This document provides an overview of the role of cash value life insurance in retirement planning. It discusses how cash value life insurance can provide benefits if the policyholder dies, becomes disabled, or lives to retirement. The document outlines how cash value life insurance can serve as a source of retirement income through policy loans and withdrawals. It also notes various tax advantages of cash value life insurance, such as tax-deferred growth and income tax-free death benefits. The document aims to educate readers on how cash value life insurance products work and their potential benefits for retirement planning.
Social Security will likely provide less retirement income than expected. It was intended as a foundation for other savings through pensions, investments, and insurance. While focusing on retirement benefits, Social Security also offers disability and survivor benefits. Earnings after retirement only impact benefits for those below full retirement age. Benefits may be taxable based on other income levels.
The role of life insurance in retirement planningBill Hurlbut
This document discusses the role of cash value life insurance in retirement planning. It can provide benefits if the policyholder dies, becomes disabled, or lives to retirement. At retirement, the cash value can be a source of income through withdrawals, loans, or converting it into a lifetime annuity. It allows tax-deferred growth and flexible access to funds. Withdrawals and loans reduce the death benefit and cash value.
This document summarizes recommendations from economic studies on how retirees should invest lump sums at retirement. It finds that annuitizing a substantial portion is generally optimal. Specifically:
1. Annuitize enough to cover minimum living expenses not covered by Social Security or pensions.
2. Annuitize a significant portion of remaining savings for longevity insurance, while investing the rest in stocks and bonds. How much depends on individual factors.
3. Consider annuities with riders to cover potential large healthcare or long-term care costs later in retirement.
A document discusses accumulating funds in a deferred fixed interest and indexed annuity for retirement. It describes how annuities can be used to systematically save money and guarantee retirement income that cannot be outlived. It then provides details on sources of retirement income, obstacles to retirement planning, and how annuities can help overcome those obstacles by allowing tax-deferred growth and converting savings into guaranteed lifetime income.
This newsletter provides information about Social Security benefits, health insurance options for early retirees, ways to pay for graduate school, and the key provisions of the new Credit CARD Act of 2009. Specifically:
- Delaying receiving Social Security benefits past full retirement age results in larger monthly payments due to delayed retirement credits of up to 8% annually.
- Early retirees need to consider health insurance options like COBRA or individual policies since few employers offer retiree health benefits.
- Graduate students can take out federal loans, apply for scholarships and grants, and use employer educational assistance or education tax benefits to help pay for school.
- The Credit CARD Act of 2009 aims to increase transparency and
Social Security faces long-term funding shortfalls due to increasing life expectancies and decreasing birth rates. While current retirees are secure, reforms will likely be needed to maintain benefits for younger generations. Options include raising taxes, raising the retirement age, and investing funds in private accounts. However, the future of the program remains uncertain as politicians debate solutions.
This document provides a guide to avoiding common mistakes in retirement financial planning. It discusses underestimating life expectancy, relying on being able to work longer than planned, neglecting healthcare costs, accepting low investment returns, failing to monitor withdrawal rates, and not getting a second opinion on your financial plan. It then provides more details on generating retirement income, sources of guaranteed retirement income, protecting assets with various types of insurance, other retirement considerations like housing and healthcare, and the basics of estate planning.
This document provides information about planning for retirement, including:
- Aiming to save two-thirds of your expected end-of-career income to maintain your lifestyle in retirement.
- Starting to save early takes advantage of compounding returns to grow savings over time.
- As retirement approaches, preserving savings and ensuring investments keep pace with inflation becomes important.
- People should ensure their pension plans are on track to provide sufficient retirement income.
Social Security will likely provide less retirement income than expected. It was intended as a foundation for other savings through pensions, investments, and insurance. While focusing on retirement benefits, Social Security also offers disability and survivor benefits. Earnings after retirement only impact benefits for those below full retirement age. Benefits may be taxable based on other income levels.
The role of life insurance in retirement planningBill Hurlbut
This document discusses the role of cash value life insurance in retirement planning. It can provide benefits if the policyholder dies, becomes disabled, or lives to retirement. At retirement, the cash value can be a source of income through withdrawals, loans, or converting it into a lifetime annuity. It allows tax-deferred growth and flexible access to funds. Withdrawals and loans reduce the death benefit and cash value.
This document summarizes recommendations from economic studies on how retirees should invest lump sums at retirement. It finds that annuitizing a substantial portion is generally optimal. Specifically:
1. Annuitize enough to cover minimum living expenses not covered by Social Security or pensions.
2. Annuitize a significant portion of remaining savings for longevity insurance, while investing the rest in stocks and bonds. How much depends on individual factors.
3. Consider annuities with riders to cover potential large healthcare or long-term care costs later in retirement.
A document discusses accumulating funds in a deferred fixed interest and indexed annuity for retirement. It describes how annuities can be used to systematically save money and guarantee retirement income that cannot be outlived. It then provides details on sources of retirement income, obstacles to retirement planning, and how annuities can help overcome those obstacles by allowing tax-deferred growth and converting savings into guaranteed lifetime income.
This newsletter provides information about Social Security benefits, health insurance options for early retirees, ways to pay for graduate school, and the key provisions of the new Credit CARD Act of 2009. Specifically:
- Delaying receiving Social Security benefits past full retirement age results in larger monthly payments due to delayed retirement credits of up to 8% annually.
- Early retirees need to consider health insurance options like COBRA or individual policies since few employers offer retiree health benefits.
- Graduate students can take out federal loans, apply for scholarships and grants, and use employer educational assistance or education tax benefits to help pay for school.
- The Credit CARD Act of 2009 aims to increase transparency and
Social Security faces long-term funding shortfalls due to increasing life expectancies and decreasing birth rates. While current retirees are secure, reforms will likely be needed to maintain benefits for younger generations. Options include raising taxes, raising the retirement age, and investing funds in private accounts. However, the future of the program remains uncertain as politicians debate solutions.
This document provides a guide to avoiding common mistakes in retirement financial planning. It discusses underestimating life expectancy, relying on being able to work longer than planned, neglecting healthcare costs, accepting low investment returns, failing to monitor withdrawal rates, and not getting a second opinion on your financial plan. It then provides more details on generating retirement income, sources of guaranteed retirement income, protecting assets with various types of insurance, other retirement considerations like housing and healthcare, and the basics of estate planning.
This document provides information about planning for retirement, including:
- Aiming to save two-thirds of your expected end-of-career income to maintain your lifestyle in retirement.
- Starting to save early takes advantage of compounding returns to grow savings over time.
- As retirement approaches, preserving savings and ensuring investments keep pace with inflation becomes important.
- People should ensure their pension plans are on track to provide sufficient retirement income.
This document provides information on using life insurance for retirement and estate planning purposes. It discusses three main reasons why retirees may still need life insurance: 1) to replace a spouse's lost income if they pass away, 2) for estate planning to distribute assets or pay estate taxes, and 3) to maximize IRA or retirement plan distributions by leaving tax-free life insurance proceeds to heirs. The document then discusses how much life insurance retirees may need based on obligations and supporting future family income needs. It also provides strategies for using existing life insurance policies, such as 1035 exchanges to annuities or lower death benefit policies, to gain tax benefits and income. Finally, it discusses how life insurance trusts can be used to keep policy
When to apply for Social Security benefits is an important decision for retirees. There are three main options - apply at age 62 and receive reduced lifetime benefits, apply at full retirement age of 66 and receive full lifetime benefits, or apply at age 70 and receive additional credits for lifetime. Delaying benefits provides higher lifetime income the longer the retiree lives. For married couples, maximizing benefits requires considering spousal and survivor benefits which provide protection if one spouse dies. Overall, delaying benefits for at least one spouse and using retirement savings in the interim is often the most efficient strategy to maximize income in retirement.
This document provides an introduction to superannuation. It discusses what superannuation is, why we need compulsory super, and the benefits of saving through super such as tax advantages. It emphasizes that starting contributions early and maximizing returns can make a big difference to the total amount saved by retirement. The document recommends seeking professional financial advice to understand options and strategies for one's personal situation.
The document discusses using Social Security as a form of longevity insurance. It explains that by having the higher earning spouse delay collecting Social Security benefits until age 70, it can maximize the survivor benefit for the remaining spouse. This strategy provides the highest monthly income for the surviving spouse if one of them lives an extremely long life into their 90s or 100s. Even if the higher earner passes away earlier, say at age 70, the surviving spouse would still receive a larger monthly benefit from the delayed collection compared to claiming earlier at age 62. Viewing Social Security in this way helps protect against the risk of outliving one's savings.
Smart Money magazine is a fully personalised and branded consumer-driven personal financial planning client publication. Sent to key clients, professional intermediaries and prospects, every issue will enable your business to improve client communication, raise brand awareness, develop greater marketing efficiency, enhance client retention and increase sales - all of which are becoming increasingly important, particularly in the light of Treating Customers Fairly (TCF) and the Retail Distribution Review (RDR).
Goldmine Media has been publishing Smart Money magazine for over a decade and every issue features timely and accurate editorial combined with intelligent design. Whether you are a financial adviser, wealth manager, accountant or solicitor, every issue will provide you with the perfect marketing solution to engage more effectively with your business audiences.
The front cover of Smart Money magazine features your business logo and company name printed in your corporate colours and also includes your contact details and regulatory statement. At no additional cost you can change the title name to make every issue even more bespoke and relevant to your business.
This document outlines strategies for maximizing Social Security benefits in retirement. It discusses four common mistakes retirees make: 1) Underestimating the real value of Social Security benefits, which can provide a guaranteed stream of inflation-adjusted income. 2) Rushing to collect benefits early without understanding the long-term costs of reduced payments. 3) Not understanding how a married couple can integrate their benefits to maximize total income and protections. 4) Being unaware that Social Security benefits may be partially taxable and subject to an "income tax torpedo" effect. The document provides details on Social Security claiming strategies and options for married couples to help optimize their benefits over a full retirement.
This document discusses private retirement savings in the United States. It begins by outlining the current state of retirement savings, noting that about 20% of Americans do not save and that Social Security is projected to run out of funds. The document then defines key terms like retirement, retirement savings, private savings, and sufficient savings. It estimates that individuals will need around $500,000-$1,000,000 in savings to retire comfortably. The document analyzes factors like taxes, debt, and human behavior that influence private savings, and says the three main economic perspectives will be considered to evaluate solutions to increasing retirement savings.
This document discusses reforms to the Social Security program in the United States. It notes that Social Security is projected to run out of funds by 2033 due to increasing life expectancies and fewer workers paying into the system compared to retirees receiving benefits. The document proposes means-testing Social Security by gradually phasing out benefits for high-income earners over $50,000 to help close the program's funding gap and extend its solvency by reducing projected shortfalls by around 75%. This phaseout plan aims to target benefits to those most in need while keeping Social Security funded for future generations.
The document provides an introduction to retirement planning basics. It discusses why individuals need to take retirement planning into their own hands given uncertainties around social security and pension benefits. It also notes the need to plan for unforeseen medical expenses in retirement and potential estate planning goals. The document outlines key factors to consider when determining how much money is needed for retirement, including desired retirement age, expected annual income needs, current savings, expected investment returns, and any pension benefits.
Working just a few more years can significantly reduce the amount baby boomers need saved for retirement. Delaying retirement by 1-4 years allows workers to save more, receive higher social security benefits, pay off debt, and have a shorter retirement to fund. Analysis shows a couple needing $510,000 saved if retiring at 62 could need $465,000 if retiring at 63 or as little as $117,700 if retiring at 70. Working longer provides substantial benefits for funding retirement.
You can’t always protect yourself and your loved ones from life’s uncertainties. Although we don’t like to think about it, we know that traumatic and tragic events may not always only happen to other people.
It is important to protect your home and car. And most people do. But it is also important to protect your life, your ability to earn an income, your health and your business interests.
Protecting loved ones from financial hardship should be an integral part of any financial plan. This guide explains why life insurance is so important for you and your family. It provides an overview of the different types of life insurance strategies available and case studies showing how they could protect you and your loved ones.
With the help of a Suncorp Financial Planner or Suncorp Authorised Representative, you can then develop a comprehensive risk management plan and decide how much is enough to keep you and your family’s lifestyle, dreams and future financially secure.
By now, you’ve done most of the hard work: holding down a career and acquiring assets to boost your financial situation along the way. Now, in the years leading up to your retirement, it’s time to really start thinking about that next phase of your life. And then, once you know what you want your retirement lifestyle to look like, you need to know how you are going to fund it, and how to access your money so it goes the distance.
There are many ways to live your retirement years – studying, volunteering, travelling. Maybe even working part-time. But you certainly don’t want to spend your retirement worrying about money. That’s where a little planning comes in. And the sooner you start planning for retirement, the better off you’ll be when you get there. This book is a guide to help you get a picture of your retirement, and then show you how to get there, including steps to reach your nest egg goal. The second part of this guide focuses on strategies to help you access your super once you’ve reached your retirement age.
Working just a few more years can significantly reduce the amount baby boomers need saved for retirement. Delaying retirement by 1-4 years results in higher lifetime income from salaries, Social Security benefits, and pensions. It also means savings and investments have more years to accumulate returns. The document estimates a couple needing $510,000 saved if retiring at 62 could need $465,000 if retiring at 63 or as little as $117,700 if retiring at 70. Working longer provides both higher income in retirement and reduces the lump sum needed to generate necessary retirement income.
Retirement has changed significantly from a reprieve from work to a continuation of work years due to various financial pressures. Factors influencing retirement decisions include health, finances, lifestyle preferences, and ability to perform a job. With increasing lifespans, retirement planning must account for potentially high healthcare costs. Many baby boomers are choosing to delay full retirement in order to maintain income and independence in the face of dwindling social security funds. Employers are also adapting to aging workforces through modified training programs. Comprehensive reforms are needed to address the impending challenges of supporting larger retired populations.
Happily ever after... or until we run out of money. Effects of longevity on f...GRAPE
Many people think that they are cautious and taking proper care of their future. They make precautionary savings and employ various strategies to try to make sure they are not out of money if they cannot work because of illness, or when they retire. Choices differ between people, depending on their financial situation, degree of optimism and attitude towards risk, but many are not saving enough for their old age.
The report discusses empirical evidence related to financial instruments which address the problems raised by longevity. We show how they could be expanded to encompass a large share of populations across Europe, as we age.
The document summarizes key principles for retirement saving and investing, including that there is no such thing as risk-free investing. It discusses options for withdrawing retirement funds, how today's employees are saving and investing for retirement, and provides homework on comparing retirement fund performance to the top 10 funds. The newsletter aims to provide straightforward retirement planning education and resources.
This document discusses key factors in retirement planning, including increased life expectancy, inflation, declining pensions, and health care costs. It outlines 5 steps for retirement planning: 1) set goals, 2) estimate expenses, 3) determine resources, 4) estimate savings needed, and 5) make adjustments if savings are insufficient. The document emphasizes starting to save early, maximizing tax-deferred savings plans, diversifying investments, and seeking professional financial planning assistance.
1) Cost-of-living adjustments (COLAs) increase Social Security benefits each year to offset inflation. These adjustments affect both current and future benefits.
2) COLAs increase benefits by indexing past earnings to current wage levels and then applying the COLA percentage to the primary insurance amount (PIA) each year.
3) Delaying benefits results in substantially higher benefits due to avoiding reductions and getting larger annual COLA increases applied to a higher starting benefit amount.
This document discusses retirement planning and aged care. It provides an overview of retirement income needs, including estimates that a single person will need $23,811-$41,112 annually for a modest to comfortable retirement, while a couple will need $34,499-$59,495. It also discusses aged care options like in-home care, residential care, and costs associated with each. The document stresses the importance of planning early for retirement and aged care given increasing lifespans so people can afford to fund their retirement lifestyle and future care needs.
This document discusses the role of life insurance in retirement planning. It notes that cash value life insurance can provide benefits if the policyholder dies prematurely, becomes disabled, or lives to retirement. At retirement, the cash value can be a source of income through lump sums, annuities, or withdrawals. It also details how life insurance protects income, grows tax-deferred, and allows flexible access to funds. The document outlines important facts about Social Security benefits and notes that personal savings are needed to bridge the gap between Social Security and other retirement income sources.
This document provides an overview of retirement planning and factors to consider when preparing for retirement. It discusses estimating future earning potential and life expectancy, sources of retirement income like Social Security and employer plans, estimating retirement savings needs, and the power of tax-advantaged retirement accounts. Key points made include that most people will live to retirement age and beyond, the average Social Security benefit replaces about 40% of pre-retirement income, and personal savings are needed to bridge the gap between expenses and other income sources in retirement. Delaying retirement planning can significantly reduce the amount saved.
This document discusses maximizing retirement readiness and provides an overview of a presentation on the topic. It highlights several challenges facing today's retirees, such as rising healthcare costs, longevity, taxes, and investment risks. It emphasizes getting answers to key retirement questions and having a retirement income analysis to test your strategy and ensure your savings will last throughout retirement.
This document provides information on using life insurance for retirement and estate planning purposes. It discusses three main reasons why retirees may still need life insurance: 1) to replace a spouse's lost income if they pass away, 2) for estate planning to distribute assets or pay estate taxes, and 3) to maximize IRA or retirement plan distributions by leaving tax-free life insurance proceeds to heirs. The document then discusses how much life insurance retirees may need based on obligations and supporting future family income needs. It also provides strategies for using existing life insurance policies, such as 1035 exchanges to annuities or lower death benefit policies, to gain tax benefits and income. Finally, it discusses how life insurance trusts can be used to keep policy
When to apply for Social Security benefits is an important decision for retirees. There are three main options - apply at age 62 and receive reduced lifetime benefits, apply at full retirement age of 66 and receive full lifetime benefits, or apply at age 70 and receive additional credits for lifetime. Delaying benefits provides higher lifetime income the longer the retiree lives. For married couples, maximizing benefits requires considering spousal and survivor benefits which provide protection if one spouse dies. Overall, delaying benefits for at least one spouse and using retirement savings in the interim is often the most efficient strategy to maximize income in retirement.
This document provides an introduction to superannuation. It discusses what superannuation is, why we need compulsory super, and the benefits of saving through super such as tax advantages. It emphasizes that starting contributions early and maximizing returns can make a big difference to the total amount saved by retirement. The document recommends seeking professional financial advice to understand options and strategies for one's personal situation.
The document discusses using Social Security as a form of longevity insurance. It explains that by having the higher earning spouse delay collecting Social Security benefits until age 70, it can maximize the survivor benefit for the remaining spouse. This strategy provides the highest monthly income for the surviving spouse if one of them lives an extremely long life into their 90s or 100s. Even if the higher earner passes away earlier, say at age 70, the surviving spouse would still receive a larger monthly benefit from the delayed collection compared to claiming earlier at age 62. Viewing Social Security in this way helps protect against the risk of outliving one's savings.
Smart Money magazine is a fully personalised and branded consumer-driven personal financial planning client publication. Sent to key clients, professional intermediaries and prospects, every issue will enable your business to improve client communication, raise brand awareness, develop greater marketing efficiency, enhance client retention and increase sales - all of which are becoming increasingly important, particularly in the light of Treating Customers Fairly (TCF) and the Retail Distribution Review (RDR).
Goldmine Media has been publishing Smart Money magazine for over a decade and every issue features timely and accurate editorial combined with intelligent design. Whether you are a financial adviser, wealth manager, accountant or solicitor, every issue will provide you with the perfect marketing solution to engage more effectively with your business audiences.
The front cover of Smart Money magazine features your business logo and company name printed in your corporate colours and also includes your contact details and regulatory statement. At no additional cost you can change the title name to make every issue even more bespoke and relevant to your business.
This document outlines strategies for maximizing Social Security benefits in retirement. It discusses four common mistakes retirees make: 1) Underestimating the real value of Social Security benefits, which can provide a guaranteed stream of inflation-adjusted income. 2) Rushing to collect benefits early without understanding the long-term costs of reduced payments. 3) Not understanding how a married couple can integrate their benefits to maximize total income and protections. 4) Being unaware that Social Security benefits may be partially taxable and subject to an "income tax torpedo" effect. The document provides details on Social Security claiming strategies and options for married couples to help optimize their benefits over a full retirement.
This document discusses private retirement savings in the United States. It begins by outlining the current state of retirement savings, noting that about 20% of Americans do not save and that Social Security is projected to run out of funds. The document then defines key terms like retirement, retirement savings, private savings, and sufficient savings. It estimates that individuals will need around $500,000-$1,000,000 in savings to retire comfortably. The document analyzes factors like taxes, debt, and human behavior that influence private savings, and says the three main economic perspectives will be considered to evaluate solutions to increasing retirement savings.
This document discusses reforms to the Social Security program in the United States. It notes that Social Security is projected to run out of funds by 2033 due to increasing life expectancies and fewer workers paying into the system compared to retirees receiving benefits. The document proposes means-testing Social Security by gradually phasing out benefits for high-income earners over $50,000 to help close the program's funding gap and extend its solvency by reducing projected shortfalls by around 75%. This phaseout plan aims to target benefits to those most in need while keeping Social Security funded for future generations.
The document provides an introduction to retirement planning basics. It discusses why individuals need to take retirement planning into their own hands given uncertainties around social security and pension benefits. It also notes the need to plan for unforeseen medical expenses in retirement and potential estate planning goals. The document outlines key factors to consider when determining how much money is needed for retirement, including desired retirement age, expected annual income needs, current savings, expected investment returns, and any pension benefits.
Working just a few more years can significantly reduce the amount baby boomers need saved for retirement. Delaying retirement by 1-4 years allows workers to save more, receive higher social security benefits, pay off debt, and have a shorter retirement to fund. Analysis shows a couple needing $510,000 saved if retiring at 62 could need $465,000 if retiring at 63 or as little as $117,700 if retiring at 70. Working longer provides substantial benefits for funding retirement.
You can’t always protect yourself and your loved ones from life’s uncertainties. Although we don’t like to think about it, we know that traumatic and tragic events may not always only happen to other people.
It is important to protect your home and car. And most people do. But it is also important to protect your life, your ability to earn an income, your health and your business interests.
Protecting loved ones from financial hardship should be an integral part of any financial plan. This guide explains why life insurance is so important for you and your family. It provides an overview of the different types of life insurance strategies available and case studies showing how they could protect you and your loved ones.
With the help of a Suncorp Financial Planner or Suncorp Authorised Representative, you can then develop a comprehensive risk management plan and decide how much is enough to keep you and your family’s lifestyle, dreams and future financially secure.
By now, you’ve done most of the hard work: holding down a career and acquiring assets to boost your financial situation along the way. Now, in the years leading up to your retirement, it’s time to really start thinking about that next phase of your life. And then, once you know what you want your retirement lifestyle to look like, you need to know how you are going to fund it, and how to access your money so it goes the distance.
There are many ways to live your retirement years – studying, volunteering, travelling. Maybe even working part-time. But you certainly don’t want to spend your retirement worrying about money. That’s where a little planning comes in. And the sooner you start planning for retirement, the better off you’ll be when you get there. This book is a guide to help you get a picture of your retirement, and then show you how to get there, including steps to reach your nest egg goal. The second part of this guide focuses on strategies to help you access your super once you’ve reached your retirement age.
Working just a few more years can significantly reduce the amount baby boomers need saved for retirement. Delaying retirement by 1-4 years results in higher lifetime income from salaries, Social Security benefits, and pensions. It also means savings and investments have more years to accumulate returns. The document estimates a couple needing $510,000 saved if retiring at 62 could need $465,000 if retiring at 63 or as little as $117,700 if retiring at 70. Working longer provides both higher income in retirement and reduces the lump sum needed to generate necessary retirement income.
Retirement has changed significantly from a reprieve from work to a continuation of work years due to various financial pressures. Factors influencing retirement decisions include health, finances, lifestyle preferences, and ability to perform a job. With increasing lifespans, retirement planning must account for potentially high healthcare costs. Many baby boomers are choosing to delay full retirement in order to maintain income and independence in the face of dwindling social security funds. Employers are also adapting to aging workforces through modified training programs. Comprehensive reforms are needed to address the impending challenges of supporting larger retired populations.
Happily ever after... or until we run out of money. Effects of longevity on f...GRAPE
Many people think that they are cautious and taking proper care of their future. They make precautionary savings and employ various strategies to try to make sure they are not out of money if they cannot work because of illness, or when they retire. Choices differ between people, depending on their financial situation, degree of optimism and attitude towards risk, but many are not saving enough for their old age.
The report discusses empirical evidence related to financial instruments which address the problems raised by longevity. We show how they could be expanded to encompass a large share of populations across Europe, as we age.
The document summarizes key principles for retirement saving and investing, including that there is no such thing as risk-free investing. It discusses options for withdrawing retirement funds, how today's employees are saving and investing for retirement, and provides homework on comparing retirement fund performance to the top 10 funds. The newsletter aims to provide straightforward retirement planning education and resources.
This document discusses key factors in retirement planning, including increased life expectancy, inflation, declining pensions, and health care costs. It outlines 5 steps for retirement planning: 1) set goals, 2) estimate expenses, 3) determine resources, 4) estimate savings needed, and 5) make adjustments if savings are insufficient. The document emphasizes starting to save early, maximizing tax-deferred savings plans, diversifying investments, and seeking professional financial planning assistance.
1) Cost-of-living adjustments (COLAs) increase Social Security benefits each year to offset inflation. These adjustments affect both current and future benefits.
2) COLAs increase benefits by indexing past earnings to current wage levels and then applying the COLA percentage to the primary insurance amount (PIA) each year.
3) Delaying benefits results in substantially higher benefits due to avoiding reductions and getting larger annual COLA increases applied to a higher starting benefit amount.
This document discusses retirement planning and aged care. It provides an overview of retirement income needs, including estimates that a single person will need $23,811-$41,112 annually for a modest to comfortable retirement, while a couple will need $34,499-$59,495. It also discusses aged care options like in-home care, residential care, and costs associated with each. The document stresses the importance of planning early for retirement and aged care given increasing lifespans so people can afford to fund their retirement lifestyle and future care needs.
This document discusses the role of life insurance in retirement planning. It notes that cash value life insurance can provide benefits if the policyholder dies prematurely, becomes disabled, or lives to retirement. At retirement, the cash value can be a source of income through lump sums, annuities, or withdrawals. It also details how life insurance protects income, grows tax-deferred, and allows flexible access to funds. The document outlines important facts about Social Security benefits and notes that personal savings are needed to bridge the gap between Social Security and other retirement income sources.
This document provides an overview of retirement planning and factors to consider when preparing for retirement. It discusses estimating future earning potential and life expectancy, sources of retirement income like Social Security and employer plans, estimating retirement savings needs, and the power of tax-advantaged retirement accounts. Key points made include that most people will live to retirement age and beyond, the average Social Security benefit replaces about 40% of pre-retirement income, and personal savings are needed to bridge the gap between expenses and other income sources in retirement. Delaying retirement planning can significantly reduce the amount saved.
This document discusses maximizing retirement readiness and provides an overview of a presentation on the topic. It highlights several challenges facing today's retirees, such as rising healthcare costs, longevity, taxes, and investment risks. It emphasizes getting answers to key retirement questions and having a retirement income analysis to test your strategy and ensure your savings will last throughout retirement.
The document discusses strategies for maximizing Social Security retirement benefits. It explains that Social Security may be facing funding shortfalls in the future if reforms are not made. Currently, the program's trust funds are projected to be depleted by 2033. The document then covers eligibility for Social Security benefits and how the benefit amount is calculated based on lifetime earnings. It also reviews spousal, survivor, and divorce benefits and emphasizes the importance of timing when to claim benefits, as waiting leads to higher monthly payments. Overall, the goal is to help people understand their Social Security options and how to make the most of this key retirement income source.
This document provides guidance on avoiding common mistakes in retirement planning and generating retirement income. Some key mistakes include underestimating life expectancy, failing to account for healthcare costs, and having returns that are too low. The document recommends estimating expenses, totaling income sources, and adjusting plans if there is a shortfall. Sources of retirement income that can be controlled include CDs, annuities, mortgage-backed securities, and municipal bonds, with annuities and mortgage-backed securities providing higher guaranteed rates of return.
Individual disability insurance can provide income replacement if you are unable to work due to disability. The document discusses how insuring your income through disability insurance is a fundamental part of financial planning, as your ability to earn an income may be your most valuable asset. It notes that over 25% of 30-year old males and over 20% of 30-year old females will become disabled for 90 days or more before age 65. The document emphasizes that if you become disabled, your savings and assets may not be enough to cover living expenses, making disability insurance crucial protection.
Most people's retirement prospects are fairly bleakMaxiLife
Deloitte's and HSBC have some pretty powerful information on your retirement future. There's plenty of bad news but it is mostly fixable.
You can accumulate enough wealth to retire comfortably if you take some action now.
Visit www.maxilife.com.au and find out how!
The document discusses challenges retirees face with managing their finances, including market volatility, longevity risks, healthcare costs, and inflation. It notes that average healthcare costs for a retiree are around $230,000 and that historically low-risk investments have not kept pace with inflation. The document advocates creating a customized portfolio that includes sources of steady income to outpace inflation and maintain one's standard of living in retirement. It also notes looming issues with Social Security and Medicare funding shortfalls that may require benefit adjustments.
6 Critical Social Security Facts Retirees Must KnowBravias Financial
If you are like most Americans, Social Security
may provide a significant portion of your income
in retirement. According to Social Security
Administration (SSA) statistics, Social Security
benefits account for about 36 percent of retirement
income for the average American.1 One of the
biggest mistakes today’s retirees can make is to
underestimate the importance of Social Security in
their retirement strategies. In an era of vanishing
pensions and volatile markets, Social Security offers
government guaranteed income that isn’t vulnerable
to market risk, can’t be outlived, and can provide for
your loved ones after your death.
Want to understand how our population is aging and what it means for you? Want an Action Plan for retirement? Use Abaris' simple tutorial to get answers to these questions and more.
Science has proved it: people today are living longer than ever before. But as average life expectancies have been rising, the mean retirement age has stayed more or less the same. Since 1940 the average life span has gone up about 17 years, now at about age 79, yet the average age of retirement is more or less the exact same, about 65 years old. That leaves a big gap of your life filled without a paycheck, which is why Social Security, pensions and retirement income products are so important.
Despite the importance of Social Security and pension plans, fewer people than ever have pensions today and Social Security rarely covers all of a retiree’s expenses. On average, money received from Social Security only makes up about 42% of an individual’s pre-retirement income. Additionally, Social Security reserves are suffering from underfunding, and are expected to run out by 2033 under current law. Pension plans are great in that they guarantee a lifetime income, but they’re becoming more and more rare. Today, the predominant form of individual retirement savings is in 401(k)s and IRAs. But those plans don’t automatically provide lifetime income, leaving people to struggle with longevity risk: the chance that you live far longer than you expect. If you lead a long healthy life, as you certainly hope to, you’d end up running out of your savings.One solution? Deferred income annuities.
A deferred income annuity is a way of insuring against longevity. You make a payment, or series of payments, to an insurance company. Insurance companies are able to pool risk and use the market for pooling and protection in ways that you can’t on your own. This allows them to pay you an annual income, beginning at some future date, for the rest of your life. Surely stocks tend to yield a greater financial return, but with a deferred income annuity the value is in the guaranteed protection and the peace of mind. Deferred income annuities aren’t right for everyone. If you’re younger than 45, in below average health, most concerned about passing money onto your heirs, able to “self-insure” off the wealth of your investment income, or if you haven’t saved enough and need to keep the money you have in case of emergency then you’re probably not the best fit for a deferred income annuity. But otherwise, you’re looking like a great candidate.
This document discusses how maintaining a lower standard of living while working makes retiring with a sustainable standard of living easier. It notes that higher income individuals often do not save enough to maintain their spending in retirement due to being accustomed to an expensive lifestyle. While lower income individuals also do not always save adequately, social security replaces a larger percentage of their pre-retirement income. The key takeaway is that consuming less now through saving more and maintaining a modest lifestyle allows one to avoid a dramatic drop in standard of living after retiring.
The document discusses 5 key risks to retirement planning: longevity risk, health care costs, changes to public policy like Social Security, inflation risk, and investment risk. It notes that people are living longer so savings may need to last 30 years or more in retirement. Health care costs like Medicare premiums and out-of-pocket expenses are significant. Public policy around programs like Social Security could change. Inflation erodes purchasing power over time. Market volatility from investing introduces risk to retirement savings. Proper planning and working with a financial professional can help mitigate these risks and create a retirement income plan.
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2. Annuitize a significant portion of remaining savings for longevity insurance, while investing the rest in stocks and bonds. How much depends on individual factors.
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1) Life expectancy is a critical factor in determining Social Security benefits, as benefits continue for life. The total amount received depends on how long you and your spouse live.
2) Maximizing longevity maximizes total Social Security benefits - a 62-year-old who lives to 100 could receive over 3 times as much in benefits compared to only living to 80.
3) Most people underestimate their life expectancy but thinking you may live to an older age could lead to better planning decisions, such as delaying Social Security benefits until age 70.
The document discusses different options for retirement planning including government programs like Social Security, employer programs, and individual programs like IRAs and life insurance. It notes that government programs alone are not enough to fully fund retirement and that employer programs have shifted more responsibility to employees. It emphasizes that individuals need to take responsibility for their own retirement security through options like IRAs, which offer tax benefits whether contributions are made pre-tax or post-tax, and life insurance, which can protect against both dying too soon and living too long into retirement.
The document discusses the importance of protecting your family's financial security through life insurance, disability insurance, and long-term care insurance. It notes that your future earnings are typically your most valuable asset but can be at risk if you die prematurely, become disabled, or require long-term care. It highlights that many families are underinsured for these risks. The document urges planning now to choose appropriate insurance coverage to safeguard your loved ones' financial well-being and independence.
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1. Preparing for Your Retirement:
The Role of Life Insurance in Retirement Planning
Did you know that cash value life insurance is the only financial product with
the flexibility to provide benefits if you die, if you become disabled or if you live
to retirement?
Table of Contents Page
Your Earning Power 2
Sources of Retirement Income 3
Important Facts About Social Security Retirement Benefits 4
P tn il ou infr Lft …C s V leLf I s rn e
oe t S lt
a o oa i i
e me a h au i n u a c
e 5
Cash Value Life Insurance and Retirement Planning 6
Features of Cash Value Life Insurance 7
Tax Issues 8
Types of Cash Value Life Insurance 9
Important Information 10
Role of Life Insurance in Retirement Planning 1
2. Your Earning Power
Earning Power:
Your Other
Your earning power - Income Income
your ability to earn an
income - is your most
valuable asset.
Investment S o s ’
p u es
Income Income
Few people realize that a 30-year-old couple will earn 3.5 million dollars by age 65 if
their total family income averages $100,000 for their entire careers, without any
raises.
How Much Will You Earn in a Lifetime?
Your Future Earning Power
Years
If Your Family Income Averages:
to
Age 65 $50,000 $100,000 $250,000 $500,000
40 $2,000,000 $4,000,000 $10,000,000 $20,000,000
35 1,750,000 3,500,000 8,750,000 17,500,000
30 1,500,000 3,000,000 7,500,000 15,000,000
25 1,250,000 2,500,000 6,250,000 12,500,000
20 1,000,000 2,000,000 5,000,000 10,000,000
15 750,000 1,500,000 3,750,000 7,500,000
10 500,000 1,000,000 2,500,000 5,000,000
5 250,000 500,000 1,250,000 2,500,000
If something happens to you during your working years,
how will your family replace your earning power?
If, as is likely, you live to retirement, will you have sufficient
retirement income to replace your earning power?
Role of Life Insurance in Retirement Planning 2
3. Sources of Retirement Income
When you retire and your earning power ceases, you will have to depend on three
primary sources for your retirement income:
Social Security According to the Social Security Administration,
the average retired worker in 2011 receives an
estimated $1,180 monthly benefit, about 40% of
average pre-retirement income. As pre-retirement
income increases, however, the percentage
replaced by Social Security declines.
Employer-Provided Plans You may be eligible to participate in a retirement
plan established by your employer and receive
pension income at your retirement.
Personal Retirement For many people, there is a gap between the
Savings retirement income they can expect from Social
Security and employer-provided plans and their
retirement income objectives. Personal retirement
savings represent the only way to bridge that gap!
Of these three primary sources of retirement income,
personal retirement savings is the one over which
we exercise the most control!
Role of Life Insurance in Retirement Planning 3
4. Important Facts About Social Security Retirement Benefits
The Social Security Normal Retirement Age, currently age 66 for
those people born between 1943 and 1954, is gradually increasing to
age 67 for persons born after 1954.
Early retirement results in a permanent reduction in the Social
Security retirement benefit. For example, the Social Security retirement
benefit of a worker born between 1943 and 1954 who retires early at age 62
will be reduced by 25%.
According to the Social Security Administration:
The maximum Social Security retirement benefit for a worker retiring at
full retirement age in 2011 is $2,366 monthly.
The average Social Security benefit for all retired workers in 2011 is an
estimated $1,180.
The Social Security spousal retirement benefit is limited to a
maximum o 5 % o t e r t e wo k rs b n f .
f 0 f h ei d
r r e ’ e ei t The spousal
retirement benefit is reduced if the worker retires before his or her full
retirement age.
How much do you want to rely on a source of retirement income over
which you have no control? Consider this quote from a Time
magazine article titled "Social Insecurity":
“ o g v r me tt p y p n in t t e a v n ig t eo b b b o r wi
F r o en n o a e so s o h d a cn i d f a y o mes l l
almost certainly require stunning benefit reductions or huge tax increases.
Most likely both. After years of fiscal and political fecklessness, an explosive
c n lso .
o cu in”
Question: When was this article published?
Answer: March 12, 1995, although the same statement could easily
apply today, in the absence of any reform to the Social Security
system.
Role of Life Insurance in Retirement Planning 4
5. A P tnil ouinfr Lft …C s V leLf I s rn e
oe t S lt
a o oa i i
e me a h au i n u a c
e
Cash value life insurance is the only financial product with the flexibility to provide
benefits:
If You Die... Should you die prematurely, the death benefit is
available to help replace your earning power.
This means that funds are available to provide
your family with an income, enable them to
remain in their home, help pay for an education
for your children...whatever the financial needs
that arise at your death, funds will be available
to help meet those needs.
If You Become Disabled... With the waiver of premium benefit, your plan
can become self-completing in the event of your
disability. This means that if you are sick or hurt
and unable to work, policy benefits will remain
available just as though you were paying the
premiums.
If You Live to Retirement... Most of us can expect to live to retirement age,
at which time cash value life insurance can serve
as a source of retirement income, while still
maintaining needed life insurance protection.*
This means that the same life insurance that
p oe td y u fmi ’ f a ca s c r y d r g
rtce o r a l s i n il e u i u i
y n t n
your working years can continue to play an
important role in helping to provide retirement
security.
* Wi d a l a d la swi rd c t e p l ys
t rwas n o n
h l e u e h oi ’
l c
death benefit and cash value available for use.
Role of Life Insurance in Retirement Planning 5
6. Cash Value Life Insurance and Retirement Planning
Cash value life insurance brightens your financial picture with flexibility, accessibility
to cash values, tax-deferred growth and an immediate death benefit.
In addition, there are a number of roles that cash value life insurance can play in
your retirement planning:
Source of At retirement, the cash value available in the policy can be:
Retirement
taken in a lump sum by surrendering the policy;
Income
converted into a guaranteed lifetime income; or
periodically withdrawn and/or borrowed to supplement
your retirement income (withdrawals and loans will
rd c t e p l ys d ah b n f a d c s v le
e ue h oi ’ e t
c e ei n
t a h au
available for use).
Retirement At retirement, you can elect the maximum life annuity
Income pension option from your pension plan and use life
Protection insurance death benefits to help replace your pension
income for your spouse, if you should die first. You and
your spouse then enjoy a higher pension income while both
of you are alive, with the knowledge that if something
should happen to you, your spouse will have a continuing
source of retirement income.
Accelerated Many life insurance companies make it possible for
Death Benefits poiy od r t c l c a p rin o a p l ysd ah b n f
l h les o ol t
c e ot o f oi ’ e t e ei
c t
early, if the policyholder is terminally ill, stricken with a
specific catastrophic illness or requires long-term care in a
nursing home.
Role of Life Insurance in Retirement Planning 6
7. Features of Cash Value Life Insurance
Immediate Death During your working years, your family is protected by the
Benefit life insurance. In the event of your premature death,
income-tax-free benefits are paid to your family.
Tax-Deferred Under current law, the annual growth of the cash value in
Growth a cash value life insurance contract is not subject to
current income tax.
Flexibility Certain types of cash value life insurance allow you to
increase or decrease your premium payments, or make
large, single premium payments.
Access to Cash You can borrow or withdraw life insurance cash values
Values prior to age 59-1/2 without tax penalty.*
Ownership Since you own the policy, benefits are not affected by
changes in employment or by changes in Social Security
or employer-provided pensions.
Disability Protection If you become disabled, the waiver of premium benefit
can take over your premium payments for you.
Tax-Advantaged The cash value in the policy can be converted to a
Retirement Income retirement income that is partially or fully free from
federal income tax.*
* Wi d a l a d la s wi rd c t e p l ys d ah
t rwas n o n
h l e u e h oi ’ e t
l c
benefit and cash value available for use.
Role of Life Insurance in Retirement Planning 7
8. Tax Issues Affecting the Role of Cash Value Life Insurance
in Retirement Planning
Tax-Deferred Growth
The Tax Court has held that cash values are not constructively received by a
taxpayer when he or she could not reach them without surrendering the policy. The
necessity of surrendering the policy constituted a substantial limitation or restriction
on their receipt (Theodore H. Cohen, 39 TC 1055, acq. 1964-1 CB-4).
FIFO Taxation of Withdrawals
Assuming a single premium or periodic premium life insurance contract satisfies the
c n io s o t e “e e -p y ts” o I C S c 7 0 A b ( e, n t a mo ie
o dt n
i f h sv n a et f R e. 7 2 () i . o . df d
i
endowment contract), living benefits received from the contract are taxed under the
“o t rc v r r l, rg r ls o wh n t e c n rc wa e trd it o wh n
c s e o ey ue” e ade s f e h o ta t s n ee n o r e
premiums were paid. This means that such amounts received from the contract are
included in gross income only to the extent they exceed the investment in the
contract (IRC Sec. 7702).
Policy Loans Are Income Tax Free
Policy loans from life insurance contracts are not treated as distributions, assuming
the policy qualifies as life insurance under IRC Sec. 7702 and is not considered a
modified endowment contract. Upon policy lapse or surrender, the outstanding loan
balance is automatically repaid from policy cash values. This may, however, cause
the recognition of taxable income. At death, the death benefit will automatically be
reduced by the amount of the outstanding loan, an action that does not cause the
recognition of taxable income.
Income-Tax-Free Death Benefit
A a g n rl ue d ah b n f saee cu a l f m t eb n f ir’ g o sic me
s e ea r l, e t e ei r x ld be r
t o h e ei ays rs n o
c
(IRC Sec. 101(a)(1)).
Income-Tax-Free Accelerated Death Benefits
Depending on current tax law, receiving an accelerated death benefit disbursement
may trigger a "taxable event" for the insured. Consult a tax professional about the
possible tax implications of accepting a disbursement of accelerated death benefit
funds.
Role of Life Insurance in Retirement Planning 8
9. Types of Cash Value Life Insurance
There are four types of cash value life insurance from which you can select a policy
that best satisfies your needs and objectives. The primary differences in the types of
cash value life insurance fall into three categories:
fixed or flexible premiums;
responsibility for investment decisions; and
benefit guarantees or benefits based on actual investment returns.
Whole Life The policyowner pays a fixed, level premium and cash
Insurance values accumulate at a guaranteed* rate of return. The
insurance company promises to pay a guaranteed* death
benefit. Policy dividends may be payable.
Universal Life The policyowner can increase or decrease premium
Insurance payments and select from a level or increasing death
benefit. Cash value accumulations reflect current interest
rates or are tied to a stock market index, such as the S&P
500 Index.
Variable Life The policyowner pays a fixed, level premium and selects
Insurance from a variety of investment options for cash value
accumulations. There is generally a minimum guaranteed*
death benefit and the potential for higher death benefits,
depending on the performance of the investment options
selected. There is no minimum guaranteed cash value.
Instead, the cash value available depends on the
performance of the investment options selected.
Variable Universal The policyowner can increase or decrease premium
Life Insurance payments and select from a variety of investment options
for cash value accumulations. If a minimum premium
payment schedule is maintained, there may be a minimum
guaranteed* death benefit. Cash values are not guaranteed.
Instead, the cash value available, as well as the potential for
a higher death benefit, depend on the performance of the
investment options selected.
Guarantees are subject to the claims-paying ability of the
issuing insurance company.
NOTE: Your licensed financial adviser will discuss with you how specific cash value
life insurance products may work for you in your particular situation, including the
product's features, benefits, risks, charges and expenses.
Role of Life Insurance in Retirement Planning 9