Find planning for retirement a little daunting — and perhaps frustrating? To help boil things down, we are bringing experts from all corners of the retirement and insurance spaces to give you high-level insights for your financial confidence and security. In this SafeMoney.com Spotlight Series interview, Kim O’Brien, Chief Executive Officer of the Federation of Americans for Consumer Choice (FACC), joins us to talk about retirement trends, annuities, life insurance, long-term care, and evolving regulations affecting insurance products.
This is a wide-ranging interview talking about all of the choices available to you, past and upcoming innovations in the annuity and insurance markets, how satisfied that annuity and insurance customers truly are with their policies, how you can build a truly well-diversified plan to handle today’s hard-to-predict risks, and much more!
You may have heard of an “annuity bonus” if you have ever looked at annuities before. Bonuses are just one annuity feature, but are they warranted? Are these annuity bonuses a good thing in general, or are they more of a good fit in certain situations?
In this article, we will go over the basics of an annuity bonus, what it involves, what situations in which you might consider one, and the pros and cons of an annuity bonus. In general, annuities that come with a bonus are called “bonus annuities.”
You can use some simple formulas to calculate how much a given investment might grow over time, such as the Rule of 72. This rule can show you how long it will take for your money to double at a certain rate of return, but it also assumes the growth isn’t taxed.
What about estimating how long it will take for an investment to grow but when the growth is taxable? This is where simple calculations such as the Rule of 108 can come in handy. The Rule of 108 is similar to the Rule of 72 insofar as it lets you see how quickly your taxable investment might double in value. It also assumes a federal income tax rate of 32% that applies to the growth annually.
In this article, we will go more over the Rule of 108, how to use it to get an idea of how it long it would take for your taxable money to grow, some pros and cons, and how you can get the most out of it.
If you are like millions of other workers in America, you have probably saved for retirement in an IRA, a 401(k) plan, or another tax-deferred account. The chances are also high that you worry about running out of money in retirement. Fortunately, you can put some of that fear to rest by having an annuity as part of your overall retirement strategy. Annuities are fundamentally unique savings vehicles because they can pay you a guaranteed, set stream of income that will last as long as you do.
Annuities can supplement your Social Security payments by providing additional guaranteed income that will remain steady regardless of how the markets perform. They can also help ensure that you have enough money coming in every month to cover all your living expenses.
In this article, we will go over more of the steps of how to roll over an IRA or 401(k) into an annuity. None of the steps are especially complex, but they must be done properly to ensure no tax consequences from the rollover (unless you are converting your annuity to a Roth account). To start off, let’s talk more about why someone might want to move some of their retirement money into an annuity.
Chances are you have heard of long-term care, but how does it come into play in retirement? What are the chances that you will need long-term care? How much will it cost? It’s important to consider these questions as you think about how you will manage healthcare expenses in retirement.
If your goal is to have a financially secure lifestyle, then you may want to treat the odds of you (or your spouse) needing long-term care as a fact. As we will see later on, the odds of some long-term care needs go up as people progress in their retirement years. This possibility can derail even the best-laid retirement plan if it isn’t adequately accounted for in retirement income planning projections. Nor will Medicare pay for many long-term care services and supports, as is often believed.
In this article, we will go over the basics of long-term care, how much it can cost you, and some strategies that can give some financial relief so that long-term care doesn’t drain your retirement savings.
Whether you already have a retirement nest egg or are considering an investment, the Rule of 72 can give you some idea of how fast your money will grow over time. Many financial advisors use this rule to help their clients understand the returns that they may get from a certain investment.
If you are looking for a quick, practical way to see how long it can take for your money to double, the Rule of 72 is highly useful. However, just as with other rules of thumb in finance, it’s only a back-of-envelope formula.
There are some limits to the Rule of 72, and it also assumes that you will get a certain average rate of return each year. Of course, financial markets don’t work that way, so any investment won’t have the same growth rate each year. For those near or in retirement, there is also the potential hazard of sequence of returns risk having an impact on how much money they might have for lifelong retirement income.
In this article, we will go over what the Rule of 72 is, how it works, and how you can put it to good use in your retirement planning and investments in general.
If your employer offers a guaranteed pension plan, then you may wonder whether it’s possible for you to retire early and still get your full pension benefits. Many pension plans follow the Rule of 85, which says that if your age and years of service to your employer total at least 85, then you can retire early without giving up any of your pension benefits.
This calculation is by no means universal. That being said, it’s probably among the most common formulas you will find in the pension arena today. In this article, we will go over the Rule of 85, how it works, what its limits are, and how you can use it in your retirement planning for income and other financial goals.
When planning for healthcare in retirement, you may have come across the Medicare “Income-Related Monthly Adjusted Amount,” or “IRMAA” for short. It’s a fancy way of referring to the extra monthly premium amounts that you might pay on your Medicare Part B and Part D coverages.
Those extra monthly premium amounts are basically “surcharges” on your Medicare premiums, and they can apply to those with Standard Medicare and Medicare Advantage plans. Whether IRMAA applies to you and other Medicare beneficiaries is determined by your modified adjusted gross income (MAGI) from two prior tax years.
While you obviously want to maximize your income in retirement, in some cases this can lead to those additional surcharges on your Medicare coverage. If your income exceeds a certain amount each year, then you may have to pay the monthly adjustment amount on top of any taxes that you owe.
This surcharge is also in addition to the monthly premiums that you will pay for Medicare Parts B and D, which cover doctor visits and prescription drug coverage. IRMAA can raise the cost of Medicare by hundreds or even thousands of dollars per year for those whose incomes are high enough.
It’s a big but little-known issue, to say the least. In this article, we will go over the basics of IRMAA, how it works with Medicare and retirement in general, and some possible strategies that can help keep them and other healthcare costs at bay.
The good news is, yes, most of your retirement assets are protected in one way or another. The bad news is that the protection is mostly a matter of state law. As a result, the details depend on where you live.
In this article, we will talk about the various creditor protections that you may have in retirement. Keep in mind that this is general information and isn’t intended to be legal advice. If you have any questions about your personal situation, talk to your financial professional and to an experienced attorney.
Are you looking for an experienced retirement financial advisor to help you plan for a secure, comfortable future? Retirement has changed, and planning for it isn’t quite what it used to be. In the past, you worked for the same company for decades and were rewarded with a pension.
Those days are long gone, with pensions now largely a distant memory. People are also living longer, and thanks to advances in healthcare and technology, they can spend up to one-third of their adult lives in retirement.
The question then arises of how to make your money last for all that time. For starters, retirement doesn’t mean the same thing to everyone.
Some want to call it quits with work and enter into a more relaxed lifestyle. Others find meaning in continuing to work, remaining active in entrepreneurship, pursue consulting opportunities, starting their own business, or even embarking on a second-act career. Still, others might want to travel, visit foreign lands that they have dreamed of seeing, or get involved with causes or organizations which they care about.
No matter what, you will want to keep up your lifestyle in retirement. There are many things that can affect your retirement income, including healthcare, rising medical costs, taxes, changing housing situations, and long-term care needs.
The advisor whom you work with needs to understand all of these possibilities and more.
Being a competent retirement financial advisor is about far more than choosing investment strategies and growing your pot of money. It’s about making your money last for the rest of your lifetime, generating reliable income, and providing the resources to enjoy retirement as you see fit.
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