No one really wants to think about life insurance. But if someone depends on you financially, it’s a topic you shouldn’t avoid. Are any of these reasons stopping you from getting the life insurance coverage you need? If so, read on!
1. My family can rely on loans or other family members.
We know we can rely on our families for support as we navigate life. However, if you were to die, your family’s world would shift on its axis—emotionally and financially. A time of grief is not the time to crowdsource funeral funds or make phone calls for money every month when bills come due. Life insurance means there can be an affordable solution in place so that doesn’t need to happen.
2. Money is tight. I just can’t afford life insurance.
Bills, rent or mortgage, car payments, childcare, food, gas … and the list grows as your family does. So what would happen to them financially if you died? If you’re gone, so is your income, but their bills and expenses will stay the same. If money is tight, you can’t afford not to have life insurance. It picks up the financial burden for your family when you are no longer there to do it.
3. Life insurance will be a free ride for my kids.
Your parents taught you hard work, and it’s what you’re teaching your children. But life insurance isn’t about leaving your kids a financial windfall. It’s about practicing—and teaching—the principles of personal financial responsibility. Preparing for the future with life insurance is a lesson in goal-setting, budgeting and discipline that ensures your loved ones will be OK financially, which is a valuable lesson to pass on.
Don’t let these myths stand in the way of getting life insurance—or more of it.
Planning for retirement amid changing market dynamics can be stressful, especially as retirement age approaches. Fortunately, there are a myriad of ways to prepare for it, even if you plan to retire early.
OPTIMIZE YOUR RETIREMENT INCOME
One of our top tips is to optimize your retirement income by setting yourself up with a diversified portfolio that offers a solid return. If you are in your twenties, there is a big opportunity to let compound interest work its magic. If you are in your thirties or forties, compound interest may not be as lucrative for you, but there are still plenty of ways to maximize your returns.
Here are some of the different options available to help plan for retirement:
SEP IRA – a self-employed retirement plan known as the Simplified Employee Pension (SEP) IRA requires employers to contribute 100% of the accounts' funds and provide equal benefits to all eligible employees.
401(k) – An individual retirement plan for which contributions are not tax-deductible, but withdrawals in retirement are tax-free.
Roth IRA – An individual retirement plan for which contributions are not tax-deductible, but withdrawals in retirement are tax-free.
Each option has its differences, so it is important to work with an advisor to identify which is best suited to your situation and your goals. There’s a lot that can go into your Life Plan and we are here to help.
Senior couple enjoying happy retirement lifestyle
DEVELOP A BUDGET AND SAVINGS PLAN
Budgeting can make a world of difference. If you haven’t already, establish an emergency fund. This will give you peace of mind and will help pay for any unexpected expenses that may arise. Once you’ve set that money aside, you can plan your monthly expenses, retirement contributions and more with the rest of the income you have.
As you develop this budget and savings plan to get you to your retirement goals, ask yourself the following questions:
What quality of life do I want to experience in retirement?
What medical expenses do I anticipate?
Do I plan on working during retirement?
Will I have a flow of income during retirement?
These are all important considerations and will help you develop an actionable plan to achieve the retirement lifestyle you dream of.
DETERMINE YOUR TAX BRACKET AND MINIMIZE YOUR TAXES
In retirement, taxes can eat into your available income, leaving you with less to live on. It's important to remember that taxes don't stop once you're retired. Our financial advisors are here to help guide you take steps throughout your working life to minimize your IRS obligations now and later.
The same basic tax brackets that apply to working taxpayers also apply to retirees. Determining your tax bracket in retirement is just like determining your tax bracket while you’re working – which is determined by your filing status and taxable income (income minus deductions).
Common sources of retirement income that are taxable include:
Distributions from traditional 401(k)s and IRAs
Investment income
A portion of your Social Security benefits (in some situations)
Some pension income
Income from work (full or part time)
INVEST TO ADD ADDITIONAL CASH FLOW IN RETIREMENT
If building wealth is your goal, the stock market or other investment strategies are common options. Investments such as annuities, real estate investment trusts (REITs) and income-producing equities can offer additional retirement income beyond Social Security, a pension, savings and other investments.
DETERMINE THE AMOUNT OF RISK THAT IS APPROPRIATE FOR YOU
It is important to keep in mind that all investments come with risk. If you are young, you can probably tolerate more risk. If you are in your thirties or forties, however, you might benefit from taking a lower risk approach. This is because people in their twenties have more time to correct and mitigate losses. A financial advisor can help you decide if you would like to take a low-risk, slow-and-steady approach, or guide you through a high-risk approach with the potential of yielding higher returns.
PAY OFF YOUR DEBTS
It’s important to pay off credit card debt and student loans as soon as possible. Systematically chipping away at debt now, can have a significant impact on your future debts and purchasing power.
A mortgage can be looked at as both a good debt and a bad debt, depending on your goals. Many people choose to rent a home to avoid being tied to a mortgage, and others use that property as a cash-positive asset. Depending on your goals, it’s important to discuss each of these approaches with a financial advisor so they can help guide you through something that will ultimately benefit you and your family.
MAXIMIZE YOUR SOCIAL SECURITY BENEFITS
Navigating Social Security income can be complicated, but there are several ways to maximize your social security benefits, including:
Work for 35 years or more
Earn as much as you can right up until full retirement age (or past it)
If you can, wait until you are 70 years old to claim – this can increase your benefit by 8% a year beyond your full retirement age
The goal is to maximize the income you will receive from Social Security, but the answer for you will depend on your age, current income, marital status, spouse’s income, and the age disparity between you and your spouse. With all the complexities to Social Security planning, there is no substitute for meeting with a trusted financial advisor so you can best navigate your life in retirement.
CONSIDER ESTABLISHING STREAMS OF PASSIVE INCOME
It's important to remember that there are multiple ways to set yourself up for prosperity during your golden years.
These include:
Investing in real estate
Investing in the stock market
Starting an ecommerce business
Writing books
Earning royalties of any kind
Investing in collectibles
Investing in gold and silver
In short, it's best to invest in as many financial assets as you possibly can in order to establish streams of passive income so that you are not solely reliant on one source for your earnings and returns.
ESTABLISH MULTIPLE STREAMS OF INCOME
You may want to consider continuing to work during retirement. This provides many people with a sense of satisfaction and purpose, AND you will be able to keep your benefits.
The earlier you establish multiple sources of income the better. Ideally, at least a few of these would be passive.
You deserve to be comfortable during retirement, and planning for this phase of life right now will likely help you achieve your goals, perhaps even surpass them. You have worked hard for most of your years around the sun, and you deserve to relax and enjoy every moment on your own terms during your golden years.
Why Choose Trilogy Financial
Planning your retirement strategy is important but not something to stress over. If you’ve already started saving, one of our certified financial planners can help you optimize your savings, investing and risk approach so you can live the retirement life you dream. However, if you haven’t started planning for retirement yet, there’s no better day than today!
Our Advisors will work with you to develop a deeper understanding of your alternatives, pinpoint practical needs and make plans for the care you and your family deserve. Please contact us to start your retirement planning today.
Insurance is a necessary component to creating a financial plan that works well for you, your family, and your long-term goals. It can take just one illness, one job loss, or one car accident to turn your world upside down and crumble your financial plan.
If you have the proper insurance in place from the start, however, you can weather these life-changing moments and keep your goals and dreams on the right trajectory.
Auto Insurance – Auto insurance is a must and not just because the law requires that you carry it. Auto insurance can protect your assets in the case of an accident and make sure that not only can you shoulder liability in an accident but you can also get back on the road with a car that will carry you safely to and from work. Full coverage is especially important if you owe money on your vehicle. No one wants to keep making car payments on a vehicle that was totaled in an accident.
Homeowners or Renters Insurance – You have worked hard to provide for your family and homeowners and renters insurance can protect you and get you back to where you were in the case of a natural disaster or a home break-in. Depending on where you live, you have seen the damage that can be done by tornadoes, earthquakes, floods, and more. Be sure to check that your policy covers the weather most likely to wreak havoc in your neck of the woods.
Life Insurance – Life insurance is absolutely necessary for any individual who supports another individual. So, if you are married or you have dependents, then you definitely want to make sure that their needs are covered if you meet an untimely death. Think about what life would be like for your dependents without your income and choose the amount of life insurance that you need accordingly.
Health Insurance – Health insurance is such a smart choice. Medical costs have skyrocketed and long-term illness or serious injury can drain your savings fast. Having health insurance goes a long way in keeping your household doing well financially in the midst of a health crisis. If you do not receive health insurance through your employer, take the time to talk to your insurance agent about it.
Disability Insurance – If you work you may already be getting this type of insurance through your employer. Look at the specific plan and if you are not getting enough coverage through your workplace then you may want to consider getting some through your agent or broker.
Disability insurance is important because it keeps your household operating during a long absence from work due to illness or injury.
Now is the time to make sure all of your “insurance ducks” are in a row. Catastrophe may never hit, but if it does, you want to make sure that you and your family are covered.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
