Can Life Insurance Help You Retire? Protecting You Beyond Market Risk

By
Gonzalo de Leon Plata
September 27, 2017
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When you put the words, “retirement,” “investments” and “risk” in the same sentence, most of us will automatically think about market risk, you know, the possibility for an investor to experience losses due to overall performance of financial markets1.  According to the 2014 Annual Retirement Confidence survey, 88% of retirees are worried about maintaining the same standard of living.  While Market Risk is a very real reason to worry, there are other risks that may throw a wrench into your financial plan. This time we will discuss the possible need for Advance medical care, how much it could cost, and how to be ready for it.

The Risk: There is a 50% chance that any of us will need some form of Advance Medical Care2.  In other words you or your spouse WILL need Advance Medical Care. The risks are so high and yet most investors don’t prepare of it.

The Cost: Know the potential damage. The numbers don’t lie. The average cost of long term care in the US for Nursing Home Care for a Semi -Private room is a whopping $225 per day3.  The average stay in a Nursing home is 892 days.  For easy math you are looking at a $200,000+ cost above and beyond your living expenses.

The Solution: Use small dollars to cover big expenses. Get life insurance with living benefits.

One solution that is becoming more and more popular is getting a life insurance plan that can be used to cover Advanced Medical Care. Some insurance companies offer something called Living Benefits Riders. These riders allow you to “advance” a portion of your death benefit if certain conditions are met, such as Terminal illness, problems with the Activities of Daily Living  and life threatening conditions.

Building a Financial Plan that can withstand the risks of life is complicated.  Make sure you hire a Financial Coach to help you prepare for the unknown. Thinking outside the box may be a way to protect your golden years.

[1] www.investopedia.com/terms/m/marketrisk.asp

[2] http://www.aaltci.org/long-term-care-insurance/learning-center/probability-long-term-care.php

[3] www.genworth.com/about-us/industry-expertise/cost-of-care.html#

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By
Jeff Motske, CFP®
November 9, 2018

I personally believe that one of the advantages of doing well financially is to be able to “give back” to causes that are near and dear to your heart. However, when we feel passionate about a cause, the emotional pull can tempt us to financially overextend ourselves. With some forethought, though, you can utilize creative measures that allow you to be generous without breaking the bank.

Your Time

Before you pull out your checkbook, perhaps consider getting your hands a little dirty. Whether it’s cleaning trash from the beach, working at a food pantry or assembling packages for our troops stationed far and wide, nonprofit organizations are powered by people. Even the simplest volunteer work can make a significant impact on an organization in need.

Your Talent

Some of us have specialized talents and skills that can be of value to a charitable organization. If you have an accounting background, perhaps you can offer your services to a nonprofit close to your heart. If you run a landscaping company, you can choose to donate your services to your alma mater. Such specialized services can be of great value to an organization and not make much of a dent in your personal finances.

Your Treasure

Just as there are different types of non-profit or charitable organizations, there are also different ways to financially contribute to them. Many of us are familiar with direct contributions, donations that may qualify to be deducted from your income tax. You could also contribute via donor-advised funds, which allows you to make charitable contributions to specially designated funds at a specific charity, receive a tax benefit from the contribution and recommend grants to be funded by the charitable fund account. Another option is to donate appreciated stock or appreciated real estate, which provides a significant tax deduction. Some choose to leave a charitable donation after they pass via a trust  These gifts in trust can be tricky, so it is advisable to meet with a professional to avoid any issues. Additionally, there are those who prefer to utilize charitable gift annuities, which allows an individual to receive a fixed income after donating money, securities or real estate.

There are as many worthy charitable organizations as there are stars in the sky. When your funds won’t allow you to do more, there are always other ways to “give”. Doing so thoughtfully and creatively can ensure that everyone benefits.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

  1. https://www.nptrust.org/what-is-a-donor-advised-fund
By
Mike Loo, MBA
July 20, 2018

Over the course of hundreds of conversations with clients, I’ve found that quite a few them have wrestled with the idea of whether they should go back to school for an advanced degree. As their advisor, I am commonly asked if returning to school would be financially beneficial. The risk/return analysis is not always cut-and-dried in this situation. Investing X amount of dollars in a degree program does not always result in an equal or higher return in the future.

The True Value Of Education

Education is about more than just the money. After a recent conversation with a client, I had the realization that while I don’t need an MBA for my job as a financial advisor, the MBA experience itself shaped and molded me to become the advisor I am today. While I did take numerous finance classes to enhance my knowledge and quantitative skills, the greatest value I gained from earning an MBA came from improving qualitative skills, such as working with people, networking, effective communication, and time management. These are skills that I use daily in my current role.

Every experience we go through, especially those that push us out of our comfort zone and require plenty of work and time, leads to personal growth. Had I not gone through the MBA program at USC’s Marshall School of Business, I might not have developed the work ethic required to succeed as a financial advisor, and I could have ended up on a completely different career path altogether.

My Pre-MBA Self

Before entering the MBA program, I had a passion for the financial services industry, but like most college grads, I wasn’t sure how that would translate into a career. I didn’t have a clear direction for my future. I was interested in becoming an advisor but knew that it would be fairly tough to advise people on what to do with their finances when I hadn’t gone through many life experiences myself.

I had always loved the idea of making money and becoming more efficient with what I had, but I was young and dumb (and willing to admit that)! I fell into the cultural mindset of wanting to work typical business hours, earn a large salary, and enjoy life. In essence, I wanted the rewards but didn’t want to do the work involved to achieve those rewards. In my naive way of thinking, an MBA seemed to be the simplest path to achieve this end result. I can tell you that I was so wrong in this assumption!

What I Gained from My MBA

Networking Skills: USC is known for networking. Everything I heard about business school prior to attending was that the most important takeaway from the experience is to network, network, network. Unfortunately, my pre-MBA self was uncomfortable talking with people I didn’t know. I didn’t like to take the initiative to introduce myself and sometimes avoided conversing with people unless I was introduced first. As time went on and I experienced the pressure of competing against my peers and other highly qualified candidates for the same jobs, I was forced to rise to the challenge and become comfortable with being uncomfortable.

This skill alone has helped me immensely in my career when it comes to collaborating with a client’s other professionals, such as an estate attorney or CPA. In order to do a thorough job for a client, it’s often necessary to work with their other professionals to make sure we’re on the same page. In many cases, I’ve reached out to a client’s CPA to make sure they had my contact information so that if questions arise about the client’s investments, they call me rather than my client.

This skill has also helped me in reaching out to client referrals or prospective clients because I’ve found that people often want help with their financial planning, but they might not tell others or take the first step.

Effective Time And Task Management: During my time at USC, multitasking became the norm. If I wanted to effectively balance school, attend recruiting events, revise my resume, participate in mock job interviews, network for potential jobs, and somehow find time for a personal life, I had to become better with time management.

My job today is multi-faceted and includes juggling many tasks, such as answering client questions, servicing and monitoring their accounts, staying on top of changes in the industry, and dealing with changes life throws my clients’ way. Knowing that I was able to handle my heavy load in the past gives me confidence that I can prioritize my work today. Most importantly, I’ve come to realize that with all of these moving parts, it’s impossible to be rigid in only working business hours (again, something I aspired to when I was young and dumb), because not everyone is available from 8 am to 5 pm. Instead, I’ve become flexible with my schedule and instituted taking a day off during the week so that I can occasionally meet with clients on the weekend or do a phone call later in the evenings.

Is An Advanced Degree Right For You?

In my case, obtaining an advanced degree was one of my best decisions. It’s difficult to imagine doing anything else with my life and I am fortunate that I went down this path. If you or someone you know is trying to make this decision, I would love to give you some insight and help you look at the situation from an objective perspective. Or, if you would like to network and see if we could work together, call my office at (949) 221-8105 x 2128, or email me at michael.loo@lpl.com. I’d love to see you thriving in your life!

Get Started on Your Financial Life Plan Today