Blog - SafeMoney.com

For IMMEDIATE support, call 877.GROW.SAFE (877.476.9723)             

Retirement Planning Blog

on 04 October, 2017

 guide to taxes on social security retirement benefits

When calculating individual benefits, the Social Security Administration draws on up to 35 years of personal earnings history. To receive Social Security benefits in the first place, you have to work at least 10 years. Therefore, it’s not that surprising that many people see their benefits as something they have earned.

Yet each year, Uncle Sam collects a share of people’s benefits through income taxes. You may have to pay taxes on as much as 50%-85% of your benefits, depending on how much income you report to the IRS.

in Annuity
on 03 October, 2017

 single or joint life annuity

Year after year, many Americans are finding it harder to provide for their spouses during retirement. Guaranteed pension payments have been disappearing as more companies move toward 401(k)s and other savings plans. And with the end of file-and-suspend in Social Security, numerous couples now can’t use the higher earner’s wage record for greater benefit payouts.

This brings up the question of survivorship: How can retirees ensure their spouses receive sufficient income for current and future needs? Many couples have turned to joint life annuities as a long-term solution.

However, that doesn’t mean that a joint life annuity is right for everyone. In some cases, having separate annuities can be more prudent. Or it may be appropriate to seek retirement income strategies with other means. But no matter what, whether someone should choose a joint life annuity or a few single life annuities will vary on an individual basis. It depends on the potential buyer’s needs, goals, and situation, among other factors.

If you are considering a joint or single annuity, here are some pointers to help you think about your options.  

on 28 September, 2017

how debt is crippling retirement goals

According to MagnifyMoney, people are carrying more than goal checklists into retirement. A recent analysis by them looked at data from the University of Michigan Retirement Research Center (MRRC) Health and Retirement Study. Their results found that more Americans are shouldering debt in their 50s and over.

It’s a serious finding, given that Americans have named mortgages and other debts among their top five money concerns. In the study, MRRC researchers survey over 20,000 Americans aged 50+ on many topics of financial well-being. This publication showed survey results from 2014.

MagnifyMoney found a number of debt trends that could undermine, or even cripple, the retirement goals of numerous Americans. Let’s look at how debt is affecting older Americans and their post-work lives.

on 27 September, 2017

safe money investments

As far as financial security goes, when thinking of retirement, it’s important to consider the safety of your financial portfolio.

Do you have reliable income streams in place for retirement, whether for a set period or life? Is there enough liquidity in your assets to allow you to retire comfortably? Is enough of your money safe and put in secure, dependable places? Do you have an appropriate financial strategy for combating the the impact of inflation, high-ticket expenses like long-term care, and other costly retirement risks?

All of this brings us to a discussion on building a dependable safety net and how to make sure that you can answer these questions with confidence.

on 25 September, 2017

term life insurance vs whole life insurance vs indexed universal life insurance

When shopping around for a life insurance policy, you have many choices. From monthly low-cost term insurance, to more expensive but long-term coverage benefits of whole life and universal life insurance, there’s a wide landscape of options.

As you consider different selections, it’s important to understand how these types of insurance differ from another. Among permanent life insurance, two widely-purchased options are whole life insurance and indexed universal life insurance.

While term life insurance is the most straightforward, it covers you only for a short-term period. Conversely, whole life and indexed universal life policies give lifelong coverage, so long as a policy remains active.

But they are more complex, tend to cost more than term coverage, and can be better-suited for long-term objectives. With that said, the cash value component of permanent insurance may be attractive for a number of reasons, including for efficient legacy planning, tax-advantaged wealth building, and tax-deferred retirement saving.

If you’re exploring term life insurance versus whole life insurance and indexed universal life insurance, it’s prudent to be diligent. You will want to research and consider your options carefully, and to help you get started, here's a quick guide on the differences between these life insurance types.

on 19 September, 2017

difference between traditional and roth ira

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.

in Annuity
on 18 September, 2017

can you buy an annuity at any age

Yes, it’s possible to buy an annuity at nearly any age. Usually there are few or no lower age limits. But annuity purchases do have older age limits. These restrictions vary based on annuity type, product, and individual contract rules.

Technically, you may be able to buy an annuity for even a child. However, most annuity purchases are with retirement money, especially IRA money. So, annuities tend to be more appropriate for people of near-retirement and retirement age. You will also see retirement savers in their 30s and 40s purchasing annuities for principal protection, safe growth, or tax-deferred accumulation in another place alongside retirement accounts. Overall, annuity buyers tend to range from ages 40-80, depending on their needs and goals.  

In the 2013 Gallup Survey of Owners of Individual Annuity Contracts, the average age for first-time annuity buyers was 51. The survey found the median age of first-time contract purchasers to be 52.

Since age limits can vary among annuity types, let’s take a look at those now.

on 14 September, 2017

does spending increase in retirement

Retirement can bring up a number of concerns, from lifestyle and health to social activeness. There’s also the issue of money. Many people worry about retirement spending, how much they need to save, and how this may affect their current money habits.

In a survey by Allianz Life, nearly one-third of Americans said they are “panicked” or “very worried” about cost-of-living increases and their effects on their retirement lifestyle. 6 in 10, or 64%, said they don’t have a plan to combat rising costs of living in retirement.

From the standpoint of pre-retirement preparation, this brings up an important point: Does spending tend to increase in retirement? Answering this question may play into decisions of managing expenses, controlling spending, and saving for retirement today.

Compared to pre-retirement, many Americans may expect their retirement spending to go down. Having fewer or no commutes to work, children moving out, paying off debts such as a mortgage, not having to deal with a wardrobe for work... these are just a few areas in which expenses can fall.

But many retirees may even see their expenses go up. Healthcare and personal care costs tend to increase sharply. Housing costs, such as home repairs or a roof replacement, may arise if you continue to live in the same place for years. Then there’s time – simply much more time for people to do things and spend money.

So, while there’s no ballpark answer, it’s important to have some idea of potential retirement spending. Here’s a quick look at some data findings and other helpful insights.

on 12 September, 2017

do you need an emergency fund in retirement

Time and again, we are told of the importance of having an emergency fund. It makes sense, especially for retirement. After all, retirees are likely to have unexpected costs creep up, just like everyone else does. But according to a BankRate survey, even a small unexpected expense could be a struggle for many households.   

In the survey, nearly 60% didn’t have enough savings to pay for emergency expenses. Almost half (45%) said they or immediate family had incurred a major emergency expense in the last 12 months. Among high-income households and college graduates, nearly half lacked enough savings to handle emergency costs.

While emergency expenses can affect anyone, they may create harmful setbacks for retired households. Many retirees live on a fixed income. Without the fallback of healthy earned income, like that in the working years, they could find unexpected expenses to be disruptive. All of this underscores the practical wisdom of having financial cushioning for emergencies.

So, what’s a target amount to have in an emergency fund? And what are some ways you can build up emergency reserves? Here’s a quick look at some strategies.

on 07 September, 2017

what is a mec

Although it’s been around for nearly 30 years, a MEC, or a modified endowment contract, can still be confusing. Let’s straighten it out. A modified endowment contract is a unique type of cash value life insurance. A life insurance policy becomes a MEC when the policy has been funded more than federal tax laws permit.

Upon changeover, a MEC loses some of the favorable tax treatment it had as cash value life insurance. For tax purposes it’s now treated like a non-qualified annuity. While the cash value does stay intact and grow tax-deferred, you will be taxed on the cash value growth upon taking withdrawals.

Depending on state laws, cash value withdrawals may be subject to state income tax, along with the federal income tax you must pay. If taken before age 59.5, an early withdrawal penalty of 10% may apply, as well.

Because of these potential tax implications, it’s important to understand MECs, their features, and their potential consequences. Here’s a look at a MEC and how it may affect a life insurance policy.

Proud Member

assessbest logo footer

AAPA LogoLIFE HAPPENSSOFA Logo1

Newsletter Signup

Contact Info

Safe Money Broadcasting Home no glow img

Safe Money Broadcasting LLC.
1107 Key Plaza #450
Key West FL, 33040-4077
1.877.476.9723
(877.GROW.SAFE)
info@safemoney.com

;