve hit your savings goals.

  2. Start Saving
    When you start saving may be even more important to your success than what financial products you choose. Thanks to the power of compounding, time is your biggest friend when it comes to saving. Even small amounts, saved regularly, add up over time. It’s never too late to start but the sooner you start, the greater the potential benefit.

    You can even try to “trick” yourself into saving more. By rounding your payments up and paychecks down, you can begin to save incrementally with virtually no effort; this is especially useful if you use a budget-tracking app. For example, if you bought something for $27.50, you could round up and record that you spent $30 while transferring the rest to your savings. Similarly, if you are paid $207.00 each week, rounding down to $200.00 could eventually result in significant savings with minimal pain.

  3. Put Your Money to Work
    Know yourself and make decisions based on your goals, the number of years you can have your money in the financial products of your choosing, and how much risk you are comfortable taking. Then allocate your money across asset classes and stay diversified.

    Diversification can be summed in one phrase: “Don’t put all of your eggs in one basket.” It’s really that simple. Regardless of which type of financial products you choose to buy – whether they are stocks, bonds, or real estate – don’t bet your retirement on a single asset or asset class.

    The assets you choose to participate in can vary depending on several factors, primarily your risk tolerance and investment time horizon. The two factors work hand in hand. Generally, the more years you have left until retirement, the higher the level of risk you can handle. As you get closer to retirement, your risk tolerance usually decreases; therefore, it makes sense to perform frequent reassessments of your portfolio and make any necessary changes to your asset allocation.

  4. Stay on Track
    It’s easy to get sidetracked. Your options are limited if you come up short for retirement and Social Security will not be enough. Be willing to adjust and protect your retirement savings as your life changes.

    One trick for keeping on track is to use cash for spending on entertainment. If you have a habit of overspending while having a good time, try hiding your debit and credit cards and using cash for your weekend adventures. By making a decision beforehand to limit yourself to a core amount of money, you can better track your money and avoid spending too much without realizing it.

To start saving early for a comfortable retirement, we must start to think outside the box for strategic ways to bolster up those “for later funds.” Help your future self out by getting creative with planning vacations, within the home, and by making changes to your diet, use of technology and the way you shop. You’ll thank yourself later

Working with the right financial professional can also help immensely. A good agent can help you identify all your goals and determine the appropriate risk/return balance. Equally important, your agent is there to review, discuss and adjust your plan depending on life’s changes. Be sure to contact your financial professional today to help you start saving and help you plan for a stress-free retirement.

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 professional.

The post 4 Ways to Start Saving for Retirement Today appeared first on Adult Financial Education Services.

Source: Adult Financial Education

4 Ways to Start Saving for Retirement Today

4
May

Is it time to rethink your retirement?

Is it time to rethink your retirement?

Every day thousands of Baby Boomers enter their retirement years. They are, unfortunately, members of a generation who are largely unsure of their financial future. For the past seven years, Insured Retirement Institute (IRI) research has discovered that Baby Boomers’ confidence in their financial preparations for retirement is steadily dropping.

 

Key findings from the IRI report1 include:

 

  • Only 54 percent of Boomers have retirement savings, the lowest recorded in the seven years of the Boomer report.
  • Almost one-third of Boomers think they will need an annual income between $45,000 and $75,000 during retirement, in today’s dollars.
  • Six in 10 Boomers expect Social Security to be a major source of income, the highest recorded in the seven years of the Boomer report.
  • Only four in 10 Boomers have tried to calculate how much they need to save to retire, and of these only six in 10 included estimates of health care costs in their calculations.
  • Only 23 percent of Boomers believe they will have enough money to last throughout retirement, and that they have done a good job preparing for retirement.
  • Six in 10 Boomers believe their retirement income will be sufficient to cover basic expenses, and afford them at least some budget for travel and leisure.
  • More than eight in 10 Baby Boomers underestimate the percentage of their income which may be needed for health care costs.
  • Eighty-five percent say it is somewhat important or very important to have a source of guaranteed lifetime income other than Social Security, but only eight percent say they would purchase an annuity providing guaranteed lifetime income.

 

According to the 2017 IRI annual report1, the number of Americans over the age of 65 has risen over 18 percent since IRI’s inaugural Baby Boomer report in 2011. As they move into their pre-retirement and retirement years, most Boomers report insufficient retirement savings, and have not taken appropriate steps to plan effectively for their golden years. Only 54 percent of Boomers have any retirement savings, and only four in 10 have tried to calculate how much they need to save to retire.

 

Not surprisingly, in the 2017 update IRI reported1 that only 23 percent of Boomers believe that their savings will last throughout retirement, or that they have done a good job preparing for retirement. However, 6 in 10 Boomers believe their retirement income will cover their basic expenses, with at least some leftover for travel and leisure activities. This disconnect between savings, confidence and expectations could result in many Boomers exhausting their financial resources during retirement.

 

If you’re nearing retirement, daily life and the pressures of speculating on the future can make planning for retirement appear daunting. However, opportunities exist that can help to calm these apprehensions. Simple things, such as being proactive and routinely assessing your financial preparedness for retirement, are important first steps towards achieving financial independence. Additionally, the guidance of financial professionals can also help you to achieve your goals.

 

In fact, the 2017 IRI annual report1 states that those among the Boomer population who work with financial professionals have a much brighter outlook. Eighty-five percent of Baby Boomers who work with financial advisors believe they are better prepared for retirement because of that relationship, and more than 90 percent of Baby Boomers who work with financial professionals have retirement savings. Further, 75 percent of those individuals have saved $100,000 or more, compared to less than one-half of those without financial advisors having savings at that level.

 

The 2017 IRI Boomer study1 also reveals that 85 percent of Baby Boomers believe it is important to have a source of guaranteed lifetime income in addition to Social Security, but only eight percent would consider purchasing an annuity. Given that annuities are a financial product that can provide guaranteed lifetime income, this is a clear knowledge gap that financial professionals can help bridge, increasing retirement security for millions of Americans.

 

Many Baby Boomers are not taking full advantage of the resources available to potentially help them achieve a secure and dignified retirement. Rethinking your retirement by developing a holistic financial plan can help restore your confidence and build savings for those post-working years. Be sure to work with your financial professional on a retirement plan which focuses on holistic strategies, and considers retirement risks such as longevity, health care, long-term care, and lifestyle expectations, to help ensure that your financial resources will provide income and security for your lifetime.

 

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:

1Boomer Expectations for Retirement 2017, Insured Retirement Institute

 

 

Adult Financial Education Services (AFES)
May 2017

The post Is it time to rethink your retirement? appeared first on Adult Financial Education Services.

Source: Adult Financial Education

Is it time to rethink your retirement?

3
Apr

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

3
Apr

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

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

Source: Adult Financial Education

Guaranteed Income in Your Retirement