Retirement can be a time of great joy and relaxation, but it can also be a time of stress and anxiety. Transitioning from working life to retirement can be challenging, and the loss of routine, identity, and social connections can be difficult to navigate. Moreover, retirement can bring new financial and health-related concerns, adding to many retirees’ stress.
One of the main sources of stress in retirement is financial uncertainty. Many retirees worry about whether they have saved enough money to support themselves in retirement and fear running out of money before the end of their lives. This fear can lead to anxiety and can make it difficult for retirees to enjoy their retirement years. Moreover, unexpected expenses, such as medical bills or home repairs, can further exacerbate financial stress and add to retirees’ worries.
Retirement can also bring changes to social connections, which can be stressful for many people. Retirees may miss their daily interactions with colleagues and feel disconnected from the workplace and the sense of purpose that work provides. Moreover, retirement can lead to changes in relationships with family and friends, as retirees may find that they have more time on their hands than their loved ones do.
In addition to these social and financial concerns, retirement can also be stressful from a health perspective. As people age, they may face new health challenges, such as chronic illness, that can impact their quality of life and add to their stress levels. Furthermore, retirement can lead to a more sedentary lifestyle, which can contribute to a decline in physical and mental health.
There are several strategies that retirees can use to manage stress and navigate the transition to retirement more smoothly. One of the most important is to maintain a sense of purpose and engagement in life. Retirees can find new hobbies or interests, volunteer, or take on part-time work to stay engaged and connected to others. This can help alleviate the sense of loss and disconnection that many retirees feel.
Another strategy is to stay socially connected. Retirees can stay in touch with former colleagues, join social clubs or groups, or participate in community activities to maintain a sense of connection and purpose. This can help prevent social isolation and loneliness, which can be detrimental to both physical and mental health.
Moreover, retirees can take steps to manage their financial concerns by creating a budget, working with a financial advisor, and exploring different retirement income sources, such as Social Security or annuities. This can help alleviate financial stress and provide a sense of security and stability.
Finally, retirees can take steps to maintain their physical and mental health by staying active, eating well, and seeking medical care when needed. Engaging in regular physical activity can help improve mood, reduce stress, and prevent or manage chronic illness.
In conclusion, retirement can be a time of stress and uncertainty, but there are strategies that retirees can use to manage these challenges and enjoy a fulfilling and healthy retirement. By maintaining a sense of purpose and engagement, staying socially connected, managing finances, and prioritizing physical and mental health, retirees can navigate the transition to retirement more smoothly and enjoy a fulfilling and rewarding retirement.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
Student loan debt is a growing problem in the United States, with many people struggling to pay off their loans well into their retirement years. According to a report from the Consumer Financial Protection Bureau (CFPB), the number of older Americans with student loan debt has quadrupled over the past decade, with more than two million people aged 60 and over holding student loan debt. This trend has serious implications for older Americans’ financial security and wellbeing.
One of the main challenges facing older Americans with student loan debt is the impact on their retirement savings. Many people who are still paying off student loans may not be able to contribute as much to their retirement savings as they would like, leaving them vulnerable to financial insecurity in retirement. Moreover, some older Americans may have to continue working well into their retirement years to pay off their student loans, which can be physically and emotionally challenging.
Additionally, student loan debt can impact older Americans’ access to credit and other financial products. Many lenders may be reluctant to extend credit to people with high levels of debt, which can limit older Americans’ ability to obtain credit cards, mortgages, and other financial products. This can have serious implications for their ability to purchase homes, cars, and other assets and impact their overall financial wellbeing.
Older Americans with high levels of debt may be more likely to delay or forego medical treatment or other essential services due to financial constraints. This can seriously affect their health and wellbeing and lead to higher healthcare costs in the long run. Moreover, student loan debt can also impact older Americans’ ability to access healthcare and other essential services.
There are several strategies that older Americans with student loan debt can use to manage their debt and protect their financial security. One of the most important is to explore options for loan forgiveness or other forms of relief. Depending on the type of loan and the borrower’s circumstances, loan forgiveness or discharge options may be available, which can help reduce or eliminate the debt burden.
Moreover, older Americans with student loan debt can explore options for refinancing or consolidating their loans. By consolidating their loans, borrowers may be able to obtain a lower interest rate and reduce their monthly payments. Additionally, refinancing may be an option for borrowers with good credit who are able to obtain a lower interest rate.
Another strategy for managing student loan debt is to prioritize payments and create a budget. By prioritizing loan payments and creating a budget, borrowers can better manage their finances and ensure that they are making progress in paying off their debt. Moreover, older Americans can work with financial advisors to explore other strategies for protecting their financial security, such as investing in retirement accounts or exploring other income sources.
In conclusion, student loan debt is a growing problem for older Americans, with serious implications for their financial security and wellbeing. However, there are several strategies that older Americans can use to manage their debt and protect their financial security. By exploring options for loan forgiveness or relief, refinancing or consolidating loans, prioritizing payments, and working with financial advisors, older Americans can better manage their debt and achieve greater financial security and wellbeing in retirement.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
Annuities are a great way to ensure your financial security in the long term. Annuities provide regular payments that can help you pay bills and cover other expenses while also helping protect against inflation and market downturns. Annuities are popular with many retirees as they offer a steady income stream that can last throughout retirement.
The question is, how much income does an annuity payout on average?
The answer depends on several factors, including what type of annuity you purchase and the terms of the agreement. Annuities typically guarantee a fixed payment amount or can be variable, depending on the performance of certain investments or indexes. Annuities are also available with riders that increase the amount of income you receive.
If you’re purchasing a fixed annuity, the amount of income is predetermined by the terms of the agreement and is typically based on your age and the length of time over which payments will be received. Annuities with guaranteed payouts usually offer higher rates than variable annuities, which depend largely on investment performance. Annuity income may also be increased by adding riders like inflation protection or other options that guarantee additional payments.
Generally, an annuity can provide anywhere from several hundred dollars to several thousand dollars a month in retirement income, depending on the type of product purchased and any riders added. As with most investments, it’s essential to consider all of your options before purchasing an annuity to ensure you’re getting the best deal.
Maximizing your payout
In addition, there are several steps you can take to maximize your annuity income and get more out of your investment. Annuitants should review their policy details regularly, as rates may change over time. Annuitants should also consider adding riders to their policy if it suits their particular circumstances. These additional features may help increase the income received from an annuity. Annuitants may also increase the amount of money they receive by taking a lump sum distribution option or electing periodic payments.
Overall, as stated above, the average income from an annuity will depend on the type of product purchased, any added riders, and other factors. Annuity income may range from several hundred dollars to a few thousand dollars per month, depending on the type of annuity and any riders added. By reviewing policy details regularly and adding riders to their policy, annuitants may be able to increase the amount of money they receive from an annuity. Annuities are a great way to ensure your retirement financial security, so make sure you understand your options before investing.
If you’re considering an annuity as a part of your retirement income, it’s essential to understand your options. Contact an annuity expert to learn more about the different types of annuities and how they can help secure your financial future.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
There is a well-known financial planner, and you may have seen him appear on television and in print advertising, who has built his reputation by making this bold and controversial statement. “I hate annuities…”. The intent of this paper is not to bring attention to or to discredit this professional pitchman.
He has already done that by making irresponsible statements, such as this, in public while privately buying stocks in companies that sell them. My purpose is to state, “I love annuities…but annuities may not be for everyone or used for all purposes…especially if the purpose of your moneyis to leave part or all of your estate to your beneficiaries.” In cases like this, I recommend life insurance.
Following is a brief listing of reasons why I love annuities if the purpose of your money is to spend it while you are alive:
• Your money is safe in an annuity because your principal is protected. • Your money is secure in an annuity because it is protected by the strength of the insurance company that sells it. • Because annuities are tax-deferred, interest earned on your account is not taxed until you withdraw funds from your annuity. • The proceeds received from your annuity go directly to your beneficiary after your death and will avoid probate. • An indexed annuity earns interest on the income growth of the index but is not subject to market losses. • You may choose an income rider on your annuity that will guarantee lifetime income for you and spouse.
Following is a brief listing of reasons why I love life insurance if the purpose of your money is to provide for your beneficiaries after your death:
• Life insurance may be used to replace the policy owner’s lost wages after death. • Life insurance proceeds may be used to help pay for your children or grandchildren’s education. • Life insurance proceeds may be used to help pay off debts, and to protect your spouse’s financial independence. • Life insurance may be used to pay off a home mortgage, allowing your spouse to live in the family home without debt. • Life insurance may be used to support your favorite charities. • Life insurance may be used to pay funeral expenses. • Life insurance provides tax advantages to the owner and beneficiaries like no other product can. • Some life insurance policies may provide benefits to pay for nursing and home health care expenses.
In conclusion, I love annuities and you should too if the purpose of your income is to provide for you while you are alive. I love life insurance and recommend it to my clients if the purpose of your money is to leave it to your beneficiaries after your death.
What is the purpose of your money? What do you want it to accomplish?
I recommend you consult your trusted advisor to help answer this critical question for you and your family.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
In my line of work, I have the unfortunate job to deal with the passing of someone’s spouse, parent, or sibling. I see in these moments of grief I know how, if the details aren’t thought of ahead of time, the pain can be compounded with the frustration of trying to navigate through the messiness of financial matters not thought of ahead of time.
Recently, a friend died, her husband not only has to deal with the grief of losing his spouse, but also with all the details of their financial life.
It soon became evident that he did not know the details of their finances (he didn’t even know the password to the checking account). And because of this, I thought that I would take the time to share what I advise my clients to do regarding the preparation of what is inevitable.
I advise my clients to keep a list of all their accounts (checking, savings, CD, annuities, life, mutual funds, etc.) in their Safe Documents folder. In it along with names and phone numbers of their advisors for each of those accounts. For the checking, savings, CD’s, etc., those accounts should have a POD (Payable On Death), as well as having their passwords for those accounts given to someone they trust.
The reason I say giving the password to someone they trust you ask? What happens if the mortgage needs to be paid and yet the death certificate is not available yet? Even though the account may have the POD, until the death certificate is produced, only those on the account has authority to access the accounts to take care of any necessities.
When it comes to a spouse having to deal with the financial decisions; the grief can cloud their choices, and that is why having a plan written out and discussed with the family and the advisor can take away one less decision to make, since it has already been made. This is especially true when it comes to planning the funeral.
All the proper planning in the world will not be beneficial if the information cannot be found during the crucial days and weeks following the loss of a loved one, or not having a written-out plan and discussed with an unbiased advisor and attorney to help carry out those wishes. While the topic is maybe challenging to discuss, it is essential.
Here are some tips of things to have in your Safe Documents Folder.
Will: If the deceased had a will, it outlines how their assets will be distributed and who will be in charge of carrying out their wishes.
Trust documents: If the deceased had a trust, the trust document outlines how assets will be distributed and who will manage the trust.
Life insurance policy: The policy outlines the benefits and who the beneficiaries are.
Marriage certificate: If the deceased was married, the marriage certificate may be needed to prove their relationship with their spouse.
Social Security card: The Social Security Administration will need to be notified of the death, and the deceased’s Social Security number will need to be included on certain forms.
Military discharge papers: If the deceased served in the military, their discharge papers may
Being prepared is smart planning.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
There is an old saying about life insurance: “you buy life insurance because you either owe someone or you love someone.”
The life insurance industry has changed, with the introduction of the internet, access to information has increase as well as the options to acquire it and manage it. For many people life insurance is just a commodity and frankly it is until….. until the insured dies. Then it becomes a lifeline to security, income and family continuation.
Working with a licensed and authorized insurance agent can help you decipher the insurance road. Still many people want to look behind the hood for themselves. If you are one of those people, here are some tips.
Shop around and compare quotes from multiple insurers. Different insurers may have different rates for the same coverage, so it’s important to compare quotes from multiple companies to find the best deal.
Consider term life insurance. Term life insurance is generally less expensive than permanent life insurance, such as whole life or universal life. With term life insurance, you pay a premium for a specific period of time (the “term”), such as 10 or 20 years. If you pass away during the term, your beneficiaries will receive a death benefit. If you outlive the term, the policy will expire, and you will no longer be covered.
But, term insurance is like renting, you only can keep it for a specific period of time. Permanent (whole life) insurance will protect you for your entire life.
Consider your coverage needs. The amount of coverage you need will affect the cost of your policy. Determine how much coverage you need based on your financial goals and the needs of your beneficiaries, and choose a policy that provides the right amount of coverage at a price you can afford.
Consider your health. Insurers will consider your health when determining the premium for your policy. If you have good health, you may be able to qualify for lower premiums.
Consider your lifestyle. Insurers may consider factors such as your occupation, hobbies, and whether you smoke when determining the premium for your policy. If you have a high-risk occupation or engage in risky hobbies, you may pay more for life insurance. If you smoke, you may also pay more for life insurance.
Considering working with an independent insurance agent. An independent insurance agent can help you compare quotes from multiple insurers and find a policy that fits your needs and budget.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
Brian Long is a local business forecaster. Credit: GVSU
The “back-to-work euphoria” of January has faded and economic indicators edged back into negative territory in West Michigan during February, according to the latest survey from Grand Valley State University’s Seidman College of Business.
The Current Business Trends survey of West Michigan manufacturers released March 8 found key indexes sliding as new orders and production soured after an unexpectedly rosy outlook in January.
“Overall we had expected business conditions to soften in 2023 and this month’s report is a confirmation of that trend,” said Brian Long, director of supply chain management research at the Seidman. “We expect interest rate-sensitive industries to retreat, but are still expecting that the pent-up demand for automotive will keep the West Michigan economy positive.”
Based on responses from the survey, Long said he also expects a positive outlook from aerospace firms, while the prospects for the office furniture business “remain far less certain.”
“However, even if the markets for office furniture remain soft, a major collapse like we’ve seen in other downturns is unlikely,” Long concluded.
Both the short- and long-term business outlook indexes slid back into negative territory after showing a more upbeat outlook in January.
Broader indicators are showing the world economy proving resilient despite the war in Ukraine, Long said.
“The world economy is not as grim as you might imagine,” he said. “The J.P. Morgan international survey of purchasing agents indicates that we are absolutely at break-even now. Some countries are down, but enough countries are up right now that the average is at a break-even point.”
GVSU’s Current Business Trends survey indexes are tracked based on whether survey respondents report “up,” “same,” “down” or “N/A” to questions about business conditions.
Here’s a look at some key indexes:
Sales (new orders): -17 in February vs. +18 in January
Production: -7 in February vs. +21 in January
Employment: +17 in February vs. +18 in January
Lead times also improved in the survey, which Long noted was a strong indicator that supply chains are continuing to loosen up, despite continued shortages and high prices for specific commodities.
Our parents and grandparents both taught us that making mistakes was part of life.
Some mistakes are easier to recover from than others. But when it comes to money and time, the closer you are to retirement, the less time you have to recover from bad money moves. My advice is not to take any chances you can’t afford. As you near retirement, you’ll need to spend more time creating an investment approach that aligns each account to its specific goal for cash flow requirements during retirement. The worst times for your investment portfolio to take a hit are somewhere in the five years before and five years after you retire. Some have called this the red retirement zone. Lose money in this segment, and it will significantly impact how you spend and withdraw money throughout your retirement years.
Here’s a new retirement approach. It’s not about being rich; it’s about having the income needed to have peace of mind. We may never tire of discussing lessons from The Great Recession, which hit two groups especially hard–teens who saw their parents lose a home or job, and boomers who saw their savings depleted precisely at the wrong moment in life. So proper financial planning for retirement is crucial to your success. Boomers need to learn that they are leaving the accumulation phase of their life and now will be focusing on asset protection, sustainable income, and distribution of their assets over the next 30+ years.
Many people are in this category express extreme insecurity regarding the reality of ever retiring and having a sufficient income stream during their retirement years. So what can Worry-Free retirement income solutions offer you? Our planning provides a retirement income trifecta.
First is a guaranteed sustainable way to maintain income in retirement.
Second, are potentially higher income payments than you can achieve anywhere else.
A third is a reduction of some of the market risk from your overall portfolio before and during the years of your retirement when you can’t afford to endure the consequences of a market downturn. It may be true that money can’t buy you love, but it can buy happiness in retirement, as sufficient amounts of guaranteed income equal a happy retirement.
Planning with certainty is the new strategy for retirement income. For nearly two decades, financial advisors subscribed to the notion that their clients could spend 4% annually of their accumulated savings in retirement and not run out of money. No more. Between market volatility, inflation, volatile interest rates and an uncertain economy, advisors are questioning the traditional approaches to retirement income. Of course, what you consider an uncertain economic environment depends on who is reporting the news and what day it is. But it doesn’t matter if you’re properly planned.
Simply put, today’s retirement portfolios demand a smarter balance of growth and safety to effectively achieve a stream of lifetime income. The good news is that the answers to the challenge are emerging in the form of improved strategies that promise to generate more income at less cost and with less market risk.
Don’t be like Scarlet O’Hara, who said, “I can’t think of that right now. If I do, I go crazy. I’ll think about it tomorrow.”
It would be best if you thought about it today.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
“The things you do for yourself are gone when you are gone, but the things you do for others remain as your legacy.” – Kalu Ndukwe Kalu
Created to own and control a life insurance policy or policies while the insured is alive, Irrevocable Life Insurance Trusts (ILITs) are tools that are sometimes recommended by estate and planners. ILITS also manages and distributes proceeds from a policy when an insured dies.
ILITS have three components: a grantor (creator of the trust), a trustee (manager of the trust), and a beneficiary or beneficiaries. Beneficiaries are those who receive the assets of the trust when the grantor dies.
In an ILIT, the trustee purchases the policy or policies, and the trust becomes the owner. When insurance benefits are paid out upon the grantor’s death, the trustee collects those funds, pays any estate taxes due, along with outstanding debts such as legal fees and probate costs, then distributes the rest to the beneficiaries.
What are the benefits of an ILIT?
The primary reason most people consider an Irrevocable Life Insurance Trust is to help mitigate estate taxes. Over the past few years, the government has increased the estate and gift tax exemption to $11.58 million per individual. Since the majority of people don’t come anywhere close to that amount, the tax benefits of an ILIT are not as attractive as they once were.
Still, there are other reasons people choose an ILIT. These include:
· Beneficiary incapacity: If a life insurance beneficiary is incapacitated, having an ILIT can prevent the court system from controlling the proceeds.
· Provides cash to pay expenses: If there are estate taxes or other debts, an ILIT will provide immediate money to pay those expenses.
· More control: A properly-designed ILIT gives you more control over the policy or policies and the use of proceeds.
· Income for a spouse: An ILIT can provide Income to your spouse without that money being included in the spouse’s estate.
· Potential protection for heirs: Depending on the state in which you live, proceeds from life insurance payouts may have protection from creditors.
· Ability to include a “Spend-Thrift” Provision: If you have an heir or heirs who have issues managing money, your ILIT trust can contain a spend-thrift provision. A spend-thrift provision pays your beneficiaries monthly instead of giving them a lump sum upfront.
ILITS are not for everyone. They have some definite cons worth considering:
ILITS generally cannot be modified. The “irrevocable” part of an ILIT means that it is nearly impossible to make changes other than changing your trustee. Once you place a policy in an ILIT, you give up all rights to that policy. You cannot reassign it to a different trust or entity. ILITS are complex and nuanced legal vehicles requiring the expertise of an attorney who specializes in trusts. They are rather expensive to create and maintain, and you should consider these costs.
ILITs can be very expensive to create and maintain. An ILIT is not something you can do yourself with online software. It requires the often pricey services of an experienced estate planning attorney. In addition to setup costs for an ILIT, there are also ongoing expenses that can add up.
While an ILIT offers certain advantages for high-net-worth individuals, it is far from the only option. There are many different kinds of trusts. Each of these trusts are designed to solve specific estate issues.
If you are considering forming a trust, use an authorized professional and experienced trust designer (attorney) who understands your goals and unique financial situation to see if an ILIT is the best choice. Legal representation is important when considering an ILIT; never attempt this alone.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
“A living trust…is more flexible and more private than a will. It affords you, your assets, and your heirs greater protections should you become incapacitated.”- Consumer Reports
Most people understand that a will is an estate management document that takes effect after a person dies.
However, there is also a way to administer your estate and ensure your wishes are followed. A living trust is a fund set up while you are alive to help you plan your estate more efficiently and privately.
A living trust is a legal vehicle used to pass on the assets of an estate, such as property, investments, collectibles, and other assets. It is sometimes chosen by people who want to help their heirs avoid a lengthy and expensive probate process or fear they may become incapacitated later in life.
A living trust provides clear instructions about dividing assets once the original owner passes away.
You can fund a trust using several sources, including:
· Cash and bank accounts
· Real estate
· Insurance
· Intellectual property, including patents, copyrights, and trademarks
Formation of a living trust involves the owner of the assets, called the “grantor,” removing his or her name from ownership. Then, the assets are placed into the trust’s name. This process is known as funding the trust.
Once funding occurs, the grantor designates a “trustee,” charged with ensuring that all the trust provisions execute correctly. A trustee must be carefully selected and could be a relative or close associate of the grantor, or even a reputable third party such as a lawyer, banker, or accountant.
Establishing a trust fund enables the grantor to leave an inheritance to their heirs, also called “beneficiaries.” The grantor can even place specific conditions on receiving trust items.
Living trusts come in two different versions: revocable and irrevocable. Revocable trusts tend to be the least complex and most common type. Revocable trusts offer flexibility in that they can be changed or canceled by a grantor.
Advantages of a Living Trust
All living trusts offer some unique estate management advantages.
These include:
Increased privacy.
Unlike wills, living trusts are not public documents. The public cannot get copies of a living trust without permission from the trustee.
Shorter, less expensive probate. With a trust, the trustee can take care of end-of-life issues, like dealing with creditors, more efficiently. The trustee can act immediately, without the need to wait for a probate judge to decide.
The Downsides of a Living Trust
Before deciding to set up a trust, you should recognize that there are potential downsides.
Trusts can be costly: Depending on your circumstances and your goals for a trust, it can be expensive to set up. Some people attempt to set up trusts themselves, using forms or an online platform to avoid this.
You must participate in the process: When a grantor establishes a trust, he or she has the sometimes tedious job of retitling assets. Failing to retitle assets means the trust will not perform to expectations.
Whatever you decide, always use an authorized attorney to prepare your trust. Never use an insurance agent who claims to be working with an attorney; these can be more costly and are frowned upon by the legal community.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
You are likely to be retired much longer than you think.
For how long do you think you will live? Do you believe you’ll live into your late 70s? Are you confident you’ll follow in the path of your parents, who were alive and well into their mid to late 80s?
The average joint life expectancy (men and women together) is approximately 90 years for over 49% of the population. A full 20% of Americans live to age 95!
Depending on your unique perspective, that’s either good or bad. It’s good because many people want to live for as long as possible, provided they are in decent physical and mental health. However, a long life can be bad news when it puts you at risk of outliving your money in retirement.
Something else to consider is that these numbers are AVERAGES. More people are hitting triple digits, and you could very well be one of them. There are tons of exceptions to the rule, especially if you are the beneficiary of excellent genes, have made an effort to stay fit and healthy, and have managed stress properly.
Longevity is a possibility. This is why creating a portfolio to help you maintain your current standard of living in 30-plus years of retirement is challenging. Having less money in retirement is a concern for retirees and pre-retirees. Nearly all seniors know someone who has beaten the odds and lived longer than they planned.
Many retirees and pre-retirees had had someone in their own families who went through hardship and deprivation because they ran out of many at a time when they needed it the most.
The logical solution to not having enough money for retirement is to start earlier and save more. That’s not always easy to do, however. Many people are barely making ends meet and don’t have much discretionary money to create retirement income. You may fall into that category and worry that you don’t have any money to build a retirement account.
How do you find money to finance a retirement plan?
Developing a saving and income-planning mindset is valuable at any age.
Understandably, you might have a tight budget due to where you are in your career track. Or, you might have family, medical, or debt issues that make saving a tough proposition.
Fortunately, there are some ways you can free up cash or find the money you never knew you had to fund a retirement plan. Here are three things you can do right now to free up money for retirement.
1. Debt restructuring. Look at all your debt, including student loans and consumer debt. Perhaps you can negotiate lower rates or pay the debt off more slowly.
2. IRA or 401(k) Ask your financial expert and tax advisor to see if you might qualify to pull money out of your qualified plan without a penalty. If you qualify, you can use that cash to purchase investments that give you higher interest rates. This option is available under rule 72(t) for certain individuals who are younger than 59½.
3. Live a simpler lifestyle. Making your car, major appliances, and other big-ticket items last longer can add up to thousands of dollars you can use to fund your post-career life.
No matter your current financial situation, you can and should set aside money for a time when you will no longer get a paycheck. Starting early and being consistent, along with small lifestyle changes, will help you avoid common mistakes and achieve a better retirement lifestyle.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
As more and more seniors look for ways to lower their taxes in retirement, Qualified Longevity Annuity Contractsor QLACs are stepping into the spotlight.
Many seniors in the early phases of their retirement don’t need to tap into their traditional retirement accounts. (IRAs/401ks). Unfortunately, they are forced to do so because of IRS Requirement Minimum Distributions (RMD) rules.
Note: The RMD age recently changed from 70&1/2 to 72. When you reach your RMD age, you must take money out of your qualified plan each year. Be sure to clarify with your CPA or tax planner to which group you belong.
If you are in a similar situation and don’t need to take distributions, you may want to consider setting up a QLAC. The “qualified” part of the QLAC refers to the fact that this kind of annuity is purchased with “qualified” funds as defined by the IRS.
A QLAC uses a portion of a person’s RMD distributions to grow deferred until a certain age (85 maximum) QLACs are a type of longevity annuity.
A QLAC, which has the insurer taking on market and interest rate risk, is set up by transferring money from an existing IRA or 401(k) account to an insurance company annuity. A QLAC contract pays you a steady stream of income later in life.
The longevity annuity “chassis” of a QLAC has been around for years. But what has changed is how the IRS treats longevity annuities within tax-deferred accounts. Current rules allow individuals to spend 25% of their retirement savings account or $135,000 (whichever is less) to purchase a QLAC.
In 2014, the Treasury Department relaxed RMD rules a bit to encourage Americans to prepare for retirement. These new rules let you buy a QLAC with your IRA and not include the value of the QLAC when you calculate your RMD.
How does a Qualified Longevity Annuity Work?
A Qualified Longevity Annuity is an annuity into which you pay a lump sum of money. At a future date specified on your contract, you begin receiving guaranteed monthly income for as long as you live.
A longevity annuity appeals to many because the stock market and interest rate risk transfers to the insurance company. The insurance company tells you exactly how much Income you will get in the future when you purchase the annuity. This future income amount is guaranteed.
With a QLAC, you get tax-advantaged income security that starts in your old age for an attractive price.
By owning a QLAC, you may be able to increase the amount withdrawn from your savings in the early retirement phase by as much as 30% because the annuity will give you predictable, guaranteed Income later.
Many retirees purchase QLACs because of their tax advantages. However, they have other benefits, too. QLACs require only one upfront payment and don’t have annual fees. They are one of the easier-to-understand, straightforward, and transparent financial products.
How can a QLAC help reduce taxes?
A QLAC can help you retain more of your money in retirement by reducing your tax burden. Let’s say you had a traditional IRA and invested the maximum allowable $135,000 into a QLAC with a payment start date of age 80. If you had not purchased a QLAC, your $135,000 would grow in value. When you reached your RMD age, you would have to withdraw your first RMD, which is fully taxable as income. Having a QLAC, you are permitted to omit that $135,000 from your RMD calculations. The tax savings from not having to take your RMDs for nearly ten years could add up to huge savings. To understand how this might help your unique situation, you will need to consult a tax expert who understands the inner workings of QLAC products.
What are some pros and cons of QLACs?
QLACs, as mentioned before, allow you to defer mandatory distributions up to age 85, which could add up to significant tax savings. Also, you can retain tax advantages because you purchase a QLAC with qualified funds.
A QLAC can provide an increase in your financial security and well-being. You will have the kind of contractually guaranteed, predictable stream of income that you only get with annuity products.
Properly designed QLACs can also help you cover long-term care expenses and provide protection for your spouse so that if you die before they do, they will continue to receive Income.
Converting as little as 15% of your 401(k) balance to a QLAC when you retire can boost your retirement readiness in a meaningful way.
The downsides of QLACs
QLACs have many positive benefits, but they are not for everyone. If you enjoy a lot of hands-on control over your money, having a QLAC might not work well for you. That’s because you relinquish short-term control over your money to get guaranteed lifetime income with an annuity.
Like many other financial products, QLACs require a degree of trust in the company providing the product. After all, payouts for annuities are contingent upon the claims-paying ability of the annuity company who issues them. You must do your research and only select companies with strong ratings and positive client feedback.
You should only purchase a QLAC after consulting a safe money and income specialist. Even if you currently have a financial advisor, he or she may not understand the nuances of a QLAC, especially if you choose to use a QLAC in more complicated financial planning strategies, such as “laddering.” If your current advisor cannot explain QLACs to you, seek advice from a qualified expert.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
Annuities are financial products that provide a guaranteed income stream in exchange for a lump sum payment or series of payments. There are several different types of annuities, including fixed, variable, and indexed, each with its own features and benefits.
Here is an overview of how annuities work:
An individual enters into a contract with an insurance company to purchase an annuity.
The individual makes a lump sum payment or a series of payments to the insurance company.
The insurance company invests the payments and earns a return on the investment.
The individual can choose to receive the income from the annuity in a number of ways, such as:
A fixed amount each month, quarter, or year
A variable amount that depends on the performance of the underlying investments
A combination of the two
The income payments from the annuity are guaranteed for a specified period of time or for the remainder of the individual’s life.
One common type of annuity is a fixed annuity, which provides a guaranteed rate of return and a guaranteed income stream for a specified period of time. The income stream can be received all at once in a lump sum, or it can be received in installments over a period of time.
Before making a purchase, it is important to carefully review the terms of the annuity contract, including the fees, surrender charges, and any restrictions on withdrawing funds.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
If you are like many pre-retirees or retirees, you may be hesitant to purchase annuities because you worry you will enter the market at the wrong time and won’t maximize your returns. An increasingly popular technique known as “annuity laddering” may help guard against this situation and make the transition to annuities much easier and less stressful for you.
Building an annuity ladder means that you purchase a series of annuities over time instead of dumping a lump sum into one annuity that locks you into one rate. With a ladder, you split your premium across multiple smaller annuities. For instance, maybe you decide to buy one annuity every two years for the next ten years. Or you buy one annuity per year for the next five years.
The annuity ladder strategy has several advantages
The first advantage is that you don’t have all your eggs in one basket. By diversifying your annuities, you are less susceptible to the fluctuations of the market.
The second advantage is that you can take advantage of changes in interest rates. When interest rates rise, you can purchase annuities that have not yet been affected by the market change.
The third advantage is that you can ladder annuities with different payouts. For example, you could buy an annuity with a term period of 5 years, the next year buy another 5-year term period, and up the ladder, you go. When you use the annuity as income, when one matures, simply start converting them to an income stream. Income periods can be any length you wish, even a lifetime. This way, you would have a stream of income that would last for the rest of your life.
Diversifying to reduce risk
Laddering annuities can be a great way to secure your financial future. By diversifying your annuities, you can protect yourself from market fluctuations and take advantage of changes in interest rates. By laddering annuities with different payouts, you can ensure that you have a stream of income that lasts for the rest of your life.
Annuity laddering can help you manage risk. By laddering annuities with different maturity dates, you create a “spread” that can protect you against interest rate risk.
Since predictions of whether interest rates will go up or down are, at best-educated guesses, an annuity ladder lets you bet on both scenarios. A ladder may increase your chances of earning more when rates go up or smooth out losses if rates go down.
Always review to see what’s right for you
There are many different ways to build annuity ladders for yield, including fixed-rate ladders using multi-year guaranteed annuities (MYGAs). You can also use a “mixed-fix” approach combining MYGAs and fixed–index annuities. Deferred multi-year ladders work in a somewhat similar fashion to certificates of deposit (CDs).
Another approach is the deferred multi-year annuity ladder. You take a lump sum to purchase several small annuities in a deferred multi-year annuity ladder, each with a different maturity date. As each annuity matures, you either roll it over into a new annuity or convert it to income.
Creating an annuity ladder may not work for everyone. Still, it is worth bringing up with your retirement advisor, especially if you find yourself considering adding Safe Money products to your portfolio.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
Albert Einstein was ahead of his time. He revolutionized physics thinking, and his theory beginning with the breakout year of 1905, is still the basics of quantum physics today, more than 100 years later. When Einstein is remembered for his work, it is almost always E = mc², the theory of relativity. However, I think a more interesting part of Einstein’s life was his view on compound interest.
Albert Einstein called compound interest “the greatest mathematical discovery of all time.”
The power of tax deferral
Compound interest allows the account to grow by earning interest on the original investment and any accumulated interest. Here is a generally accepted definition of compound interest.
The interest is calculated on the initial principal and the accumulated interest of prior periods. Compound interest differs from simple interest in that simple interest is calculated solely as a percentage of the principal sum.
Compound interest is offered by banks and savings institutions and is also referred to as “double compounding.” The interest is credited, but it is taxable. The downside is when the interest is credited to your account and comes with tax liability.
Insurance companies offer products that allow for tax deferral and compounding but, under certain situations, can also defer the tax liability. These products are called annuities and life insurance. If the accumulated funds are left untouched, the tax liability is deferred.
This concept is referred to as “triple compounding.”
If some of your savings are placed in an annuity, the benefit of tax deferral provides for:
Interest on your principal
Interest on your interest and
Interest on your tax saving, because your interest is free from current income tax in an annuity, can all continue to compound instead of being withdrawn for tax payments.
And there is more
Is that all there is? No! There is also “quantum compounding.”
Quantum Compounding is building on Triple Compounding by adding features only found on certain insurance company annuities.
· A bonus of 5% to 10% may be available on funds deposited immediately and guaranteed
· Long-term care benefit riders may be available
· Lifetime income provisions
· Annual moveable minimum guarantees
· Full guarantees against loss and risk based on the insurance company’s ability to pay.
· Probate avoidance using a named beneficiary
Consider the use of quantum annuities for added benefits and added value for yourself and your heirs.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
West Michigan’s economy took an expected turn into a “shallow recession” in October. (Photo from Pxhere.com)
West Michigan’s economy took an expected turn into a “shallow recession” as area manufacturers are reporting inflation-related headwinds and a slow-down in demand, according to an October survey of purchasing managers by Grand Valley State University’s Seidman College of Business.
Brian Long, director of supply chain management research at Seidman, said the downturn came as no surprise, with local results mirroring national ones.
“If we compare our statistics with those being collected at the national level, we see a pattern of economic erosion with higher interest rates around the world and the ongoing war in Ukraine,” Long said. “We can probably expect both our local and national statistics at the industrial level will probably continue to soften.”
The key new orders index made a turn into double-digit negative territory for the first time in 30 months, amid inflationary pressures, softening demand and uncertainty in the market.
Employment and purchasing indices also were in negative territory, with an increasing number of companies reporting investments in those areas were down versus the previous month.
Meanwhile, production, or gross output, grew during October as some manufacturers continue scrambling to meet demand in sectors like the auto industry, where supply chain issues have hampered business growth.
“Just like last month, the market for office furniture has continued to soften, but pent-up demand for new cars will most likely keep our West Michigan auto parts suppliers and the assembly lines running for the foreseeable future,” Long said. “The comments from our survey participants have now turned increasingly tenuous, and some firms are openly bracing for an impending recession.”
More information about this month’s survey results and an archive of previous survey data is available at the Seidman College of Business website.
What appears foreign will become commonplace, and you might as well prepare for it. Cryptocurrencies and decentralized finance are all the rage right now, and you’ve probably heard of things like Bitcoin or Ethereum. However, the real story lies in the mechanism that drives these new technologies and forever changes the digital landscape. This is where blockchain enters the picture, the novel technology that enables things like cryptocurrency to exist in the way they do.
What is a blockchain, and what is with all the hype?
Blockchain is a digital database used to catalog all kinds of information (e.g., money, goods, properties, and services). The power behind these databases lies in their ability to create blocks of data which are then chained together with timestamps attached for easier tracking purposes. This makes an unbreakable audit trail documenting every action taken on the platform – from transfer payments between users to how many calories were burned during your morning run! Digital databases are powered by a computer network that is either part of a centralized or decentralized network.
Bitcoin, for example, uses blockchain to record peer-to-peer transactions through a distributed database. This distributed database exists between the computers of all users of the cryptocurrency. The idea is that having the database distributed amongst all the users allows for greater transparency and enhanced security. It enables users to access, audit, trace, and verify digital assets without working through an intermediary. By cutting down on intermediaries, blockchain cryptocurrencies put the power to control data back into consumers’ hands.
Why are cryptocurrencies more secure?
The adage “don’t put all of your eggs in one basket” sums it up. Like banks and universities, many institutions with valuable and personal consumer information operate using a central database. This information is stored within a centralized computer network housed in one location. All that data is controlled by one entity and is more vulnerable to hacks because it would require only a single point of failure to gain access. For a potential attacker to compromise a distributed database like Bitcoin, they would have to gain control of at least 50% of the computers within that network. Even then, the other 50% can fact-check and sniff out discrepancies, making it very unlikely that a hack would ever occur.
Why is this important when it comes to managing digital assets?
· No third-party involvement
· Transactions of authenticated digital assets made via blockchain are typically available in 10 minutes, versus a traditional bank transaction that may take 24 hours or more to complete, not including weekends and holidays
· Blockchain technology guarantees the data’s integrity through cryptography and a distributed database.
Why is this important to us now?
This is the evolution of our data future, and the future of all banks is being reshaped by new technology. Protecting and maintaining control of data is more critical now than ever. In the past few years, major companies like Facebook, LinkedIn, and Morgan Stanley have been impacted by massive data breaches affecting millions of users. Blockchain technology is making waves in the digital world by providing much-needed security measures and by giving them the power to control data back to consumers.
Digital?
Yes, your bank is now 100% digital; it is now our future. Be informed.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
Open enrollment for Medicare/Medicaid is through Dec. 7. (Photo from Pxhere.com)
The world of Medicare/Medicaid can be an extremely confusing one. Each year, open enrollment occurs from Oct. 15-Dec. 7. This provides the chance for individuals to review and make changes to their Medicare Part D prescription plans and Medicare Advantage plans. Changes that are permittable include monthly premiums, yearly deductibles copays, prescription copays, prescription formulary (list of covered medications), and pharmacy network.
This process can be overwhelming—how do you know which option is the best fit for you? Here are a few tips for navigating the open enrollment season:
Know the difference between Medicare and Medicaid. “Medicare is a medical program for people over 65 and younger disabled people and dialysis patients. Medicaid is an assistance program for low-income patients’ medical expenses,” explains the U.S. Department of Health and Human Services. If you are a senior, then you are likely navigating the world of Medicare. All changes to your plan must be made by December 7, and new coverage begins on January 1, 2023.
Seek help from a trusted source.The Michigan Medicare/Medicaid Assistance Program (MMAP) provides unbiased help with Medicare and Medicaid at no charge. This state-wide program doesn’t sell Medicare plans—certified volunteer counselors are there to help you understand your options. It is designed specifically to help older adults, their families, and caregivers understand, access, and apply. As Bob Callery, MMAP Regional Director, explains, “When people contact us, they may not be sure of what types of questions they need to ask, MMAP counselors can help people navigate the complexities of Medicare. Our counselors are unbiased and want to help people find what will work best for their needs and is the most cost-effective.” You can set up an appointment with a MMAP specialist at 1-800-803-7174, through the Area Agency of Western Michigan at (616) 456-5664, or email MMAP@aaawm.org.
Watch out for scams. During open enrollment especially, scammers take advantage of this time of year by posing as representatives that offer assistance in signing you up for healthcare. Some quick tips from the Kent County Elder Abuse Coalition include:
Scam: An unsolicited “agent” calls and offers to help enroll you in a health plan. Legitimate agents need your permission to contact you.
Scam: The scammer will ask for your personal information, such as Medicare or Social Security number. You are always able to get information about Medicare plans without providing an ID number. ID numbers are only required when actually enrolling.
Scam: Scammers may offer “free gifts” in exchange for your personal information. Real agents will never withhold service in exchange for your personal information.
An important part of open enrollment is making the best choice for your healthcare needs. Being aware of scams, understanding your options, and getting support from the Michigan Medicare/Medicaid Assistance Program are all things that can help make your open enrollment season a smooth process!
Whole life has a simple objective, to ensure your “whole” life, in other words, it will pay the benefits anytime during your whole life, regardless of how long you live. All you need to do is pay the premium.
Image from Pxhere.com
Life insurance is a contract between an insured person (the policyholder) and the insurer. The premium pays for guaranteed benefits in case of death, but there are other features that can provide additional protection as well.
In exchange for fixed premiums, whole-life policies offer life insurance protection and tax deferral on growth by accumulating cash value with competitive interest rates.
In exchange for fixed premiums, an insurance company promises to pay a set benefit when the policyholder dies but also offers additional benefits as well. Whole life insurance policies can build up cash value, effectively a cash reserve that pays a modest rate of return, and the growth is tax-deferred. Guarantees are based on the claims-paying ability of the issuing company.
Borrowing still option
Most whole life insurance policies allow policyholders to borrow a portion of their policy’s cash value. Access to the cash value can allow you to pay for things like college expenses, a home down payment, or any other needs you may have.
When the policyholder dies, his or her beneficiaries receive the benefit from the policy. Depending on how the policy is structured, benefits are usually not taxable.
Whether whole life insurance is the best choice for you may depend on a variety of factors, including your goals or circumstances.
Considering options
Whole life insurance can be an excellent investment for those who want to be protected financially after death. The policies promise a fixed benefit but also offers additional benefits such as cash value – which can build up and provide returns tax-deferred in order of security against personnel losses caused by unforeseen events like accidents or illnesses, and guarantees based on claims-paying ability from issuing companies.
The FDIC (Federal Deposit Insurance Corporation) does not insure life insurance. It is not insured by any federal government agency, bank, or savings association. Each state’s Department of Insurance regulates life insurance.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
October has always been a devilish month for Wall Street. Black Tuesday was Oct. 29, 1929. Black Monday was Oct. 19, 1987. And the crash of 2008 happened on October’s doorstep on Sept. 29, 2008, when the Dow dropped more than 777 points. The Dow notched a new low for the year and closed below 30,000 for the first time since June 17. The 30-stock index flirted with the bear market territory causing concern and stress.
These are the days of Chicken Littles! In this climate – despite historically low unemployment, robust GDP, and soaring consumer confidence – the stock market still has wobbly legs with no real end in sight.
The problem is not just the current concerns about high debt, trade wars, and rising interest rates; it’s the collective uncertainty and reactionary groupthink over which we have no control. It’s also the psychological traps, triggers, and misconceptions we humans fall prey to.
• Expecting to find high returns with low risk (I’ve got a Rolex watch I’ll sell you for $25.) • Believing that good things happen to you and bad things only happen to others
The reality is you could be as cool as a cucumber, but if those around you think the sky is falling, your portfolio will still likely evaporate.
And history indicates it could take years, or even decades, just to get back to where you were. Everyone seems to run to safety at some time in their lives. Is it time for you to take a long look at safe and secure options?
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
In my line of work, I have the unfortunate job of dealing with the passing of someone’s spouse, parent, or sibling. In these moments of grief, I know how, if the details aren’t thought of ahead of time, the pain can be compounded with the frustration of navigating through the messiness of financial matters not thought of ahead of time.
Recently, this aspect hit home recently when a close friend quickly passed away, leaving his spouse and friends to deal with the remaining chaos. Dealing with finances at the time of grieving adds another level of stress and confusion.
I advise my clients to keep a list of all their accounts (checking, savings, CD, annuities, life, mutual funds, etc. in their trust folder. If they don’t have a trust and own any property, that is the first thing they must do along with their advisors’ names and phone numbers for each of those accounts. For the checking, savings, CDs, etc., those accounts should have a POD (Payable On Death), and their passwords should be given to someone they trust.
The reason I say giving the password to someone they trust, you ask? What happens if the mortgage needs to be paid and yet the death certificate is not available yet? Even though the account may have the POD, until the death certificate is produced, only those on the account have the authority to access the accounts to take care of any necessities.
When it comes to a spouse having to deal with the financial decisions, the grief can cloud their choices, and that is why having a plan written out and discussed with the family and the advisor can take away one less decision to make since it has already been made. This is especially true when it comes to planning the funeral.
All the proper planning in the world will not be beneficial if the information cannot be found during the crucial days and weeks following the loss of a loved one or if not having a written-out plan and discussed with an unbiased advisor and attorney to help carry out those wishes. While the topic is maybe challenging to discuss, it is essential.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
By Dave Stanely WKTV Contributor Integrity Financial Services LLC
(Pxhere.com)
Did you know that you have a valuable asset that is often overlooked and may not be included in conversations regarding your financial portfolio? It’s your life insurance policy. Many people are not aware that a life insurance policy is an asset that can be sold with some of the terms being set by the owner.
All too often, life insurance owners surrender their policy to the insurance company instead of getting a quote in the “secondary” market for what it’s actually worth. The market value of a life policy can be as much as eight times more than the surrender value. If you have a life policy that is unwanted, unneeded, or has become unaffordable, you can get a quote for the cash value in the open market. Typically, you will have several choices as to the disposition of your policy.
One option is to settle for an all-cash offer and surrender any and all ownership of the policy. Another option is to take a reduced death benefit with a partial cash payout and never pay another premium. This is the equivalent of owning a “paid-up policy” for a reduced death benefit which will still be paid to your beneficiary upon the death of the insured.
Older retirees can sometimes find themselves in need of a lump sum of cash later in life due to health circumstances (i.e., long-term care expenses), divorce, or even debt. These are some of the primary reasons why seniors opt to sell their policy and use the money for these needs. It’s your cash and can be used for any purpose. Other examples include investing the cash to generate monthly income, paying for college expenses of grandchildren, or perhaps funding a long-desired family vacation.
One other point to make about selling a life insurance policy in this manner is that this type of sale is not a “viatical settlement.” You may have heard this phrase before but not fully understood its meaning. A viatical settlement is where a person with a terminal illness sells their life insurance policy for less than its mature value to benefit from the proceeds (cash) while the insured is still alive. You do not need to be terminally ill to sell your life insurance policy in the open market. However, it is true that if you have impaired health or you are in your mid to late 80s or 90s, your policy can be worth more due to these factors. However, it is not necessary to be ill to take advantage of selling one or more of your life insurance policies. Do yourself a huge favor, get a quote from a qualified insurance agent, and know your options and the value of your policy before you surrender it to the life insurance company.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
Energy costs may offset lower costs in other areas. (pxhere.com)
The West Michigan economy appears to have flattened, but has not yet contracted into a recession, according to the latest monthly survey data released by Grand Valley State University’s Seidman College of Business.
The September survey of purchasing managers conducted by Brian Long, director of supply chain research at GVSU, found steady demand among automotive suppliers offsetting more negative news about orders coming from sectors like the office furniture industry.
“Of our cyclical industries in West Michigan, our automotive parts producers are continuing to stay fairly busy, but not so much so with our office furniture companies and anything related to capital equipment where the markets are starting to soften — not collapse — just soften,” Long said.
Lower commodity prices for goods like metals and plastic resins will take months to find their way into consumer prices, while energy costs could offset lower costs in some areas, he said.
For the survey, released Oct. 10, the sales/new orders index was flat in September after going into negative territory in July and August.
Production levels were also flat, with a majority of survey respondents reporting output being the same as it was in August.
Long said he’s about 80 percent certain the region is sliding into a “shallow recession,” based on the national trends and feedback he hears from inside the region’s industrial employers.
“The confidence situation has clearly worsened the short-term business outlook index for September,” he said. “However, the long-term business outlook, which queries perceptions for the next three to five years, still remains positive, just not nearly as strong as it was six months ago.”
Get serious about your retirement: If your employer matches your 401(k) contributions, you need to take advantage and max out your contribution. Your employer’s share is “house money,” which means using their contribution as part of your 401(k) plan as an employee benefit. Many 401(k) plans allow for conversion to a guaranteed retirement income which can be used as a lifetime benefit. Ask your benefits manager to see if it is included in your plan. It would help if you also planned at what age you would like to retire. If you have had a loss in investment returns in your 401(k), ask yourself how you can gain that back. Your asset allocation in your 401(k) can be changed as you get closer to retirement age. Most plans allow you to move the money as a rollover to a self-directed IRA, which provides the option of using an annuity with an “Income Rider” attached to provide desired guarantees. If you have an IRA and are not contributing annually, start this year; contributions made before April can be deducted from the previous year’s income.
If you don’t have a will, see an attorney and make one. If you have a current will make sure it is up to date.
Name an executor for your estate. Use caution in the selection, and make sure you have asked the executor for permission to use them. Based on the valuation of your estate and your state of residence, the use of a trust can assist the executor in their responsibilities. Ask your attorney for ideas and help. Never buy a trust from anyone other than an attorney licensed to practice law. Often life insurance is used to provide funds for any taxes or debts that may be due at your death, have a professional insurance review the policies, and make sure the ownership and beneficiary decisions are up to date.
Create an emergency fund for situations that come up, such as a hole in your roof or an unplanned car repair. Only 28% of people have an emergency fund, according to a 2022 Bankrate.com survey.
Take a close look at your investments and review them for changes. Remember, as we get older, we have less time to make up losses in our investments.
Start paying down debt. Debt can be a drag on your retirement; once the debt is retired, stress becomes less, and your options for life increase.
Budgeting and following a monthly plan can help. There are numerous studies about budgeting; one thing is for sure, people who follow a budget have less stress. Make a budget and stick to it.
Life should be enjoyed. Use these simple 7 financial tips as the first step to regaining financial freedom and reducing stress.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
Strong hiring trends, lower commodity prices and high demand for automobiles continue to buoy the Michigan economy even as other indicators signal an economic slowdown.
That’s the conclusion of the August purchasing managers survey for the Institute for Supply Management released Sept. 6 by Grand Valley State University’s Seidman College of Business. Brian Long, director of supply management research at GVSU, said this month’s survey serves as yet another mixed bag with respondents from local manufacturers taking business on a day-to-day basis.
“Locally, we certainly have some indications that our economy is beginning to slow, but we do not yet have evidence that we are now or are about to enter a recession,” said Long, who has been conducting the survey of West Michigan businesses for more than 28 years. “However, if our index of new orders continues to slide, we’re going to have to reassess our position.”
Brian Long is a local business forecaster. Credit: GVSU
Some key findings from this months survey include:
The new orders/sales index in August slipped to -5 from -3 in August, indicating a further erosion in sales among those surveyed
The survey’s production index saw a positive swing from +7 to +17, as did the long-term business outlook index, which rose to +28 from +12.
The short-term business outlook index also swung back into positive territory during August, going from -2 in July to +2.
Long said commodity prices for key industrial supplies like copper, some forms of steel, lead, zinc and oil continued dramatic declines, but those decreases typically do not translate into near-term changes in the retail market, where prices remain elevated.
“Industrial deflation does not easily spill over to the consumer market,” Long said. “So the Federal Reserve is still going to have to raise interest rates considerably to control consumer inflation.”
“Dollars saved 20 years ago have lost nearly HALF of their purchasing power. Such inflation poses a serious threat to seniors entering retirement, as well as those already in retirement.”
Since 2000, the US dollar has lost an incredible 44.2% of its purchasing power. Reports from the government’s Bureau of Labor Statistics (BLS), the official tracker of inflation statistics, indicate inflation may be worse than we think. Even as interest rates remain at their lowest ever, Federal Reserve policies may be pushing inflation higher.
The good news is that taking advantage of viable alternatives to traditional planning and creating a safer, more robust “hybrid” portfolio can help you avoid making those mistakes.
(pxhere.com)
What does this mean for retirees and pre-retirees?
If you have an advisor or team of advisors, they most likely have mentioned the idea of “diversification” at least once. Since 2020, however, the concept of diversification has morphed from a “nice idea” into an absolute necessity. Multiple asset classes, particularly cash-flowing assets, seem to be the only cure for thriving in an increasingly volatile investing landscape. Diversification or developing so-called “hybrid” retirement strategies is essential to avoid a retiree’s most dreaded scenario: outliving their savings.
Proper diversification and risk reduction are part of well-designed, customized financial plans. Contrary to what some advisors preach, there are no shortcuts, no “one size fits all” templates to shorten the process. Portfolio allocation is unique to every individual. Some financial professionals believe the only way to ensure a diversified plan is to invest in every kind of asset.
How does one achieve diversification?
Many people don’t want to spread their cash out in multiple assets because they find it too difficult to monitor and maintain. If that is the case, retirees and those nearing retirement should consider several potential sources of income streams. Each of these assets offers different benefits and risks, and growth potential.
Social Security
Although it is a dependable income source, retirees should not regard Social Security as their sole source of retirement money. In 2020, Social Security paid out an average of $1,503, an amount that is insufficient to meet most retirees’ needs.
Fixed instruments
Debt instruments that pay fixed amounts of interest, such as bonds, are commonly used to build diverse retirement blueprints. Interest from these kinds of assets is usually paid on a semi-annual basis. The principal invested goes back to the investor upon maturity.
Stock market
While the market offers high growth potential, recent volatility makes it clear that such growth often comes with higher risks.
It’s critical when considering this option that you clarify how much risk you are willing to take and whether you have time to recover from any losses you might incur. The COVID-19 pandemic has made Wall Street’s outcomes even more unpredictable, meaning it could take years for seniors who invest too heavily in the market to recover from a downturn. Retirees could find they must withdraw more significant amounts of their cash when stock prices are down, leading to faster depletion of retirement savings.
Be sure you consult with a knowledgeable financial planner to determine whether you have the right amount of money invested in stocks.
“Safe money” vehicles
The cornerstone of a sound retirement is safe money products such as permanent life insurance and annuities. Instead of adding these proven products as afterthoughts, building your portfolio around them makes sense. Owning risk-averse, tax-advantaged products, many of which provide guaranteed income streams, will help you in several ways.
You will be able to plan better, knowing that you have a predictable source of income. Also, unlike stocks and other assets, your principal is protected. And you have the opportunity to use these products to create a legacy for your loved ones. Safe money products like annuities and life insurance also have unique tax advantages that other cash management tools lack.
Depending on your appetite for growth and risk tolerance, there are other possibilities to diversify your retirement portfolio. Before committing to any of these more “exotic” investments, you need to spend time doing your research and due diligence. Then speak to a trusted advisor who will tell you the TRUTH about money and not just try to sell you something.
Financial mistakes can be detrimental to your happiness when you no longer work. The good news is that taking advantage of viable alternatives to traditional planning and creating a safer, more robust “hybrid” portfolio can help you avoid making those mistakes.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
Retirement can mean many different things to many people. For some, it will be a time to travel and spend time with family. For others, it will be a time to start a new business or begin a charitable endeavor. Regardless of what approach you intend to take, here are nine things about retirement that might surprise you.
1. No Age Restriction on When You Can Retire
In the past, most people retired around age 65. However, retiring later in life has become more prevalent in recent years. In fact, there’s no age restriction on when you can retire. As long as you have the financial means to do so, you can retire at any age.
Don’t roll the dice when it comes to retirement, make a plan and review it. (pxhere.com)
2. Retirement Income Can Be Taxable
Depending on your retirement account type, you might have to pay taxes on your retirement income. If you have a traditional IRA, you may owe taxes on the money you withdraw in retirement based on your overall income. If you have a Roth IRA, you won’t owe any taxes on the money you withdraw.
3. You Might Need to Adjust Your Withdrawal Rate
The 65-and-older population is the fastest-growing age group in the United States and has grown by 34.2% over the past decade. The percentage of money you can safely withdraw from your retirement account each year depends on several factors, including the size of your nest egg and how long you expect to live. However, as a general rule of thumb, you should withdraw no more than 4% of your nest egg each year.
4. Consider Delaying Your Social Security
You’ll receive a reduced benefit if you start collecting Social Security benefits at age 62. For example, suppose your full retirement age is 67, and you start collecting benefits at 62. In that case, you’ll receive only 70% of your monthly benefit. If you wait until age 70 to start collecting, you’ll receive 132% of your monthly benefit. The average Social Security retirement benefit is $1,536 per month or about $19,000 per year. The maximum possible Social Security benefit for someone retiring at full retirement age in 2020 is $3,345 per month or $39,000 annually.
5. Don’t Forget The Cost Of Nursing Homes.
Most health insurance plans don’t cover the cost of long-term care, such as the cost of a nursing home. Consider purchasing a long-term care insurance policy or set aside funds to cover any future care costs. The average cost of nursing home care in America is expected to be more than $8,000 a month by 2023. However, actual costs will vary from state to state.
6. You Might Have to Downsize Your Home
If you plan on downsizing your home in retirement, you might be surprised to learn that the cost of living in some areas is quite high. For example, the cost of living in Manhattan is more than double the national average. As a result, you might have to downsize your home to a smaller apartment or condo.
7. Consider Working in Retirement
If you don’t have enough saved for retirement, you might need to work during retirement. In fact, about one in four Americans over the age of 65 are still working. Working during retirement can help supplement your income and allow you to stay active.
8. You Might Need to Save More Than You Think
The amount of money you need to save for retirement depends on a number of factors, including your lifestyle and how long you expect to live. However, as a general rule of thumb, you should aim to have at least 10 times your annual income saved by retirement. For example, earning $50,000 a year, you should aim to save at least $500,000 by retirement.
Bonus Fact About Retirement: Don’t Forget About Inflation
Inflation will have a significant impact on your retirement savings. For example, if inflation is 3%, the cost of living will be 33% higher after 10 years. As a result, you’ll need to save more money for retirement than you think.
The future points to one conclusion: The 65-and-older age group is expected to become larger and more influential. Have you made arrangements for health care expenses? Are you comfortable with your decisions? Have you considered market volatility? Inflation?
Research shows that the average American has $95,776 saved for retirement, and one in three Americans have no retirement savings. Suppose you don’t have enough saved for retirement. In that case, you should consider working during retirement, downsizing your home, or delaying your Social Security benefits. You should also be aware of the potential costs of nursing care and long-term care. Finally, remember that you might need to adjust your withdrawal rate as you get older. With careful planning, you can ensure a comfortable retirement.
A retirement strategy is not a “set it and forget it” proposition. You should review your strategy annually to ensure you are on track to reach your goals. How have you prepared for retirement? Are you on track to reach your goals? Have you even defined your goals? Take a few minutes and conduct personal evaluation.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
With prices continuing to skyrocket, Michigan residents and business owners search for the reason behind the perpetual inflation, and when it might end.
Global issue as well
Many economists and local business leaders say increasing costs for businesses are the driving force behind rising prices. And that continuing inflation is a concern not only statewide, but nationally and globally as well.
As the world emerges from the emergency status of the COVID-19 pandemic, business owners and consumers are fighting against ongoing residual effects, namely inflation. Due to supply issues during the pandemic and current labor shortages, prices for everyday goods have skyrocketed, with consumer prices up 9.1 percent over year end June 2022. U.S. Bureau of Labor Statistics
Exercise patience
Despite the economic concern, Keith Morgan, president and CEO of the Wyoming-Kentwood Chamber of Commerce, advises community members to, “Temper your decisions…exercise patience. It’s not as bad as they make it seem…and it’s not as good as some people think it may be.”
Keith Morgan, president and CEO of the Wyoming-Kentwood Chamber of Commerce. (Courtesy)
In regard to business owners, “The biggest impact right now that businesses need to be aware of, the key is, preparation,” said Morgan to WKTV. Most small businesses are not prepared for crises such as a pandemic. “A business is going to typically have a 6-month runway (also known as a reserve) if they are in a good position…some may have 12 months. Very few are going to have 24 months.”
With the pandemic lasting longer than businesses anticipated, several owners found themselves floundering.
“What a lot of people are experiencing,” continued Morgan, “is that they are having to pivot. They are forced to reevaluate their paradigm. The businesses that have done well are the ones that are finding ways to provide different services or provide different products…and finding avenues to be more efficient.”
Government help available
Morgan also revealed that government help is available for businesses, but that many organizations are hesitant to take advantage of different funds that are available, such as ARPA (American Rescue Plan Act) funds, due to not having information about those advantages.
Local Chamber of Commerce networks offer professional advisors and relationships business owners can take advantage of, and that can help them understand that information so they can make better decisions.
Some aspects of the inflation crisis, however, cannot be avoided.
Labor shortages
Labor shortages have had a large bearing on inflation. With fewer workers available for businesses to draw on, they are finding the need to offer incentives, such as higher pay rates and benefits. Something that will make a “significant difference” in employer expenses, Morgan said.
Tim Mroz, senior vice president of Community Development for The Right Place. (Courtesy)
Tim Mroz, senior vice president of Community Development for The Right Place, agrees that one of the prevailing struggles is “the ability for employers to stay competitive with wages, and employees to keep up with the cost of living.”
Offering such incentives, however, increases cost to the employer. “Companies just can’t eat that total cost,” Morgan said. “So that cost has to be passed on to the consumer who is buying your service or product.”
The company that offers that service or product now must raise that rate to be able to account for the additional cost to their business. Add in meeting profit margins and expectations from investors, and that cost increases exponentially.
Supply chain issues
Supply chain issues are also a large factor of inflation.
“The good news is that we are seeing progress,” Mroz continued. “I think we’ve gotten beyond the emergency situation we were in a year ago during COVID. The supply chain issues we’re seeing today are a little more targeted at certain materials.”
Those manufacturers who are still experiencing supply issues, however, are now finding the problem compounded by rising prices when they can acquire those materials.
“Steel prices are still a challenge, both for construction steel and coiled steel.” At local steel manufacturers, Mroz said, “There is very little inventory. What they do have they are moving as fast as possible.
“Since 2020 to current quarter, construction prices have just about doubled. If it’s not under control soon, we’re going to start seeing pullbacks in the construction and development industry. That’s concerning because we need housing.”
Jason Parsons, senior construction project manager for Habitat for Humanity of Kent County, told WKTV that “All of the materials I have delivered to site, they are all adding a fuel surcharge onto the bill, which didn’t used to be there. We are getting regular cost increases on windows, siding, roofing.”
Parsons says it is not any one thing causing the increase.
“I think it’s the supply chain problems, it’s the delivery chain and trucking costs, manufacturers are having a difficult time keeping enough labor. They aren’t producing as much as they were, so they are charging more for what they are producing.”
Compounding the problems brought on by a lack in available materials is a shortage of truck drivers. That shortage has cost site workers delays as they wait for materials to be delivered.
“It’s a synergistic type of system that one thing doesn’t just affect one other piece,” Morgan explained. “One thing can affect 17 other pieces down the road, and they all work together.”
A social aspect also comes into play due to a growing mentality that there is no better time to raise rates because people are expecting it. Morgan mentioned the current gas market, observing that prices are unlikely to decrease back to yesterday’s normal, even if cost improves for the buyer because “(consumers) are used to paying it, and willing to pay it, and are paying it,” thus increasing the buyer’s profit margin.
These thoughts are supported by a current podcast, Trend Talks with ITR Economics, specifically episodes from “The Consumer, Interest Rates, and Gas Prices” with Alan Beaulieu, March 18, 2022, and “Pricing at the Peak” with Connor Lokar, January 14, 2022.
Over the 12 months ended June 2022, the Consumer Price Index for All Urban Consumers increased 9.1 percent. The 9.1-percent increase in the all items index was the largest 12-month increase since the 12-month period ending November 1981. U.S. Bureau of Labor Statistics
Will consumers see a decrease in prices?
Morgan says yes, but it will take time.
“Inflation will decrease due to what the market can bear,” he explained. “Prices are based off of what people will buy.”
Parsons agreed.
“It’s all supply and demand. If supply increases and demand goes down, the prices will come down. They have to.”
Federal Reserve taking action
The Federal Reserve has already taken action by purposely increasing their rates.
“The Federal Reserve has the most impact on the value of a dollar,” Morgan said. “They can change the numbers, which will tighten up the financial market and the base has to follow suit. If they (Federal Reserve) tighten up the economy, and people aren’t able to go out and get as many loans, they can’t do as many things, then that will typically drive the prices back down because you have a surplus in the market.”
No easy fix
Even so, Morgan believes it will be a minimum of a year to bring the economy back down from inflation, with economists saying it could be as long as 18 to 24 months. But Morgan cautions that a lot can happen in 24 months, and to “temper your plans and expectations. There is really no easy fix.”
Both Morgan and Mroz agree that Michigan is not alone in its struggles.
A global problem
“This isn’t a Michigan-specific issue,” Mroz said. “It’s a national issue, I would argue that it’s even an international issue. Everybody is dealing with this right now, with global finance as connected as it is.”
Close to retirement?
When asked how the average consumer can prepare or help themselves right now, Morgan said each individual and family situation is different and dependent upon their needs but did suggest that those close to retirement pull their money from the market now and put that money in a savings account with very low risk.
“Economists are saying that, unless you have a 2-year runway where you can stay in the market without making any change, you need to get your money in a place where you’re not going to earn much interest, but at least you’re not going to lose much either, because the markets have trended downward,” Morgan said.
Despite the difficulties many individuals and business owners face, Morgan offers hope.
“We are not in an economy where we don’t have money,” Morgan explained. “We are experiencing inflation and it’s a concern, but it’s not such a concern to the extent that we are going to change our buying habits or change our lifestyle.”
If you’re a woman in or near retirement, let me ask you this: “How do you plan to take what you’ve so diligently saved and turn it into a lifetime stream of dependable, predictable, tax-advantaged income?”
Five reasons women should consider using annuities to create more prosperous, less stressful retirements. (pxhere.com)
If you’re like many of us, you probably don’t have a ready answer to this question. That’s because you’ve been busy doing “all the right things.” You’ve been working, saving, maximizing your 401 K, paying off debts, being a caregiver, running a household, etc. It’s likely you haven’t really had time to think about what to do when the time comes to stop working and live on what you’ve accumulated.
I want to suggest: Take some time to consider annuities carefully. After spending time studying this often overlooked, but powerful financial vehicle, I’ve come to believe that nearly every woman planning on retiring could benefit from the features found in annuity products.
Here are a few reasons you should consider an annuity when it comes time to empty your “accumulation” bucket.
An annuity creates guaranteed income for life. When you deposit a lump sum into an annuity, you enter into a contract with an insurance company in which the company guarantees you income for the rest of your life. This will eliminate a chief concern of many women entering the retirement phase of their lives, namely, running out of money too soon.
Flexibility and customization. Annuities have come a long way in the past few years, offering a full spectrum of long-term care and inflation protection features. No longer are you constrained to a “one size fits all” annuity. These new kinds of annuities now provide for a new level of customization, safety, and functionality.
Annuities provide predictability. Many people, especially those in their pre-retirement and retirement life stages, want to know exactly how much income they will be available when they retire. If predictability is one of your top priorities, then an annuity can provide that.
Zero maintenance. When you agree to the terms of the annuity contract, you’ll be assured of a steady income for life even if you live for another 50 years after retiring. An annuity is one of the few available financial products you can actually “set and forget.” there is nothing to keep tweaking or moving around; no more crossing your fingers every time the market hiccups.
Tax benefits by using an annuity for a portion of your nest egg allow that portion to grow tax-deferred, just like the money in traditional retirement accounts. That means if you don’t take out all the money for a while, you could see a significant tax reduction in retirement.
There are many other reasons that an annuity, while it may not be for everyone, is still worthy of your attention as you enter retirement. Partnering with an annuity specialist will allow you to examine these safe money alternatives more thoroughly to see if they will work in your particular situation.
If you’d like to know more about how women can use annuities to create safer, saner, more prosperous post-work lives, email or call me, and I will be happy to send you educational information to help you make the right decisions about your retirement blueprint.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
The IRS restricts specific investment options for an IRA.
These restrictions do not allow investment in collectibles, antiques, and other assets. Here is a list: If an IRA invests in collectibles, the amount invested is considered distributed in the year invested. The account owner may have to pay a 10% additional tax on early distributions.
Learn what a prohibited investment in an IRA is important in retirement planning. (pxhere.com)
Here are some examples of prohibited assets held in an IRA: • Artwork • Rugs and other home furnishings • Antiques • Precious metals, some exceptions for gold bullion • Gems, diamonds, other precious stones • Stamps and coins as collections • Alcoholic beverages • Certain other tangible personal property based on the exact nature of the asset • A partnership or company that owns sells or buys these items could be a named asset within an IRA. • Insurance products are also not allowed except for annuities.
Assets that are allowed to be held in an IRA include: • Stocks • Bonds • Mutual funds • Real Estate Investment Trusts • Brokerage accounts • Banks products such as CDs and savings account • Insurance company annuities
If your IRA is engaged in any prohibitive practice, you may be exposed to being taxed as a distribution and also be liable for a 10% penalty.
Remember that an IRA is just a tax-deferred receptacle for invested assets. Almost any category of investment can be placed there, and different IRA custodians make their money by selling and managing these assets. If you open one at a bank, you’ll be able to invest in CDs or savings accounts. If you open it at an insurance company annuity could be a viable option. If you select to open an IRA at a brokerage and mutual fund company, you’ll be able to invest in mutual funds, stocks, bonds as well as other options.
Always make sure your IRA matches up with your goals, and if you do not fully understand the investment options available to you, get a second opinion. Owning an IRA can be a massive advantage to you in later years, make certain your IRA is designed for your specific period and goals.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management
First and foremost, I want to let you know that I would never try to sell you on anything. I have learned in my 40 years of experience that if I try to talk you into something, anybody can come right along and talk you out of it so, that is not my objective. However, with math, science, and reason, I would like to reaffirm some very important facts and figures about your retirement planning:
Math and science are key in helping with retirement planning. (pxhere.com)
1. We all know the market is cyclical, it goes up, and it goes down. We have had the longest upmarket, “Bull Market,” in the history of the stock market; over the last nine years. Thus, Reason alone, tells us that we are due for a market correction, “Bear Market.” Math and science prove that we are due for a soon coming market correction. Just to name a few of the catalysts of a possible Bear Market, but not limited to, are these indicators:
• The most significant “Buyback” in the history of the market took place in the last quarter of 2018. A “buyback” is essentially corporations run out of ideas to increase stock market shares and dividends of their company. They are buying back their stock held in foreign countries and inflating their profits. As of October of 2018, there were over $800 billion in stock buybacks, a stock market record. Corporations used funds from $2.6 trillion dollars sitting overseas.
• The tariffs imposed on foreign countries in June 2018.
• The housing market, as interest rates increase, so will adjustable rate mortgages increase. A Zerohedge chart reflects that home-builder stocks are already dropping as lumber prices forecast a drop in the housing market.
• Interest rates tend to go up when the federal reserve unwinds its balance sheet and adds to the supply of Treasuries and mortgage-backed securities on the market. When interest rates go higher, stock valuations need to go down with a lower P/E ratio. (Profit /Expense ratio)
• Federal Reserve policy. A JP Morgan study reflects that the Federal Reserve is decreasing its balance sheet of treasuries and mortgage-backed securities by $50 billion a month, which is known as Quantitative Tightening, which is projected to continue to at least the end of 2020.
• Valuations. The United States Stock Market is the most expensive in the world at this moment. The Buffett indicator is flashing red with a total market capitalization vs. GDP (Gross Domestic Product) of 150%. Studies reflect that any ratio above 115% is an indicator that the market is significantly overvalued.
2. Historically the S&P time-line for recuperating from market corrections is between 13 to 22 years. Studies reflect that 64% of the time, the S&P is either losing ground or making up losses. Let me ask the question, “Going into retirement, do you want the 64% chance of a market correction and taking 13 to 22 years to recuperate the retirement savings you’ve accumulated over your lifetime?”
Mortality tables reflect that one retiring at age 65 will live 20 to 25 years.
3. Mathematically, it’s a proven fact that if a retiree experiences double-dipping (losing value in their account and drawing income from their account simultaneously) at the beginning of their retirement, they will outlive their retirement funds before they outlive their retirement life. This is known as the “Sequence of Returns.” Also, add the devastating fact of fees, the account now has triple dipping!
4. Psychological studies prove that retirees with a guaranteed, known, and predictable source of income live a much happier, stress-free, and worry-free retirement life.
5. The Fixed Indexed Annuity (FIA) relieves merely the risks of outliving one’s money and the burden of trying to manage and chase market returns and trying to avoid market losses of managing a retiree’s portfolio. It gives a guaranteed, predictable income for life as well as a projected income, based upon only upside market growth. It automatically tracks this upside market growth.
I trust that the above information on math, science, facts, and figures will assist in journeying into a peaceful, stress-free, worry-free retirement.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
Transitioning from being a saver to a spender means you will be required to not only keep close eye on your investments, spending and taxes, but for also creating your own “paycheck.” (pxhere.com)
“Transitioning from saver to spender can be a disconcerting shift for many seniors. A more systematic approach to spend-down can help.”
Transitioning from being a saver in the accumulation phase to a spender in the spend-down stage of your financial life means you will be required to not only keep a close eye on your investments, spending, and taxes but for also creating your own “paycheck.”
This paycheck might result from living off the interest or dividends from investments for some retirees. Others may prefer more predictable income sources, including annuities and Social Security. These “safe money” assets can help you achieve more peace of mind and perhaps cover your basic living expenses.
Shore up your emergency savings
It’s crucial to take a systematic approach to the problem of how best to spend your money in retirement. You should ensure you have enough money to cover unexpected expense to last at least a year. Suppose you’re worried about having to sell off investments in a bear market to cover emergencies. You might want to discuss rebalancing your portfolio with your advisor, perhaps using more liquid assets.
Include predictable income streams, using annuities and life insurance
Most planners understand, at least on a fundamental level, the power of annuities to help their clients avoid running out of money when they retire. After all, almost every financial services company offers annuity products, and they have done so for many years. Modern retirement research has produced volumes of data-based reports confirming the value of an annuity in a retirement portfolio. Life insurance and annuities may suit retirees who desire the protection of their principal, a predictable stream of lifetime income, long-term care options, or want to leave a legacy to a family member.
Despite the positive data surrounding annuities, many advisors are reluctant to offer them to their clients. This reluctance is often because they believe there will be pushback from clients who have heard negative things about the product through the media or online.
Many popular financial entertainers such as Dave Ramsey have been openly antagonistic about annuities and continue to spread myths and misconceptions to their viewers.
However, continuing changes in retirement plan structure and funding of employer plans have caused more people to dig deeper into safe money and income products to create their pension plans.
Since 1974, the traditional defined benefit (DB) plan, which provided retirees with benefits based on final salary and years of service, has disappeared from the private sector. Replacing it is the direct contribution plan in which employees and their employer regularly contribute to accounts in the employee’s name. Direct contribution plans benefit companies by lowering their expenses. But they place the burden of retirement success squarely on the shoulders of the individual. If you participate in a workplace plan, both longevity risk and performance risk have been shifted to you. Standard direct contribution plans do not guarantee your account will provide lifetime income and running out before you die is always a distinct possibility.
That’s why most retiree portfolios will benefit from strategically designed insurance and annuity products. Strategically designed life insurance is another way to create more predictable, tax-advantaged revenue streams. Properly structured, life insurance offers investments like stocks, bonds, CDs, etc. Annuities relieve the consumer of the need to set aside additional money to offset potential risk and fees for managing the account.
If fear of managing your retirement accounts paralyzes you and causes you stress, simply pass it to a risk bearer, an insurance company. Let the annuity provide you with a safe and secure income.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
by Redfin, a full-service real estate brokerage, found that 68.8% of home offers written by Redfin agents nationally faced competition in February. (pxhere.com)
LANSING – “Pretty much every offer I put was a shot in the dark, where you’d just cross your fingers and pray and hope that it gets accepted,” said Corbin Holwerda of Grand Rapids.
Holwerda is a first-time homebuyer who has been looking for a house in Grand Rapids since mid-January.
“I’ve put in seven or eight offers, and it’s really tough because half of those I’m losing to all-cash offers,” he said. “I’m still a young adult. I don’t have $250,000 in the bank that I can just front and put up for a house.”
A recent study by Redfin, a full-service real estate brokerage, found that 68.8% of home offers written by Redfin agents nationally faced competition in February. That’s the highest share reported by its agents since at least April 2020.
“Even if we are able to go above asking (price), there are still people waiving inspections and going $50,000, $60,000 or $70,000 above asking in some cases,” Holwerda said.
According to a new Congressional Research Service report, the main factor causing record-high home prices is that more people are looking to buy houses than there are houses for sale.
Cash offers can help the sale of a home move more quickly. (pxhere.com)
It’s a question of supply and demand, the report said.
“We have people selling homes with 40 offers on one home,” said Shirley Smith, the executive officer of the Hillsdale County Board of Realtors.
“There is a huge amount of competition right now, and the reason for that is because inventory is low. House prices have been going up the last few years and inventory has not increased appreciably,” Smith said.
“I think we’re also seeing more cash offers because those are the offers that get accepted more quickly,” she said.
Sometimes offers are contingent on the sale of the buyer’s current home, a bank loan or inspections to be done, and that can take more time, she said.
But cash offers move the process along more quickly.
“Generally, when we have high housing prices like this, it doesn’t go on forever. I think I, and most Realtors, expect that in the not-so-distant future there will be a change in the trend,” she said.
According to Smith, projections from the National Association of Realtors say housing prices may increase 5% in the coming year, which is much lower than several years past.
“That might be a tapering off in the market,” she said.
According to the Case-Shiller Detroit Home Price Index, home prices in Detroit have gone up about 8.6% per year since January 2012. But from January 2021 to January 2022, prices rose 13.9%.
That can be compared with neighboring states’ large cities, like Cleveland, rising 13.3% and Chicago, rising 12.5%. Nationally, home prices rose 19.1% from January 2021 to January 2022, according to Case-Shiller’s national data.
“The interesting thing here (regarding the increases) is that in traditional years, only 3 to 5% of the housing on the market is actually new houses,” said Wayne State University economics professor Allen Goodman.
“As a result, most housing supply occurs kind of above the middle of the market. We don’t allow people to build new, low-quality houses,” said Goodman, who specializes in housing and health economics.
He said some new houses are resold multiple times and “as a result, the housing gets toward the upper end of the market, and what’s left there is sometimes said to filter down to other buyers.”
“A lot of this goes back to COVID, in part,” said Goodman. “To keep the economy growing, the federal government and Federal Reserve banks have had what were historically low interest rates. What it meant was that people who wanted to buy houses were faced with mortgage rates of like 3%.”
A combination of low interest rates and a smaller-than-traditional supply lead to increases in the price of housing. (pxhere.com)
“A combination of low interest rates and a smaller-than-traditional supply lead to increases in the price of housing,” Goodman said.
Monitoring estimates of the value of his own Huntington Woods home over the years, Goodman said it lost half its value from 2007 to 2009.
The value can vastly change by month. In one recent month, his home’s value was estimated to have increased around $30,000, but in a previous month it was estimated to have dropped $20,000.
“But really over the past year, it’s pretty much been the same, at least according to Zillow,” he said, referring to the online real estate-market national company.
Capital News Service is provided by the Spartan News Room located at Michigan State University. CNS reporters cover state government for member newspapers and digital media outlets across the state of Michigan.
Many people are shocked at how much of their tax-deferred balances will be erased by current taxes when funds are withdrawn. (Supplied)
Because of the accumulation benefits of tax deferral, many individuals have successfully created substantial IRA or 401(K) accounts or other qualified plans.
Many people are shocked at how much of their tax-deferred balances will be erased by current taxes when funds are withdrawn. It is not uncommon for these accounts to have amassed seven figures of total dollars. It is also usually the case that little attention has been focused on what will happen to one’s hard-earned dollars when taking money out of the Plan.
Reductions Due To Taxes Can Be Dramatic
The tax-caused decrease in total assets going to family members can be dramatic. For example, we recently reviewed a client situation where the plan holder had a $6 million balance. The client wished to begin distributions at age 70 ½. Further, the client did not require any distributions to maintain their lifestyle and wanted all the funds to go to children. The client was disappointed to learn that, under the client’s current structure when distributed over 10 years, the $6 million would be slashed because of taxes by $2.6 million and only yield $3.4 million net proceeds to the beneficiaries.
The $2.6 million of asset erosion occurs because all funds coming out of a qualified plan are fully taxable as ordinary income. And, contrary to common belief, assets in an IRA do not benefit from a step-up basis when passed on. Thus, while this case was a reduction of some 43%, other plans can be crushed by as much as 75% because of income and estate taxes.
The existing Plan had other vulnerabilities, as well. One was the assets were all held inequities subject to significant drops in value. Over a lengthy period, the probability that such a reduction will occur is substantial.
How To Increase Net To Beneficiaries Without Risk
Fortunately, a solution that could produce guaranteed results was possible in this particular situation. We set up a plan where taxable distributions from the IRA will be used to purchase the appropriate type of life insurance with the family named as beneficiaries. The client and the client’s family can be much better off with this solution because:
Assets are shifted from taxable to non-taxed.
Total net after-tax assets to the family are significantly increased.
The increase in assets is immediate.
There is no need to enter speculative investments to achieve the gain.
The value of the account is not subject to market losses.
The results are guaranteed by some of the most substantial financial companies in the world.
The entire Plan can be implemented on a set-it and forget-it basis.
Implementing IRA Rescue For Your Qualified Plan
Each rescue of an IRA or 401K or other qualified plan is custom-made for your circumstances. For individuals with separate plans and assets, net benefits can increase from some 25% of asset value to many times the asset value. For married couples inheriting each other’s IRAs, the after-tax yield can be much higher than otherwise. IRA Rescue can be achieved by converting a client’s weakest assets – those with the most significant tax liabilities – to non-taxed assets.
And while a plan’s asset value is significantly increased immediately, the tax liability on distributions from the Plan is spread over time, much to the client’s advantage.
All plans can and should be coordinated with your accounting and legal, trust, and estate advisors, and we do that as a matter of course.
A complete solution is available with plan distributions able to be executed on schedule, trustees guaranteeing that policy premiums are paid as required, trustees delivering gifts to beneficiaries, and taxes able to be paid at the funding source. These solutions can truly be established to set and forget while delivering much more financial benefit to those for whom a client wished to provide financial security.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
By David Stanley Integrity Financial Services, LLC
Hurricanes to the weather can impact the U.S. economy. (pxhere.com)
Hurricane Ida, COVID- 19 and a February winter weather disaster in the United States and Mexico; many other catastrophes and worries abound. What issues currently confront the U.S. economy? The answer is multi-level but can be summed up as:
1) The collapse of an economy (potential)
2) Inflation
Are your important retirement dollars safe? If you have a fixed/indexed annuity, your money is still protected. Think of the simplicity the annuity brings to life. No fees, no loads, no market risk. It is not stocks, bonds, or mutual funds, which rely on fluctuating investment trends. It’s dependable fixed/indexed annuities that will fund Baby Boomer retirement.
Safety is not an issue with fixed annuities. The insurance company doesn’t borrow money to make risky or speculative investments. What keeps annuities safe? Think of it this way. Are you worried about your homeowners, auto insurance, life insurance company going under? No. Remember, annuities are not speculative investments, but deposit accounts backed up by cash on hand.
The insurance industry was “the last man standing” during the Great Depression when banks and investment firms failed. Then as now, this sector remains the last bastion of financial freedom. The fixed annuity company already has its portfolio to back these contractual guarantees.
Annuities provide a level of economic security that cannot be duplicated by other investments like stocks, bonds, CDs, etc. Annuities relieve the consumer of the need to set aside additional money to offset potential risk and fees for managing the account.
If fear of managing your retirement accounts paralyzes you and causes you stress, simply pass it to a risk bearer, an insurance company. Let the annuity provide you with a safe and secure income.
Dave Stanley is the host of Safe Money Radio WOOD1300 AM, 106.9 FM and a Financial Advisor and Writer at Integrity Financial Service, LLC, Grandville, MI 49418, Telephone 616-719-1979 or Register for Dave’s FREE Newsletter at 888-998-3463 or click this link: Dave Stanley Newsletter – Annuity.comDave is a member of Syndicated Columnists, a national organization committed to a fully transparent approach to money management.
