Are You Paying Too Much for Healthcare?

If you believe the answer could be “YES”, it may be worth your time schedule a free consultation with us today!

You will receive valuable facts from us about the benefits of an insurance company and a Medicare Supplement Insurance policy. You can select the coverage that fits your specific needs, without the expense of unnecessary benefits.

Our Medicare Supplement Insurance policies can help pay some of your health care costs, including: hospital care and doctors’ visits. You do not have to belong to a group to obtain this important information. With today’s rising health care costs, the choices you make should be informed choices. We’re prepared to help.

Some believe that Social Security may go the way of the dinosaur before long. But for now, it is one of the most important sources of retirement income. With 10,000 Baby Boomers turning 62 every day, we get more and more questions about Social Security. “When should I apply for Social Security benefits?” is one of the biggest questions we hear.

For many middle-income married couples, Social Security benefits comprise 20% – 50% of their retirement income with lifetime benefits reaching upwards of $500,000. Social Security is adjusted annually for inflation, benefits can be taxed up to 85%, and it is backed by the government and guaranteed for life.

Understanding the importance that Social Security, it makes sense to maximize this vital asset. By maximizing (or optimizing) Social Security benefits you can save tens or even hundreds of thousands of dollars over the span of one’s retirement.

Optimization Overview

Delay:
The longer you wait to receive Social Security, the bigger your benefit – up to age 70.

Spousal strategies:
Married couples can tag-team on each-others’ benefits. One spouse can delay their benefit to allow it to grow and claim “spousal” benefits, which are half of the monthly benefit that the other spouse receives. Once the delayed benefits reach their maximum the spouses can switch.

  • For example, say a 59-year-old wife and 61-year-old husband use this method. She starts benefits at 64 while he claims spousal benefits until 70, and then starts his own benefits. Assuming they both have average life expectancies, of 82 for him and 86 for her, they will have received roughly $76,000 more than if they had both started claiming benefits at 62.

Life Expectancy:

  • If that same couple expects to live longer than the average life expectancy, her to 92 and him to 88, they can wait until she is 66 to claim spousal benefits. Both spouses can defer their benefits until she is 69 and he is 70. They would then receive $137,000 more.
  • Unless you have a medical history that expects a shorter life span, it is more efficient to prepare for a longer one.

Divorced couples can claim the other’s benefits for a few years as long as they were married longer than 10 years.

Single people can delay their benefits to allow them to grow.

Carving out income into a tax-deferred annuity or other tax-savings approaches you can protect income and grow their retirement.

Evaluate assets: Do you have enough to live on if you delay your benefits? If so, the extra money is worth pulling money out of personal accounts.

Core Concept #1: Timing

How much you receive in Social Security benefits depends on your earning record, at what age you apply, and your life expectancy. You can’t change your earnings record, and have little control over your life expectancy, so at what age you choose to begin receiving Social Security is crucial.

Can you delay receiving your benefits or do you need them now? Every client’s situation is different and so is the best timing for applying for your Social Security benefits. You may be able to delay taking benefits, or need them sooner, depending on whether you or your spouse is working.

At age 66 you will receive your full Social Security benefits, but you are eligible to receive 75% of your full benefits if you apply at age 62. Also, if you delay the onset of benefits past age 66 you earn delayed actuarial credits until age 70. These credits increase your benefits by 8% per year, so that at age 70 you will receive 132% of your full benefits.

Can I wait and let the benefit grow to a larger amount or should I apply early and collect as long as I can? This is the key question for leveraging the delayed credit system and optimizing benefits. That’s why the idea that “the bread winner will delay” is important. Ideally, the longer the primary earner delays, the more the monthly income will increase, but every situation is unique.

Theoretically, if you begin receiving Social Security early, you will receive a smaller monthly benefit for a longer time, and if you delay, you will receive a larger monthly benefit for a shorter time. There are “break-even calculators” which can be used to figure out how long you would have to live to make delaying worthwhile. These calculators work for single people, but it is more complicated for married couples.

The decision is also more complex for married couples. Married couples have to consider how the retired worker benefit, spousal benefit, and survivor benefit will affect your benefits and life time maximums.

Core Concept #2: Delayed Actuarial Credits

The Delayed Actuarial Credit is probably the most important element to maximizing Social Security benefits. These credits are also known as Actuarial Reductions or Delayed Retirement Credits.

Actuarial Reduction is applied when a retiree applies for Social Security prior to full retirement age (FRA). Effectively, if full retirement age was 66, someone taking at 62 is going to receive a 25% reduction. That is 75% of what their full retirement age benefit would be, and that’s due to actuarial reduction.

However, if one delays past their FRA, delayed retirement credits get applied. So, for each additional year you wait, you would get an 8% delayed retirement credit. This is simple interest. So, at age 70, if you had delayed receiving your Social Security benefites, you would receive 132% of what your full retirement age benefit would have been.

Social Security is generous to married couples. Thus, major differences exist between spousal benefits and benefits on an individual’s earnings record. Spousal benefits are reduced on a faster schedule than an individual’s benefits if the person elects early. For example, if you take your own benefit at 62 you’d get 75% of your full retirement benefit; if you take your spousal benefit at 62 you would only get 70% of your full benefit and the schedule for reduction is a little different than electing on your own record.

Importantly, spousal benefits don’t get delayed retirement credits. It’s only the individual record that receives them, for every year an individual delays past full retirement age, they get an additional 8% per year delayed. That doesn’t happen with a spousal benefit, however it can be a key strategy when used in conjunction with a concept called “File and Suspend”.

Survivor benefits are another key area for maximization. Survivor’s benefits are only available to married couples. At time of the spouse’s death, the survivor generally receives the highest out of either his or her own benefit, the benefit of the deceased, or 82.5% of the full retirement age benefit of the deceased. The lesser benefits disappear.

So, in many cases you’ve got a married couple in which the female spouse lives longer and the husband has had a higher earnings record. If the husband is electing early he is effectively short changing the survivor benefit to his wife.

Core Concept #3: Little-Known Filing Strategies

Some unusual claiming strategies exist to help your clients optimize the growth of their benefits. Few advisors are familiar with these concepts. Experts call these “switch strategies” because they include the election of a limited benefit for a short period of time and then switching to a higher benefit at some point in the future. Some have seen these strategies result in $20,000-$30,000 in newfound income. For the purpose of this white paper, we will only touch upon the concept.

File and Suspend
The first strategy is called “file and suspend.” This allows the primary earner to delay and grow his benefits a guaranteed 8% per year while the lower-earning spouse collects every month. The one can file for their benefit, which makes your spouse eligible for their spousal benefit, and then immediately request that your benefit be suspended. The person requests to receive no checks, and that triggers the 8% growth per year. Then years later he or she can draw Social Security benefits.

Restricted Application
A second concept is called the “restricted application.” The lower earner gets $1,000 per month for example. The primary earner delays his retirement to age 70 to get the 8% growth. The primary earner files a “restricted application” for his spousal benefit under his wife’s earnings record. This will allow him to collect $500 per month (half her monthly benefit) until he turned 70 without adversely affecting his delayed earnings. The truth is if he doesn’t file that restricted application, he will lose out on his right to $24,000.

Tying Maximization Together with Retirement Planning
Take the time to learn the ins and outs of Social Security with the help of your advisor’s education materials. Sociality Security is one of the hottest financial planning topics today, and everyone should become well versed in the workings of Social Security. We can help consumers work through plans for retirement, while smoothing out potential surprises and bumps in the road. The real key to a successful plan, is to start early and review your progress on a regular basis.

Social Security Administration: Social Security Basic Facts (www.ssa.gov)

Video
Social Security: Just the Facts

Understanding the Differences Between a Will and a Trust

Everyone has heard the terms “will” and “trust,” but not everyone knows the differences between the two. Both are useful estate planning devices that serve different purposes, and both can work together to create a complete estate plan.

One main difference between a will and a trust is that a will goes into effect only after you die, while a trust takes effect as soon as you create it. A will is a document that directs who will receive your property at your death and it appoints a legal representative to carry out your wishes. By contrast, a trust can be used to begin distributing property before death, at death or afterwards. A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a “trustee,” holds legal title to property for another person, called a “beneficiary.” A trust usually has two types of beneficiaries — one set that receives income from the trust during their lives and another set that receives whatever is left over after the first set of beneficiaries dies.

A will covers any property that is only in your name when you die. It does not cover property held in joint tenancy or in a trust. A trust, on the other hand, covers only property that has been transferred to the trust. In order for property to be included in a trust, it must be put in the name of the trust.

Another difference between a will and a trust is that a will passes through probate. That means a court oversees the administration of the will and ensures the will is valid and the property gets distributed the way the deceased wanted. A trust passes outside of probate, so a court does not need to oversee the process, which can save time and money. Unlike a will, which becomes part of the public record, a trust can remain private.

Wills and trusts each have their advantages and disadvantages. For example, a will allows you to name a guardian for children and to specify funeral arrangements, while a trust does not. On the other hand, a trust can be used to plan for disability or to provide savings on taxes. Your elder law attorney can tell you how best to use a will and a trust in your estate plan.

Help Lift the Burden of Final Expenses

Help lift the burden of final expenses from your loved ones with a guaranteed life plan that you cannot be turned down for regardless of your health.

The average price of a funeral can reach over $10,000, and, if you qualify, Social Security only provides a one-time death payment of $255. If the unexpected occurs, your family could also be faced with a funeral bill and other expenses that they may find difficult to pay at a time when they are suffering most from grief and loss. With a Final Expense Guaranteed Life Insurance policy, you can have the peace of mind that comes from knowing you’ve planned ahead to ease the burden of final expenses. The plan provides up to $25,000 to help pay:

  • Medical bills
  • Leftover debts
  • Funeral costs

Plus, unlike term insurance, your Guaranteed Life Insurance policy builds cash value that you can use if needed. These plans are fully guaranteed and you cannot be turned down regardless of your health.

Is a 401(k) Rollover Right for You?

When you left your old job, did you leave your retirement savings behind? Give your money a fresh start by rolling it over into an IRA.

What you Gain from a 401(k) Rollover

  1. Get more flexibility with your investments.
    With an IRA, you have the freedom to select from a wider range of investments than most employer-sponsored plans typically offer.
  2. See your entire retirement picture in a single view.
    When all of your retirement savings are in one place, it’s easier to manage your accounts and monitor your progress.
  3. Keep your retirement savings tax-advantaged.
    Just like your 401(k), 403(b), or other retirement plan, an IRA offers important tax benefits.

 

The Facts
  • 84% of Americans have had at least some experience with nursing homes — either as a patient or a visitor, and 46% say a family member or close friend has been in a nursing home in the past three years.  (Senior Journal, July 2005.)
  • Medicare generally doesn’t pay for long term care.  (www.medicare.gov, 2005.)
  • 48% of today’s workers are not confident in their ability to pay for long term care in retirement.  (Retirement Confidence Survey, Employee Benefit Research Institute, 2004.)
  • By 2030, 20% of all Americans, or about 70 million people, will have passed their 65th birthday.  The average 75-year-old has three chronic conditions and uses five prescription drugs.  (Executive Summary, The State of Aging and Health in America, Centers for Disease Control, 2004.)
The Risks
  • You have a one-in-96 chance of your house being damaged by fire. Surely your home is covered.
  • You have a one-in-five chance of your car being damaged in an accident. You wouldn’t drive without auto insurance.
  • But you have a 50% chance that you will need long term care at some point in your life. So why wouldn’t you insure your independence?

(2004 Field Guide, National Underwriter, 2004.)

The Costs
  • Two-thirds of single people and one-third of married couples exhaust their funds after just 13 weeks in a nursing home.  Within two years, 90% will be bankrupt.  (2004 Field Guide, National Underwriter, 2004.)
  • The average cost per year of nursing home care is $57,700.  (Kiplinger’s Retirement Report, March 2004.)
  • The median cost of care in an assisted living facility is $30,000 per year.  (Adult Day Care Services, AARP, February 2004.)
  • By 2030, the average nursing home stay will cost approximately half a million dollars ($468,960).  (Kiplinger’s Retirement Report, March 2004.)

When you change jobs or retire, there are four things you can generally do with the assets in your employer-sponsored retirement plan:

  1. Leave the money where it is
  2. Take the cash (and pay income taxes and perhaps a 10% federal penalty tax if you are younger than age 59½ )
  3. Transfer the money to another employer plan (if the new plan allows)
  4. Roll the money over into an IRA

Rolling over from one qualified plan to another qualified plan allows your money to continue growing tax-deferred until you receive distributions in retirement.

We can help you determine if a rollover is the right move for you.

If you determine to cash out of the IRA, we can help you find suitable vehicles to help you reach your retirement income goals.
IRA accounts have become one of the largest types of assets inherited by beneficiaries. If you don’t anticipate needing your IRA money in retirement, you may wish to consider a legacy planning strategy to reduce taxes and increase the payout your beneficiaries will receive upon your death.

You may want to use some of your IRA assets to provide your beneficiary(ies) a regular stream of income while leaving the balance of IRA assets invested for tax-deferred growth. The result may yield substantially more money paid out over the course of your beneficiary’s lifetime. We can help you evaluate your financial situation to determine if IRA legacy planning may be the best means for ensuring a long-lasting inheritance for your heirs.

The 401K Fallout Video

How Does Indexed Universal Life Insurance Work?

Indexed universal life (IUL) insurance is the same as traditional universal life except for how the interest is credited. It’s based partly on the upward movement of a stock market index. Therefore, growth in the value of the policy is potentially higher.

  • Interest based partly on a market index
  • Protected from the market’s downside
  • Flexible coverage throughout your life
What Can IUL Do for You?

An indexed universal life insurance has the benefits of traditional universal life plus the potential for greater growth in your policy value.

Gives You Upside Potential
An indexed universal life insurance policies credit interest based partly on the upward movement of a major stock market index, so when the market does well, so do you. Over the life of the policy, this could mean more cash value and more supplemental retirement income. And the tax-deferred benefits of a traditional universal life policy still apply.

Gives You Downside Protection
You also get a guaranteed minimum interest rate with some indexed universal life policy. So while you’re taking advantage of the market going up, you’ll never suffer losses due to the market going down.

What Are the Other Benefits of Having an IUL?

An Indexed Universal Life (IUL) insurance policy gives you the same flexibility and safety of other universal life policies.

Puts You in Control
As your needs change, your policy can change, too. You can change the death benefit, increase or decrease your premiums, and add options or riders to fit your needs.

Transfers Your Wealth
An Indexed Universal Life policy can help you leave a legacy to pass on to your heirs by giving them as much of your estate as possible, while making sure your tax and other obligations are satisfied.

Builds Your Savings
Indexed universal life insurance provides a tax-deferred way of accumulating a cash value at competitive interest rates.

Gives You Access to Funds
You can make withdrawals or borrow against, the cash value in your policy. Your Indexed universal life policy can also be used as collateral for securing an outside loan, letting you tap the equity in your policy for a variety of needs: education, retirement and emergencies.

Protects Your Family
The death benefit gives you peace of mind knowing that your loved ones will not face financial hardship should you die. And the value can grow with your family and your needs.

For more information, visit our Indexed Universal Life Insurance FAQ.

What is a Mortgage Protection Plan?

One of the main life insurance products that we offer is Mortgage Protection Insurance. Mortgage Protection Insurance is a product that homeowners can use to completely cover their biggest and most important asset: their home. With Mortgage Protection Insurance, you won’t have to worry about being denied due to preexisting medical conditions, as this coverage requires no medical exam.

Whether it’s a death benefit to cover the full amount of your home loan amount or monthly disability coverage for your mortgage payment, you will have peace of mind knowing that your family will not have to take on the extra burden of covering a house payment. Contact us today, and one of our local mortgage protection advisers will work with you to create a customized mortgage protection plan with rates that fit your needs and most importantly, your budget.

Popular options available to include with your mortgage protection insurance plan:

  • Return of Premium (receive all your premiums back)
  • Disability Coverage to pay your mortgage payment
  • Critical Illness, Chronic Illness, Terminal Illness
Do I Need Mortgage Protection Insurance?

Your home is probably your biggest asset and largest investment you will make. If your family’s income decreases drastically due to your death and you only have ordinary life insurance, they could be left with very little of the life insurance pay-out after paying off the mortgage. Mortgage protection insurance is specifically there to cover the mortgage so that the life insurance pay-out can help your family get back on their feet.

Your Mortgage Protection Insurance can be used in a variety of ways. It can be paid out in one lump sum to pay off your home mortgage entirely, or you can choose to have the plan paid out in monthly installments, as mortgage payment protection insurance, should you become unable to work. You can also add your children to the plan so they can convert the insurance to their own coverage when they leave the nest.

Mortgage Protection Insurance is a risk free investment. Your premiums will be returned if you do not use the coverage, and we guarantee your premiums, so they will not increase as you age. Contact one of our advisers today so you and your family can relax knowing that, in the event of the unexpected, your home is covered.

Do I Already Have Mortgage Protection on My Loan?

Most of the time, what you have is PMI (private mortgage insurance) already added in when you take out your loan. Homeowners are required to have this insurance if the balance of their loan is more than 80% of the original property value.

However, this mortgage insurance does not protect you, but protects your lender if you quit making your mortgage payments. Many homeowners believe they have protection because of this insurance and leave themselves open to tragic circumstances should something happen to their family or loved ones.

Why Should I Get Mortgage Protection Insurance Instead of Using the Life Insurance I Already Have?

Life insurance is meant to provide for living expenses for a long period of time should a provider pass away. Without Mortgage Protection Insurance, you would have to pay off your biggest debt using a large sum of your life insurance, drastically reducing the amount for your future living expenses.

Whether you are approaching retirement or are in retirement the concern for most is the thought of not having enough income to afford the lifestyle you currently enjoy or eventually enjoying the lifestyle you’ve waited and worked so hard for. Either way, retirement income has posed a major challenge for most individuals; one that we feel a sense of duty to help you successfully overcome.

There are three major phases of Retirement Income Management:

  • The Accumulation Phase
  • The Distribution Phase
  • The Preservation or Transfer Phase

We will take you through each phase and will partner with you to uncover the various opportunities, options, and concerns included in each phase and walk you through the process of:

  • Determining how much retirement income you will need
  • Identifying your “income for life” sources
  • Estimating how long your current income plan may last
  • Calculating how much additional income you may need
  • Evaluating your additional income sources

When developing a plan, we will look at all the major elements involved in income planning, including growth, income streams, flexibility, and preservation and work with you to develop a plan that satisfies your interests, goals and objectives.

As an independent insurance firm, we are able to utilize dozens of insurance carriers to find the best rates and product solutions to fit your specific needs. We also offer complimentary reviews on your existing annuity and life insurance contracts.

Effective college fund planning requires an extensive knowledge of the educational, social and financial aid system. Many families do not realize that paying for college is also a retirement issue. The average annual cost of attendance to an in-state public college is $21,447; whereas a conservative budget for private college attendance is currently $42,224 annually. These numbers are disconcerting for parents because of the threat to their retirement funds and to students because of the potential of being saddled with long-term student loan debt. To address these issues, we have partnered with financial professionals across the country who are equipped to assist with both areas of concern.

When making a major investment (such as purchasing a home) it is helpful to work with an expert who is familiar with the industry (such as a realtor) and who can help you navigate the unfamiliar terrain. College funding is no different. Our experts are available to assist you in making decisions based on industry knowledge and experience:

  • Personal consultation with a college planning consultant to discuss your family’s individual needs
  • Help you understand available financial aid
  • Suggest income and tax strategies
  • Financial planning for the future
Why Buy Life Insurance?

Why should you bother with life insurance?  It provides the basis for your overall financial strategy and allows you to plan for the future.  Every day individuals benefit from life insurance.  They enjoy security and protection because family members or loved ones purchased policies before their deaths.

Some people equate the need for life insurance with having a family.  In fact, the value of life insurance applies to many situations — a parent raising a child alone, a couple with several children, a single person with parents who need care, or someone wishing to leave behind a lasting legacy.

Life Insurance:

  • Provides a basis for your overall financial strategy
  • Pays off when you least expect it to and helps when your family needs it most
  • Protects your family for a term of years, and benefits you (the insured) in case of survival
  • Relieves anxiety in adulthood and middle age, and relieves want from old age
  • Is the only plan that will guarantee a known sum at an unknown time
  • Provides children with guardianship, support, education, and social advantages until they are prepared to take on the burdens of life with adequate preparation
  • Builds up valuable reserves
  • Costs little and rewards greatly
  • Increase in value the longer you keep it
  • Ends only when you cash in on it
Life Insurance Resources

What is Permanent Life Insurance?

INBC News – Investing in Life Insurance

Remle Win and Real Life Story

Transamerica Legacy of Love