There are as many different types of life insurance on the market as there are unique needs. For some, a cash value life insurance policy is the best option. Like other types of life insurance, a cash value policy pays out to your beneficiaries upon your death. However, with this type of policy, a portion of your premium is diverted into a separate savings or investment account each month. Over time, this cash value accumulates, and you will earn interest on the cash in your account. You can leave the money in the account (and your beneficiaries will eventually receive it) or you can use it for other purposes throughout your lifetime. For example, you can use your cash value life insurance policy to… Take a withdrawal. You can withdraw money from your cash value life insurance account for any reason. For example, you might suffer a financial emergency, want to purchase a home, or need to cover a child’s college tuition. But keep in mind that your eventual death benefit will become smaller as a result of this withdrawal. Take out a loan. Your cash value life insurance policy can provide you with a loan. But if you die before the loan is repaid, plus interest, then your beneficiaries will receive a smaller payout of the death benefit. Pay your premiums. In the event that you suffer a financial hardship, there’s no need to let your life insurance policy lapse. You can use money in the cash value portion of the policy to continue paying the premiums. Sell your life insurance policy. Yes, you can actually sell your entire life insurance policy! This isn’t the right choice in every situation, of course, but it is one of the many possibilities with this type of life insurance. Surrender the policy. You can actually surrender your policy, and receive all of your cash value back (after fees are paid). A cash value life insurance policy isn’t the right choice for everyone, but it does provide the right mix of benefits for some situations. If this option appeals to you, contact our office to learn more about this versatile financial planning tool.

We often remind our readers that claiming Social Security benefits earlier than full retirement age can result in smaller checks for the rest of your life. Likewise, waiting beyond full retirement age can actually help you earn larger checks - up to 8 percent larger for each year you wait, up to age 70. So you might be wondering, “Is it ever a good idea to claim Social Security benefits early?” Actually, yes. In some cases it does make sense to go ahead and start receiving your checks before full retirement age. You want to pay down debts before beginning withdrawals from your retirement plan. You’ll need to live off of a combination of retirement savings, Social Security, and any other income that you’ve established for the rest of your life. But if you’re carrying significant debts into retirement, those can eat into your monthly budget. Claiming Social Security benefits now can help you pay down debts faster, and lower the amount that you eventually pay toward interest. You’ve already banked your 35 highest-earning years. Social Security payments are calculated based upon the 35 highest-earning years of your career. If you’ve already banked those years, you won’t increase your checks this way. However, claiming those checks before full retirement age will still mean that they are reduced a bit. You need to quit working. At some point, you might need to retire earlier than you had planned. Industry layoffs, health issues, and other factors can force a change of plans. The good news is that you can go ahead and start enjoying your retirement now. But you might simply need more funds in order to do so. In this case, you might claim Social Security early out of necessity. You’ve cut down to working part time. Some people choose to gradually cut back on work hours, and ease into retirement. If you’re only working part time, you might be able to claim Social Security benefits now. Some of your benefits will be withheld according to earnings, so let’s discuss this issue in depth in order to help you decide whether this choice is worth it. You’re in poor health or have been diagnosed with a terminal illness. In the event that you expect a shortened lifespan, it usually makes sense to go ahead and claim your Social Security benefits now. After all, checks stop when you pass away, unless you have survivors entitled to benefits. No one is relying upon your benefits. After you pass away, it is possible for a surviving spouse or disabled child to draw at least part of your scheduled benefits. You would ordinarily want to maximize this amount as much as possible in order to provide for them. But if no one else will be relying upon your checks, you might as well claim them now if it otherwise suits you to do so. Timing your claim for Social Security can be a complex issue, and certain other situations can be factored into this decision. Call us before you retire, so that we can help you decide upon the best time to file your claim.

We all know that risk is inherent in investing, with some types of investments being much more risky than others. And of course, a loss within your portfolio can mean a loss of income that you would have derived from those investments. That’s why retirees often feel concerned about their risk factors; no one wants to retire, suffer a loss, and then lack access to the funds needed to cover their standard of living. But all risks are not the same. “Sequencing risk” refers to the order in which your portfolio returns occur. Suffering a loss early in your retirement can impact your financial capabilities for the rest of your life, leaving you to perpetually play “catch up”. In some cases retirees even end up going back to work, or changing their lifestyles drastically (and feeling dissatisfied with retirement as a result). On the other hand, losses taken toward the end of your life might or might not carry a similar impact, depending upon when they occur and how significant they are. But generally speaking, if you’re going to suffer a loss, you don’t want to do it in the early years of your retirement. So, what do we do about sequencing risk? Analyze your portfolio in terms of predictability and safety, and assume that at some point there will indeed be market downturns. For those times, streams of revenue that are more stable can be depended upon to carry you until the market improves again. At the same time, we know that the riskier investments are sometimes the ones with greater potential for growth. You might not wish to eliminate those entirely, but your desire for growth should be balanced with how much you can stand to lose. Perhaps more importantly, you should consider when you can stand to lose it. These principles underscore what is always an important point in retirement planning: The planning isn’t finished when you retire! In fact, it’s just as important as ever. Continue meeting with us so that we can continually analyze your risk factors, retirement timing, lifestyle needs, and other factors that contribute to a satisfactory retirement. Then, together we will work to continually adjust your financial plan so that risks are balanced with your need for more stable income.

​This year has been a rollercoaster ride. COVID has dominated the headlines and impacted every aspect of our lives. It has shut down businesses, schools, and workplaces. It’s changed the way we interact and socialize. And of course, it has deeply impacted the economy and the financial markets. It can be hard in 2020 to find the good news, but there actually are a few economic developments for which we can be grateful. There’s also quite a bit of uncertainty ahead of [...]

Contributing to a 401(k) or IRA can offer you valuable opportunities to not only prepare for retirement, but also to earn valuable tax deductions. However, sticking to guidelines and tracking rule changes can be a bit of a chore. Each year the IRS evaluates things like eligibility and contribution requirements. We’ve reduced next year’s changes to simple terms for you, so you can get updated on what you need to know right now. Contribution limits will not change. The [...]

Most of us don’t appreciate the idea of our identities being reduced to a simple, three-digit number. But within the financial system, your credit score really does carry significant weight. Read on to learn why your credit score is so important, how it impacts your life, and what you can do about it. It’s not all about a mortgage. Most people associate credit scores with mortgages, and some have no idea of their score until they apply to purchase a home. Then, a steep learning [...]

The recovery in the financial markets hit some turbulence in October, as investors wrestled with anxiety about increasing COVID cases. However, a surge in gross domestic product (GDP) in the third quarter may signal that the economy is on the rebound.1 Through October 28, all major indexes had mostly recouped most of their losses from the COVID crash in March. However, all were down for the month of October. Below is each index’s return from October 1 through October 28: S [...]

If you haven’t already put together an estate plan, there is no time like the present. While deciding what to do with assets after your death can be an uncomfortable topic for many, it can be equally uncomfortable to envision your estate tied up in probate court for months or years. If you want your loved ones to inherit assets smoothly, without a lot of legal hassle and tax risk, an estate plan is an essential part of your overall long-term financial plans. Draft a will. Yes, [...]

For months, we’ve all waited anxiously to hear whether a second stimulus package will be passed by Congress. Not only is a stimulus payment beneficial to those missing income at this time; the payments can help to boost the economy overall. Yet, for the past several months Republicans and Democrats have remained quite far apart in their negotiations, preventing a stimulus bill from making it through both the House and Senate. Why can’t Congress pass a stimulus bill? The g [...]