Do you have a current annuity or insurance policy that doesn’t fit your needs well? If you are on the lookout for a new policy, a 1035 exchange may be a worthwhile option.
A 1035 exchange is a section of the U.S. tax code that lets policyholders replace an existing annuity or insurance policy with a new policy – and with no tax consequences. This tax-free exchange may be used for life insurance policies, modified endowment contracts (MECs for short), and non-qualified annuities toward a new policy.
With new waves of innovation available – such as living benefits for terminal illnesses or long-term care situations – you might wish to explore new options. The good news is you don’t have to keep your current policy forever.
Let’s take a closer look at how a 1035 exchange may and may not benefit a policyholder looking for new annuity or insurance choices. Read More
Editor’s Note: This is the last feature in a fourt-part series on financial education for April, which is National Financial Literacy Month. To see the first part of this series, click here.
As Benjamin Franklin is credited with saying, “An investment in knowledge pays the best interest.” But actually investing in gaining more financial knowledge is an activity that many Americans don’t seem to do.
While studies suggest that lots of people understand the value of financial literacy, the truth is many things compete for our time. When so much is going on, it’s easy to put learning time for money matters on the back-burner. Even so, what we know drives our money behaviors and decisions, and so a gap in knowledge can hit home in many ways.
This is a complex problem for several reasons. For instance, in one survey, GoBankingRates found that over half of Americans have less than $1,000 in savings. In another study by TD Ameritrade, 96% of Americans knew what they paid for streaming media services like Netflix, but only 27% knew what they paid in 401(k) plan fees.
In fact, the majority of investors in the TD Ameritrade survey thought they paid no employer plan fees, didn’t know if their plans had fees, or didn’t know how to determine the fees. Other studies have also captured similar data with investors and their familarity with their employer retirement plans.
All of this adds up to an ongoing cycle of money headaches, mistakes, and disappointments for many households. Read More
Editor’s Note: This is the third part of a four-part series on financial literacy in the United States. You can find Part 1 of the series here. Stay tuned for more helpful articles on how you can reach the retirement you have worked hard to attain.
Like other working-age investors, you may have a 401(k) account — or another employer retirement plan. In anticipation of the future, you probably are socking away money for retirement. And if you are lucky, your employer is even contributing to help your nest egg grow even more.
But, with April being National Financial Literacy Month, now is a good time to be honest with ourselves. Many working-age investors don’t fully know what their investments are. Various studies, like the “Wellness in the Workplace” survey by KRC Research, have shown that, in many cases, the majority of working investors don’t understand their retirement plan make-up.
So, take a moment to ask yourself about whether everything makes sense to you. It’s okay to admit not being fluent in your 401(k) – or even retirement in general – because money matters are hard enough for many of us. And when it comes to retirement issues, you aren’t alone.
A comprehensive barometer of U.S. adults’ readiness to make sound financial decisions is found in the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) from TIAA Institute and the Global Financial Literacy Excellence Center. This report examines financial literacy across eight common activities: earning, spending, saving, investing, borrowing, insuring, understanding risk, and gathering information.
And the findings aren’t great. Read More
Editor’s Note: This is the first part of a four-part series on financial literacy in the United States. You can find Part 1 of the series here. Stay tuned for more helpful articles on how you can reach the retirement you have worked hard to attain.
If financial matters concern you, you aren’t alone.
A recent survey conducted by Harris Poll on behalf of Purchasing Power, reveals that 87% of survey participants who are employed full-time (or have a spouse employed full-time) are at least somewhat stressed about their current finances. And 25% of the people feeling the heat over money matters measure their stress level as either “quite a bit” or “a great deal” of stress.
So what’s worrying everyone? Plenty. Household bills are the major cause of financial stress among the 900 participants in the Purchasing Power survey. Read More
Editor’s Note: This is the first part of a four-part series on financial literacy in the United States. Stay tuned for more helpful articles on how you can reach the retirement you have worked hard to attain.
Now that April is here, it’s National Financial Literacy Month. This is a good time to gauge our knowledge and comfort with money matters. Why? Well, because financial literacy is something that affects all of us.
In its research, the FINRA Foundation has found that financial literacy is “strongly correlated with behavior that is indicative of financial capability.” People with high literacy are more likely to plan for retirement, have an emergency fund, and avoid expensive credit card debt. In turn, those behaviors can lead to quality-of-life outcomes, including more financial wellness, more confidence, and more peace of mind.
But in the same breath, studies show a gap between what Americans say they know and how they actually rank in their financial knowledge base. A recent study brief by the FINRA Foundation drives it home.
In the study, nearly two-thirds of Americans failed a quiz on basic financial concepts. Read More
The holidays are approaching, and everyone is stepping into high gear. From Thanksgiving dinners and seasonal gift shopping to family get-togethers, these are busy but joy-filled times. Aside from the festivity, fellowship, and merriment, though, it can also be financially stressful for many households.
The holiday season brings more pressure to spend, and this can put strain on retirees, many of whom live on a fixed income. For lots of Americans, there’s also the issue of personal debt. Having the pressure of growing debt loads, many people feel the impact of debt on their retirement goals, not to mention other objectives. And excessive holiday spending can be partly to blame. A survey by NerdWallet found that 24% of shoppers overspent last year, while 27% made no budget at all.
The good news is with the right steps, financial wellness is within reach. If you are in your 50s or 60s, it’s prudent to start taking steps to set goals, plan for the future, avoid financial missteps, and make changes so your money works for you.
Here are some steps to get your financial house in order for the year-end and for greater financial confidence in the future. Read More
As the holiday festivities roll around, many of us are thinking about the new upcoming year. What steps can we take to start off with a clean slate in the new year?
The top priority is getting our financial house in order, but what can we do to accomplish that?
What can help is having a year-end financial review and creating a well-balanced plan for the future, preferably with a financial professional. Not only will it help you start off strong, but it also will bring clarity and precision to your financial outlook.
Of course, this proactive approach doesn’t bring just short-term benefit. A year-end review and wrap-up of remaining plans can help you prepare well for long-term retirement goals and overall financial security.
Read on for some quick tips to consider during your annual review and planning process. Read More
There are many types of IRAs. But two of the most common are the traditional IRA and the Roth IRA. The type of account you select can have a significant impact on your long-term household savings.
The biggest difference between a traditional IRA and Roth IRA is their classifications in the IRS tax code. A traditional IRA holds the benefit of tax deferral, which means that money going into it has pre-tax status. On the other hand, since a Roth IRA is funded with after-tax dollars, it gives the benefit of potentially tax-free distributions. On top of these differences, both types of accounts have different rules for required minimum distributions.
Because of this difference and others, it’s important to understand the fundamentals behind these two plans. This brief discussion will help you understand their distinctions, their eligibility criteria, and other important factors. Let’s get into it. Read More
Brent Meyer, President and Founder of SafeMoney.com and a wealth brokerage owner, recently joined Protect Wealth Academy (PWA) for an insightful discussion. PWA educates investors on asset protection, tax minimization, and wealth creation. With over 23 years in the financial services industry, Meyer shared his expertise on annuities, life insurance, and retirement planning strategies. He emphasized the importance of planning for a long retirement and offered effective strategies for growth, income, and protection using guaranteed insurance contracts.
Why SafeMoney.com Was Started:
Meyer noticed a gap in accessible, practical retirement planning information.
SafeMoney.com aims to provide unbiased financial education and clarity for consumers.
Common Retirement Myths:
Many believe they are retirement
-ready due to disciplined savings, but longevity risk and inflation can impact their plans.
Fee-based planning can also pose conflicts of interest, as advisors might prioritize fee-generating accounts.
Annuities and Their Role:
Annuities are often misunderstood; they are not investments but transfer-of-risk strategies.
They provide contractual guarantees and should be part of the retirement portfolio foundation.
Effective Wealth Creation Strategies:
Fixed index annuities offer tax-deferred growth without contribution limits.
Cash value life insurance policies provide tax-free income and are useful for minimizing taxes in retirement.
Understanding Life Insurance:
Indexed universal life insurance offers growth potential linked to market indices with protective features like caps and floors.
Common Estate Planning Mistakes:
Procrastination and not considering the impact of taxes can undermine estate plans.
Life insurance can provide liquidity and cover estate taxes, ensuring beneficiaries receive the full estate value.
Preparing for Long-Term Care:
With high costs for nursing homes and in-home care, early preparation is essential.
Life insurance with living benefits can help cover care costs without depleting retirement savings.
Future of Retirement Planning:
Economic conditions and longer life expectancies may drive a shift toward annuities for guaranteed lifetime income.
For more insights and strategies on retirement planning, visit SafeMoney.com and explore their resources.
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Note: This is the fourth part of a month-long series on financial awareness in the U.S., and how investors are planning – or not preparing – for retirement. Here are some important takeaways that are keeping Americans from financial security and peace of mind.
For the first time in a long while, Americans are feeling more stressed than ever. If surveys are any indicator, money concerns are a big part of it. In fact, more Americans are losing sleep over money issues than before the Great Recession.
According to CreditCards.com, 65% of Americans report having insomnia over money issues – a 9-point jump from 56% in 2007. And what accounts for these new, high levels of stress? Here’s a quick look at the sleep killers for Americans in 2017. Read More
