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Retirement Planning

You can no longer rely just on Social Security and your employer-sponsored plans for retirement income. As you plan for a comfortable retirement it is important to include a variety of assets which will provide both taxable and tax-free income in retirement. Typical retirement accounts consisting of assets such as 401(k), mutual funds, CDs, and annuities will provide income that will be taxable in retirement. It is important to also include tax-free income sources such as life insurance and Roth IRAs in your retirement plans.

How to Retire Early

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Should You Ever Retire?

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Retirement Redefined

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Life Insurance as Retirement Income

Many clients do not know or appreciate that permanent life insurance can be used for more than death benefit protection. The cash value that accumulates in a permanent policy can be borrowed and does not need to be repaid*. Any outstanding loans on the policy are deducted prior to the death benefit being paid and the remaining value goes to their beneficiary(ies) income tax-free**.

All the possibilities permanent life insurance can provide their plan***:

  • Supplement Retirement Income
  • Pay for unexpected medical costs
  • Delay taking Social Security benefits
  • Spend down other retirement assets
  • Leave a legacy for heirs

*Accessing cash values may result in surrender fees and charges, may require additional premium payments to maintain coverage, and will reduce the death benefit and policy values.  Policy must not be a modified endowment contract (MEC) and withdrawals must not exceed cost basis. Partial withdrawals during the first 15 policy years are subject to additional rules and may be taxable. Policy must not be surrendered, lapsed or otherwise terminated during the insured's lifetime. 

**Loans are income tax free as long as policy is not a “modified endowment contract” (MEC) and policy must not be surrendered, lapsed, or otherwise terminated during the lifetime of the insured, and withdrawals must not exceed cost basis. Excess policy loans can result in termination of a policy.  A policy that lapses or is surrendered can potentially result in tax consequences. You should consult a qualified tax professional for tax advice on your own personal situation. 

***Life insurance permanent policies contain exclusions, limitations, reductions of benefits and terms for keeping them in force. 

Social Security

Social Security is the only guaranteed source of retirement income for most people, yet money is constantly being left on the table because people do not understand how to maximize their benefits. Everyone regardless of their economic status wants to maximize the amount of benefit that they receive from Social Security considering how much they have contributed throughout their lifetime. Incorporating a strategy to maximize these benefits should be an essential part of your overall retirement plan.

Diversifying Your Retirement Income Sources

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7 Ways for Business Owners to Take Charge of Retirement

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Myths VS Reality

MYTH: I have plenty of time to save.  

REALITY: A small amount saved every month makes a big difference.   

MYTH:  My company has a pension.   

REALITY:  Pension plans are disappearing. Number of Fortune 100 Companies offering traditional defined benefit plans: 1998 = 64, 2016=2.

Source: Towers Watson Report, 2016

MYTH:  Social Security will cover my expenses.  

REALITY: Social Security only provides 34% of the total income of those aged 65 and older.

Source: Social Security Administration Fast Facts & Figures About Social Security, 2016

MYTH:   Medicare takes care of medical expenses.

REALITY:  The average, healthy 65-year old couple will need $288,400 to pay for healthcare costs.

Healthcare costs rose in 2016 by the biggest amount in more than three decades: 2016 Retirement Healthcare Costs Data Report and U.S. Labor Department, 2016

MYTH:  I don’t need life insurance in my retirement plan.  

REALITY:  Permanent life insurance provides protection and possibilities. Life insurance can be a more tax-efficient way to leave money to heirs while still enjoying retirement.