Market Drops…again. Are you prepared for the vast uncertainty of our economy?
We are entering a stage of vast uncertainty in the economy…stock market uncertainty to be exact. The stock market dropped, dropped again, and again in the past 4 days.
Those nearing retirement may need to consider moving a large portion of their savings to fixed/guaranteed options offered by Life Insurance companies, such as an Indexed Universal Life plan. It’s also a great option for those looking to start saving today.
Fixed IUL’s and Annuities tend to offer guaranteed returns with no potential risk from Market Loss. An Indexed plan offers the leverage of higher interest rates during Market Rises, yet protection from Market lows like we’ve been seeing this week…or a major crash such as in 2001/2 and 2008.
IUL’s offer Life Insurance Tax Advantages which are not found in a 401k.
Maybe it’s time to review your asset allocation, to ensure a No Market Risk option and use of the Tax Advantages Life Insurance has to offer.
The next “big thing” has been going on for years, you just didn’t know it existed, so you haven’t been able to utilize the benefits it offers. Now that you know, take time to explore the Indexed Universal Life Insurance option, to see if it’s right for your current situation.Life is unpredictable, be prepared with a No Market Risk, Tax Advantaged, Indexed Universal Life option to grow your future wealth; today. firstname.lastname@example.org
Questioning what you should do for retirement, regarding when to take your Social Security…or wondering what options are best for your specific retirement needs?
Based on calculations from Social Security Administration, a 62 year old single person earning $50,000 per year would receive an estimated $14,000/yr if he or she retired today. By waiting until after age 65, those earnings increase by 35 percent to $19,000. At age 70 social Security Benefits would be $25,000/yr, a 79% increase.
It makes one think they should plan to set themselves up to have additional income to support them till they are 70 and then take the most they can get from Social Security Benefits. However…
Let’s take into consideration the following:
*The average person is stated to live till around 81. If you retire at age 70 you only have around 11 more years to use that “extra money” you will receive by waiting to take your Social Security Benefits.
* Many people believe they will retire at age 67 to 70 to take advantage of the above increases, however; a recent risk survey showed that pre-retirees whom thought they would retire around age 65 or later ended up leaving their occupations early at age 58. The reality is that many were “pushed” into retirement early by job loss, unpleasant work environment, family needs or their own declining health. Best intentions don’t always pan out
* People are living longer, so their savings need to last longer. They need to start saving additional funds when younger, in addition to their estimated Social Security Funds, to be able to live at the same standard of living during retirement
* Social Security is underfunded and remains a target for further trimming. You might not be able to count on what SS estimates your monthly payout to be. And add to that the rising cost of health insurance that is take out before you receive your monthly Social Security funds
So, what options are there for those whom waited to save and then never saved…or didn’t save enough? Whom didn’t purchase Long Term Care – but wish they would have since they’ve out lived their family members?
Did you know that there is a Life Insurance plan you can purchase for the Death Benefit, but instead use the Death Benefit for Long Term Care if necessary…if not, you can leave a legacy to your loved ones…or use the funds for yourself in your later years.
How about a Lump Sump plan that almost triples your death benefit but can be used for Long Term Care.
What you don’t know, can hurt you or leave you in a financial or medical bind. Know your options.
If you could see now, what you will experience financially when you retire…would you do it differently? Would you change the way you save, to provide for a better now, and a better future?
I’ve talked to many older folks working at fast food restaurants and chain stores whom wish they had made a change in their younger years to set them up for the cost of life and health insurance in future years. I ask why they are working at age 70 plus and receive the same answers every time. I didn’t save enough for the unexpected in retirement, I didn’t plan accordingly for health insurance costs, I’m still paying on my mortgage, I lost my money in the 2008 stock market crash right before retiring, and my spouse perished with out life insurance in place.
At 25, 35 or 45 your future is still in your hands. At 65 your future is upon you and your options are limited if you didn’t save during your earlier years. This is a growing issue in the US today and will continue to be if people don’t start saving now.
If you think about it, Uncle Sam is the biggest partner in most retirement plans. He has his hands in almost all retirement options. What if you could provide security from taxes, safety for your family, the ability to grow funds like traditional retirement vehicles, yet avoid all the risk of loss.
Would that seem like a great retirement vehicle to place your funds into? Let’s add to that the ability to access funds before retirement, and yet continue to grow your funds as if you had never touched the money. What about adding Long Term Care (LTC) into the mix? LTC included in this special cash accumulation option which Uncle Sam can not take a portion of? Does that make it even more enticing? It also allows for market like returns with no market risk.
What is this special cash accumulation vehicle which has been around for over 10 years, but has recently become one of the fastest growing products in the market for cash accumulation; due to all the above included benefits? Life Insurance! Are you surprised you haven’t heard more about this option? It’s a special type of Life Insurance called Indexed Universal Life or IUL. Indexed means that it follows the stock market interest rates allowing you great return on your money compared to a lot of retirement options; with out the loss. You see, the money is not invested in the market, it just follows the market, so if the market crashes you do not loose a penny of your hard earned money.
Life Insurance is approved by congress and IRS – no gimmicks here. It’s important to know your options for knowledge is power. This is a strong plan for you to consider for your future retirement needs…and closer “down the road needs”. Being able to access money prior to retirement, with no taxes taken out, and during retirement when you need it most. It truly is an amazing single solution option for ALL life’s needs AND wants. One product, many solutions. Indexed Universal Life Insurance!
In ones 20′s, 30′s, 40′s and 50′s there is a lot of responsibility…house mortgage, raising a family financially, saving for college funds, and retirement to name a few. A wise person is also looking towards Social Security and trying to figure out how to use it to your advantage. What if something unthinkable occurred such as an untimely death, disability or Long Term Care situation. Are you set up to handle what life throws your way? How about retirement and social security? Take our Retirement & Social Security Quiz here.
In my 54 years of life I have seen a lot of financial struggles due to unprepared life savings and life insurance in place. I witnessed a friends 40 year old husband drop dead on the basketball court with no plan in place to provide for his wife and 4 little girls. In the end she lost their house and had to go back to work disrupting the girls lives and her own. I heard her mention wishing they had purchased Life Insurance when asked, and had stored up emergency funds for those financial needs that arose the first week or so of his death. It was an awakening for me to purchase life insurance to protect my family.
And unfortunately, this was just one of many situations where my family and friends could have used protections with the single solution option the Indexed Universal Life Insurance (IUL) provides. I myself fell victim to the 2001/2 stock market crash and watched my 401k crash and loose 40%. We were not fortunate to recover the 40% because we did not have time on our side to watch it “regrow” over the years, due to our divorce and splitting of the remaining 401k funds.
At that point in time Indexed Universal Life was not an option. Had it been I would have set aside funds into an IUL so that my remaining family was protected now, and into our future due for unexpected circumstances of life and retirement needs…which is now just around the corner for me.
Procrastination is not an option when it comes to your family’s financial security and retirement needs. It’s time to take action now, to provide for the future and unexpected life situations and needs. It’s no fun back peddling in bad situations and wishing you had taken the appropriate steps. An IUL is a single option solution for many of life’s needs including Premature Death, Retirement, Long Term Care, and Emergency Funds just to name a few. Living Benefits such as these are the way of the future when it comes to investing in your future. Place your money where it will grow with out risk of loss and where Uncle Sam can’t get his money on it and you will be setting yourself up for a financially secure future.
Click here to receive a free book. Please mention book in the subject line and include your Name, Address and phone number
The book is about identical triplets whom did everything alike, except save for retirement. It compares traditional retirement options and strategies to the Indexed Universal Life – IUL choice, with living benefits included. Life insurance is a very viable option for your financial success and future needs and wants.
Life Insurance for use now, while living, and when you perish it provides a death benefit, plus cash value to your beneficiary.
Are you looking for Life Insurance? How about Long Term Care, Critical Illness, or Terminal illness protection. Do you wish there was somewhere to grow your money that was safe from market crashes yet offered market like returns? Are your funds diversified for retirement? Take my Retirement and Social Securit…y Quiz: www.theiuladvantage.com
Then an Indexed Universal Life Insurance (IUL) plan is just what you are looking for. It allows you to grow funds for financial security now, for future use, and provide a death benefit when you perish. It also allows you to use your death benefit in advance of dying; for Long Term Care, Critical Illness and Terminal illness.
Please call for more detailed information on how you can protect your family financially now and in the event of a loved one’s death.
I usually talk about Indexed Universal Life and the benefits of using this type of Life Insurance for Living Benefits such at Long Term Care, Critical Illness and Terminal Illness. It also “doubles” as a “savings” plan to use down the road. However, today, let’s just take a brief moment to discuss the ACA…Affordable Care Act regarding the rising rates of Health Insurance for 2016 in Oregon, to be specific. Isn’t it called the Affordable Care Act? Where is the affordable in requested rate increases up to 42-52% for some companies?
If it’s named Affordable Care Act, then why are insurance rates doubling year after year? I’m not sure whom came up with this term, but they were dead wrong. Yes, some folks are receiving reduced premiums and others are receiving that plus lower deductibles, co-insurance, co-payments and Max OOP due to their income level…but for those whom do not receive a tax credit, the ACA has done nothing but jack up the cost of health insurance for the middle class.
Before ACA went into effect my clients whom had a family were paying around $550 to $750 per month. In 2015 those same families are being asked to pay 1100 – 1400/month if they do not qualify for a tax credit. That was NOT definitely not in their budget. Now for 2016 the requested rates increases are as high as 42-52%. That’s outrageous! How can any family afford to pay that much more? Health Insurance Rate Increases are outrageous due to ACA. They have not been this high in the past 10 years I’ve provided HI to my clients.
I understand the ACA did bring some good changes, such as allowing un-insurable individuals to be insured and free preventative for some items; as long as nothing is found wrong. And for some, lower monthly premiums and such due to lower incomes. But who’s going to be able to stay on their insurance plan, at the rate which premiums seem to be increasing each year when they don’t receive a subsidy or tax credit?
In order to get the insurance companies rates down, I believe we need to have :
Transparency in costs for Hospital stays, Surgeries, Doctor’s rates, etc.
Higher Penalties for not choosing to purchase a health insurance planTransparency: As consumers, when we feel the cost of an item is too high, we choose to shop around. Hospital’s and doctors know their rates but do not make that public knowledge and it’s hard to get the to disclose what it is Before you need the work done. Transparency will drive down prices due to competition. Example: I had to have the dreaded colonoscopy performed last year. I called around and rates varied from 1,300 to 3,500. All in all – all 3 offices were good options so I choose the plan for 1,300. Now, we all know that with ACA (or you should) that Preventative is covered in full, if nothing is found wrong. But, if something was found wrong during my colonoscopy then I would have been responsible to pay my deductibe (2,500) then co-insurance. You can bet that 1,300 looked better to me than the 3,500 did. Also, many hospitals over charge and double bill for services rendered; however we would never know that because we don’t know what the “true” cost if from the billed cost. We just hope that they sent us a correct bill. You wouldn’t get away with that when shopping at any other store. “Yeah, that dress you bought the other day is 2,500…now that you’ve bought it, you’re stuck with it”…transparency would allow people to make sure they are not over paying for services
Higher Penalties: If the penalty which one had to pay for not purchasing health insurance was higher than more people would purchase health insurance to avoid the fee of the penalty. More young people whom decided not to sign up because they are young and invincible – or feel they don’t have the money, would sign up. The more paid into the system the lower the premiums would be, because money would be coming into the insurance companies to help pay for all the new claims created by the un-insured which are now, for sure, using the system to it’s fullest.
With the penalty at 2% or 2.5% of a persons income, that is not enough to make someone think about purchasing insurance to avoid the fee. Example: A 32 year old person making 30,000/yr with a 2% penalty would pay $600 for the WHOLE year as their penalty. However, if they purchase insurance it could cost them around $254/month for a 1,100 deductible plan with 6,600 Max paid if they broke a leg. In some peoples eyes $600 is a lot of money, but 254 x 12 months is even more at $3048/year. And, with young people avoiding signing up due to feeling invincible, it makes the rest, whom do purchase insurance, responsible to pay their part too!
I’m sure everyone has a theory…”Insurance companies are ripping us off”…but if you look into it thoroughly Insurance companies in Oregon, for the most part, were well with in the required % of administration verses paying claims; over the past few years before ACA came into effect…and the rate increases were no where near 42-52%.
Add to all this the fact that the Federal subsidies may be “taken away”, depending on the outcome shortly of the King vs Burwell case.
Read about it here: what would probably happen if the Federal Exchange shuts down due to the Government loosing the ruling in the King vs Burwell; which should be announced any day now…
Door Number 1: Liquidity…Tax Free with drawls and Income Tax Free Legacy for heirs
Door Number 2: Great Growth Potential with index crediting…Highs of the Market with no market risk
Door Number 3: Inflation Combator…Your best chance at beating inflation with no risk
ACTUALLY, ALL 3 DOORS LEAD TO THE SAME PLACE:
Indexed Universal Life Plans (IUL’s) are IRS APPROVED and offer you All Three Doors in one product, allowing your money to work effectively for you!
For Individuals with sufficient net worth, moving money from low-yielding assets into life insurance can be a very smart choice and great planning tool for your funds future growth.
CD’s offer safety…however sometimes they dip below 1%. Lower interest rates, with modest inflation of 2-3 percent mean CD’s often are loosing buying power and you’ll find bank Savings accounts following this same mold.
IUL’s offer safety…a new way to reposition your assets which offer the opportunity for higher interest crediting than many fixed alternatives. Higher potential growth than options with fixed interest rates and yet now risk because your principle is protected from negative market fluctuations.
It’s an unpredictable world, and it always will be with cost of living, market performance and all the other variables which play into finances, hopes, dreams and goals. However, an IUL Cash Value Life Insurance is a superior product because it offers safety and growth, at the same time…with no risk.
Imagine putting money away, watching it grow competitively, and knowing you won’t loose a penny when the next market crash occurs. Let’s add to that the ability to take your money out income tax free, when needed.
IUL’s help manage today’s challenging financial environment because they provide Long Term Care, Critical Illness and Terminal Illness cash access by accelerating the death benefit. Benefits are paid out income tax free in most cases once the individual is deemed to be chronically ill under the terms of the contract. Some companies even offer these features at no cost unless used.
Death benefits and other cash funds are paid out when one perishes prematurely allowing an income tax free payout to your heirs. Of course, any unpaid loans taken from the policy will lesson the remaining death benefit amount.
It’s time to remove uncertainty from your financial future…particularly when it comes to available cash funds. IUL’s are relevant in a world of uncertainty and market volatility.
Interest Crediting of Cash Value with upside potential
Tax Free Access to deposited funds
Death Benefit payout Income Tax Free
LTC & Illness protection
No Market Risk
It’s a No Brainer. Predictable income stream is critical to your ability to have the retirement you envision. It’s time to re-evaluate your low interest yielding assets to better accomplish your financial goals.
Withstand buying power erosion – Set up an IUL today!
Every day is a new day and making sure you are on the right path takes time and determination. Sometimes you just don’t have the knowledge to make an informed decision.
I created a website where you can go to learn more about IUL’s – Indexed Universal Life Products and how they can help you overcome Taxes, Change and the Economy with Guarantees, Flexibility and Control.
Life Insurance is being used to create Wealth…Cash Accumulation at the least, by those whom are taking advantage of this amazing Vehicle. Many have not heard about it…others do no know exactly how it works and yet they are very curious if it can work for their current situation. IUL’s work for Business or Family Protection, Employee Retention, Estate Planning Needs, Gap needs and more. A Cash Value Life Insurance plan offers competitive advantages to alternative financial assets. These plans are for now and in the future. It’s a new way of thinking that puts you in control of your finances and allows them to grow safely. No Financial Adviser needed or Government involvement…just you, and your money at work for you!
This video shares a look at life and life insurance and how it can help you beat inflation and grow cash safely with no market risk. VIDEO I’m not promoting their products as each IUL is unique and we need to find the one that is right for your current situation. Some offer a Long Term Care option, while others focus more on cash accumulation and yet others on Critical Illness, etc. An IUL really should be created and set up based on your specific situation.
I’ve also put together a website which helps you think outside the box so you too can beat taxes and inflation using an IUL product which can meet your needs now and in the future: www.TheIULadvantage.com
IMPORTANT: The best way to Grow your Future is to Pay Yourself First!
I’ve always said that Knowledge is Power and thinking outside the box allows you to be one step ahead of everyone else. With Increasing Taxes, a Volatile Economy and Inflation people need a way to be able to accumulate cash with out risking it all when a bad year strikes. After loosing 50% from my cash accumulation in 2008 I wanted a safer way to save…and yet still have a good rate of return. I didn’t want to share all my money with Uncle Sam and I wanted to spend some of it along the way. I also wanted to know that when I retired the government was not going to see my “distributions” as income and have it affect my social security distribution.
An IUL meets those needs and allows one to stay in control of their Cash Accumulation at the same time. With no Market Risk it allows one Peace of Mind and also allows one the opportunity to have control over the “can’t with draw” MY funds till 59 1/2 and “must start withdrawing” funds at age 70 (and being taxed…).
Growth, Protection & Liquidity offer customized security. I’d enjoy hearing more about how you would like to Grow your Funds and Accumulate Cash for future use. Let’s take a closer look at how an IUL could perform in your current situation and how you can use them to help grow a future, pay off debt, enjoy peace of mind and more. Let’s create an IUL – Indexed Universal Life profile for you and your family.
Remember…The best way to Grow your Future is to Pay Yourself First!
Social Security Made Easy…Your Social Security Questions Answered www.ssa.gov
What is Social Security? It is a United States federal program of social insurance and benefits developed in 1935
About 158 million Americans pay Social Security taxes
57 million collect monthly benefits in 2013
About one house hold in four receives income from Social Security
You need 40 credits (10 years of work) 1 credit a quarter
Quarters do not need to be consecutive
In 2014, you receive one credit for each $1,200 of earnings, up to the maximum of four credits per year
Benefits are calculated based on average of the 35 highest years of earnings
$0 used in all years less than 35, which will result in a lower benefit
SS is paid for by your paycheck contributions and is inflation-adjusted income. It is a replacement for SOME of your income during retirement…but usually will not cover all your expenses. Make sure to plan ahead for those other expenses such as…
Estimated Costs During Retirement: (20 year estimate)
Necessary Living Expenses:
Medical: $220,000 (for Part B, Med Sup, Drugs, Deductible, Co-pays, etc.) Plus $104/month up to $640/month deducted from your Social Security Benefits (before you get them) for Part A.
Food: $219,000 ($10 meal x 3 times a day, x 365 days x 20 years)
Housing: $20,000 to $40,000 (Many still have 10 or 20 years of House Payments remaining)
Total for Necessary Expenses $459,000 – 479,000…or more
That’s about $1912/month – 1995/month…or more
And What About:
Desired Fun Living Expenses:
Vacations/Travel, Airfare/Hotels: ??
Kids College Funds: ??
New Car: ??
Golf Membership: ??
Retirement Home/LTC: ??
Now Consider: What if the Market Drops and you loose 50% of your hard earned money; as in 2008/09. Do you have Emergency Funds set aside that will not be affected by a market crash? If not, you need to start saving now for down the road potential expenses.
Let’s get Personal: I remember reviewing my SS Benefits in the past and it was estimated at 2,268/mo. I would receive that less the cost of Part A Medical. At $104/month for Medical Part A, on the low end (it can be as much as $640 depending on your past income) that would leave me $2,164/mo. Taking out Food at $900/month leaves me $1264. I still owe 20 years on my house at $1300/mo. Plus other expenses such as clothes doesn’t leave me room for any fun and desired living expenses. I would have to go back to work to be able to pay for Part B and Med Sup expenses…If I didn’t have an alternative source of income to use, I would be living on the streets as I could not make my house payment from my Social Security Benefits..
NOW is the time to review your Estimate SS Benefits so you can start planning for a more secure retirement bySaving Now.
Find Your Full Retirement Age…for many it’s 67 years old\
Year of Birth Full Retirement Age
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67
If you were born on January 1st of any year you should refer to the previous year. (If you were born on the 1st of the month, SSA will figure your benefit (and your full retirement age) as if your birthday was in the previous month.)
We are living longer as a result of medical advances and living healthier. Can you afford to live to 100? One out of every four 65 year olds will live past age 90 and one out of every 10 will live past age 95. In fact U.S. Census Bureau in Feb 2012 stated that they project 600,000 people to live to be 100 years old by 2015.
There are two factors you need to consider when deciding if you should take your Social Security Benefits before your Full Retirement Age (FRA) or not. If you take your benefits before FRA they will be reduced benefits for the remainder of your life. Example: If your FRA benefit would be $1000/month and you start taking your benefits at 62 you would only receive $750/mo. for life. If you decide not to take your benefits early (62 yrs) and instead decide to continue working, if you earn over $15,120/year (2015) you will be giving up $1 in benefits for every $2 you earn working. Then let’s say you reach FRA and are still working…if you earn over $40,080/yr you will give up $1 in benefits for every $3 you earn.
Remember to keep that in mind when deciding when to take your Social Security Benefits. The longer you wait, the more you will receive. Of course there is the argument that SS Benefits will run out…but from what I’ve read that should not happen. Below is a chart showing your reduction in SS Benefits if you decide to take your benefits before FRA.
Age Full Retirement 66 Age Full Retirement 67
62 25% Reduction 62 30% Reduction
63 20% Reduction 63 25% Reduction
64 13.3% Reduction 64 20% Reduction
65 6.7% Reduction 65 13.3% Reduction
66 Full Benefits 66 6.7% Reduction
67 Full Benefits
For those whom wait to take there Social Security Benefits until their Full Retirement Age (FRA) they will receive up to 8% increase in the monthly income paid to them. Example if your FRA is age 67 and you take your benefits at year 68 instead of 67 you will receive 108% of your FRA Benefits. If you wait till age 70 you will receive 124% of your FRA Benefits. So the longer you wait to take your benefits the more you will be paid for the remainder of your life.
If you started taking your SS Benefits at age 62 you might receive $750, if you wait until age 66 you might receive $1000 and if you wait till Age 70 you might receive $1,320. So when it comes to SS Benefits, waiting pays off.
Monthly Benefit Amounts Differ Based on the Age You Decide to Start Receiving Benefits.
This example assumes a benefit of $1,000 at a Full Retirement Age (FRA) of 66.
Estimate benefit amounts and decide when to start receiving retirement benefits
This leads one to think about setting up an alternative Cash Accumulation plan to live off, if they want to retire early, and then wait until later to access their Social Security Benefits when they can receive a larger payout. Using an Indexed Universal Life – IUL as a Cash Accumulation tool might be a great option to add to your portfolio of 401k, Roth IRA, or Annuity.
Spouse is entitled to greater of the benefit based upon his or her own benefits or 50% of the spouse’s benefit.
Example #1: Karin and Dave both have reached FRA. Dave’s benefit is $1200 and Karin’s benefit is $1200. Both would receive their own benefit amount.
Example #2: Keven and Luz both have reached FRA. Keven’s benefit is $800 and Luz’s is $1800. Since half of Luz’s benefits equals $900 that is greater than Keven’s benefit of $800. In this example Keven would be entitled to $900 instead of his own benefit of $800.
One approach to Spousal Benefits: In example #2: Luz’s FRA Benefit is $1800 and she can take her benefit of $1800 or she could increase her benefit amount by waiting (Deferring) till age 70 to collect her SS benefits. By deferring till age 70 her benefit amount would increase to $2448. Keven’s benefit was $800 and he can take his benefit or he can take 1/2 of Luz’s benefit which is $900.
Widows and widowers must be 60 yrs or over to take benefits based on their own earnings history. These will be reduced benefits if taken at 60 yrs. They can be taken at 50 years, if disabled. However they can switch to survivors benefits or back to their own. They have not remarried prior to age 60; the deceased must have been fully insured (40 quarters of coverage) and the spouse must have been married to them for at least 9 months before the deceased passed away. Maximum benefit is 100% of deceased workers benefit. If the surviving spouse has not reached full retirement age and takes the benefits but continues working the benefits will be reduced by $1 for every $2 they earn over that years limit. If the deceased started benefits prior to full time retirement age then perished, the maximum benefit is limited to what the deceased was receiving when they were alive.
Even if the surviving spouse files before full retirement age, Survivor benefits can be taken.
This allows the survivor to take a benefit at age 60 based on the deceased’s earning history and allow their own benefit to grow until age 70.
Survivor benefits are equal to full retirement benefit the deceased would have received.
Typical Situation for Widow/Widower
A Widow or Widower, at full retirement age or older, generally receives 100 percent of deceased worker’s basic benefit amount. If age 60 or older, but under full retirement age, they will receive about 71-99% of the deceased worker’s basic benefit amount.
The Widow or Widower must be unmarried when they file for benefits (or the new marriage must be one that SS can disregard). They can continue to receive benefits if they re-marry after age 60 (or age 50 if disabled).
If you are divorced: See If You Are Divorced for more information http://www.socialsecurity.gov/retire2/divspouse.htm
If you are divorced and your marriage lasted at least 10 years, you may be able to get benefits on your former spouse’s record.
File and Suspend Option:
At full retirement age the primary wage earner can file for his or her own benefits and then immediately suspend the benefit. This filing allows the other spouse (with a lower benefit or no benefit on their own work record) to collect a spousal benefit. It also allows the primary wage earner to continue to work and collect delayed retirement credits at an additional 8% per year until benefit is unsuspended; at age 70 or earlier.
Example: Leann and Alan just turned 67 (FRA) and Alan wants to retire but Leann wants to continue working till age 70 to receive maximum SS Benefits. Let’s say Leann’s monthly benefit would be 2,200 and Alan’s would be $900. If Alan can claim spousal benefits his monthly benefit would be 1,100 (1/2 of his spouses benefit) which is more than his $900. By suspending her benefits she can continue to grow them until age 70 and her husband can claim spousal benefits of $1,100 allowing HIS benefits to continue growing till age 70. At age 70 HIS benefits will have increased to $1188 per year allowing him a higher benefit to retire on. For many couples where one spouse earns much less than the other this might be a great option…if the spouse decides to file and suspend their benefits till a later age.
Social Security offers many Calculators you can use such as: Earnings Test, Retirement Age, Estimated Retirement Age and Life Expectancy. Don’t take it from me. Visit their site and “play around” on their calculators to find out information specific to you and to find a wealth of information to help you make an informed decision on how to use your Social Security Benefits to your best advantage.
Remember to take into consideration if you can afford to delay benefits, when you plan to retire, how much will you need monthly in retirement and what other sources of income you have available during retirement. Make sure to include an emergency fund that is liquid.
Your adjusted gross income
+ Nontaxable interest
+ ½ of your Social Security benefits
=Your “combined income”
The above is another good reason for IUL’s – Indexed Universal Life Plans:
IUL’s are not seen as Combined Earned Income and therefore will not be seen as income for Social Security purposes discussed in the above link.
LET’s TALK IUL – Indexed Universal Life as a Vehicle for Cash Accumulation to help you achieve your dreams! It helps to supplement your Social Security Income which will probably not be enough for you to live on. Call now to see how an IUL can work wonders to help you achieve your dreams now and down the road… Kyla 971-327-5792
Usingcertain types of life insurancefor cash accumulation turns out to be a great option with a tax advatage that many have not heard about. What’s more…it’s available to everybody.
Here’s the excerpt that speaks specifically about life insurance:
Life Insurance works as Retirement Income
“It’s not likely, however, that you’ll have enough assets in a Roth IRA to provide all you’ll need for retirement. The next stop in the search for tax-free income is the insurance agent.
With the collapse of traditional pensions, insurers have seen increased interest in annuities, which produce guaranteed monthly payouts in exchange for a chunk of your savings.
When funded by a Roth IRA, one type of annuity—an immediate fixed annuity—gives its owner an income stream that’s not only tax-free but guaranteed for life. Even those funded by taxable savings can yield low-tax income because each monthly payment contains a small slice of your premium, which has already been taxed.
The life insurance retirement plan is another, more specialized, income-bearing product. Essentially a massively overfunded universal life policy, a LIRP allows the owner to withdraw the policy’s excess cash tax-free and take loans that will be repaid from the benefit when the owner dies.
Not everyone agrees that insurance is the best source of income, tax-free or not. Because the company has to take its cut and pay a death benefit, fees attending these investments tend to be high.
In addition, annuities require relinquishing control of your cash for long periods, if not permanently. A standard tool in many retirement planning schemes, annuities are more often used to guarantee that basic expenses are covered rather than to avoid taxes. And all but their most ardent advocates agree that the costs and complexity of LIRPs make them a solution more for high earners who have maxed out conventional retirement savings vehicles and are still seeking shelter.“
Obviously I’m a big advocates of using life insurance as an income generating vehicle in retirement because it has such great tax advantages. Why let the government tell me when I can or can’t take money out? Or reduce my social security benefits because I am. Life Insurance works as Retirement Income.
If this is something you’re curious about, reach out to me,I’d love the opportunity to show you how it looks on paper for your current situation.
Not against you. I’m sure you’ve all seen the latest hot topics on saving and retirement which include, among the many…
“save more for retirement now”
“building you nest egg now”,
“tax free retirement options”
“tax advantaged retirement products”
“working at Walmart during retirement”
…and more. With so much information out there on the topic, it seems there really is not enough in depth information on why it makes sense to use an Indexed Universal Life plan as a source of future income. What are the advantages tax wise of Cash Building, Cash Accumulation using Indexed Universal Life Insurance plans? Does your IUL Cash Accumulation effect your Social Security benefits? What about Long Term Care?
Can you Lower your taxes…using and Indexed Universal Life product?
You are probably being told to invest into “tax deferred” accounts like your company’s 401(k). Which means you will pay less tax today, and your employer usually offers to “match” up to a specific percent of funds you deposit. However, every action has an equal and opposite reaction. So, does paying no tax now, in exchange for having to pay tax later on in life, end up beinga good or bad reaction.
Let’s take a look at a 30 year-old person earning $75,000 per year who decides to invest the maximum amount into a traditional 401(k)…the probability of saving roughly $730,000 in taxes is extremely high. Sounds good…right? The problem is that once this person reaches the age of 70, he/she will, if the account grows at only 5 percent, pay roughly $1.5 million back in taxes while retired, and his/her overall nest egg will be cut in half…at best. The other issue? Being taxed two more times, as well. Yes, two!
In the above example, due to their income levels,the Social Security benefit received will be taxedup to 85 percent of the benefit. By using an Indexed Universal life insurance policy as an additional means of saving for retirement, this person will create yet another way to pay fewer taxes while being able to keep more for themselves. They will start retirement with less, but they will most likely end with a lot more.
Every dollar you invest into a traditional 401(k) will ultimately lead to: Fewer Social Security benefits in retirement, Higher health costs in retirement, and unfortunately, More taxes, paid at a higher income tax rate than when you were working. You most likely won’t have as many deductions when you are retired as your kids will most likely be grown and your house paid off. (Let’s hope) This means your effective tax rate may rise.
Cash Accumulation Building life insurance works. It can generate a revenue source that not taxed AND which is not recognized by Medicare.
Does an Indexed Life Insurance plan generate a source of income which can not be used to supplement the loss of Social Security?
Currently, premiums for Medicare Part B, late penalties, and all surcharges due to income must be automatically deducted from your Social Security benefit. Medicare Part D premiums are optional, but retirees are encouraged to pay through Social Security to avoid any missed payments later on in life. In retirement, you will probably fund your health care directly through your Social Security benefit.
HistoricallyMedicare premiums have inflated at over 7.5 percent annually and are expected to inflate by at least 6.2 percent going forward. Now…the negative is that Social Security cost of living adjustment (COLA’s) are only expected to inflate by as much as 2.8 percent for the foreseeable future, according to the Medicare Board of Trustees.
So, what does this have to do with Cash Accumulation Indexed Life Insurance (IUL)? Well, IUL’s generate a source of income that can not only be used to supplement the loss of Social Security, and also will not drive up those health costs in the form of higher surcharges imposed by Medicare. So you keep more of your Social Security benefits in retirement and have a more predictable cash flow.
Why should you consider health costswhen looking at a Cash Accumulation Building Life Insurance Vehicle, such as an Indexed Universal Life Insurance plan?
Believe it or not,what the president has been saying since 2011 is has now become true: You must have health coverage, or else you will face penalties, fines and possibly a loss of your Social Security benefit. This means that you must have Medicare.
Medicare just happens to not be free, and is based on your income. This means, the more income you have, the higher your health costs will be. So what might that cost? In order to be fully insured with Medicare Part B, Part D and Plan F (which is referred to as a Med Sup, Med Advantage or Medigap plan), a typical 55-year-old couple that plans on retiring at age 67 and living to age 85 can expect to incur roughly $525,000 in premium costs alone. Add to that the estimated 6.2 percent inflation costs of health care each year. Centers of Medicare Services (CMS).
Medicare is “means-tested,” so the government will look at income and everything in in your financial plan (401k, IRA, Etc.)Let’s look at that hypothetical couple (in the above paragraph)whom happened to earn $1 too much by Medicare standards; they could expect to pay about $640,000 for the exact same coverage, over the same period…that’s over $110,000 difference in costs. If the couple earns the maximum Medicare income for means-testing purposes they can expect to incur about $1.16 million for the exact same coverage. And to top that off there is talk in legislation of wanting 25% of retirees to pay even more for Medicare.
Here’s the Good part…Pay Attention…Cash value within an Indexed Universal Life Insurance policies (IUL’s)is NOT counted as income by Medicare. That means you will be able to tap a revenue source in retirement that won’t be used against you when your health is on the line.
Does Long Term Care play into an Indexed Universal Cash Building insurance plan?
Roughly 70 percent of all baby boomers are going to need some form of long-term care in retirement, and 25 percent of those will need to stay in a facility (for at least three years), according to the Department of Health Human Services.
Costs of an annual stay in a facility will be about $78,000 and that does not include Health Care Expenses…after adding in the expected inflation rate of at least 6.2 percent for health care, how many people will be able to afford this?
Everyone has heard of Long Term Care Insurance policies. They are VERY expensive, especially if you put off purchasing them till later in life…which many do. These plans have been around for years. They provide great coverage options,but as mentioned these policies can be VERY expensive. Monthly payments may remain the same, year in and out, but this is not true of all plans. Increasing premium plans can become very costly the longer the person lives. LTCI carriers have been increasing their rates by up to 50% to keep up with expenses and as long as expenses keep rising, premiums will too.
You may be able to afford the premiums today the potentially significant premium increases in the future, if you are on a fixed budget, may bankrupt you, making a LTCI product not such an ideal situation. You may even have to surrenderyour policy, if you can’t meet the rising premiums.
Many Indexed Universal Life Insurance policies provide the opportunity to purchase a rider which offersLong-Term Care coverage to meet your needs down the road with out forfeiting your death benefit. This will provide a certain level of coverage in the event that it is needed.
These are a few reasons that an Indexed Universal Life Insurance plan might work really well for your situation now, and in the future…when you need it most.