Why You Should Prioritize Saving for Retirement Care

January 25, 2021 17:18 newlambertagency

As per a report from National Institute on Retirement Security, about two out of three 21- to 32-year-olds haven’t started retirement savings.

Why is that so?

For one thing, the approach and attitude towards retirement have completely changed. The young working generation doesn’t believe in waiting for decades to live the “good life” or put a pin on their dreams for a day that may or may not come.

There’s nothing wrong with this approach. But there is a basic miscalculation in decision-making with not starting as early as possible when it comes to planning for your financial future.

That’s because the earlier you start, the easier it is.

Although retirement care is the last thing in this generation’s mind, just taking an initiative could prove to be extremely beneficial in the long run.

Here’s why:

  • The longer money works, the better the potential returns.
  • Retirement savings offer a chance to reduce taxes.
  • A nest egg increases options beyond retirement.

Here’s how you can prepare for retirement care:

Increase your knowledge

Whether you’re planning to pay for retirement care with your personal savings or via government assistance, you must be aware of the potential costs and the various effective ways to pay for your retirement care. For instance, Medicare doesn’t pay for on-going long-term care, but Medicaid pays for some of the healthcare costs depending on your eligibility.

Develop a plan

The ideal thing to do for your retirement is to plan how much money you need to save as early as possible. You must have a realistic plan that’ll help you save money without taking anything away from your present living situation. Considering retirement options can be overwhelming so seeking help from a financial planner can help ease that burden.

Communicate your references

The smarter way to prepare for retirement care is before you or a loved one becomes ill, requiring urgent care. If you think you might become a caregiver in the future, you should start learning about subjects such as Medicare, living wills, and powers of attorney. It’s also best to communicate your preferences to your family members – about how you would like to receive care or what kind of retirement care would you prefer.

And saving early for retirement will not only help you with retirement savings but also developing an early habit of not spending 100% of your paycheck, you’ll be better positioned to save for other goals like:

  • Building your own business.
  • Buying your place.
  • Going on the trip of a lifetime.

The bottom line is the younger you start saving and investing, the less you have to work to have a financially secure future.

Is Funeral and Burial Insurance Worth It?

September 28, 2020 04:14 newlambertagency

Let’s be honest. No one likes to think about their death or death-related situations. People already have enough on their plate to think about the financial aspects of their funeral.

Death is an uncomfortable subject. But once you have planned your future and made the necessary arrangements to execute those plans, you’ll have one less thing to worry about.

There are life insurance plans that cover burial or funeral expenses while some plans are specifically created for any type of burial you want or any specific arrangements that might interest you. So if the question, ‘is burial insurance worth it?’  or ‘what exactly are they?’ crosses your mind, then let us put your thoughts at ease.

So what is Funeral/Burial Insurance?

Also known as a burial or final expense insurance, Funeral insurance is designed to be a small policy that ranges from $5,000 to $25,000. The policy is paid upon the insured member’s death to either a designated recipient, such as the executor of an estate or a family member making funeral arrangements. You can also make prior arrangements to pay a funeral home directly that will then carry out all the required arrangements.

What do they cover?

As the name implies, funeral insurance covers the expenses that are directly related to the funeral ceremony – cremation or burial, depending on your preference. The expenses cover a headstone purchase, the cemetery plot, or an urn or other container for your ashes after cremation.

However, it does not cover hospice care, medications, or anything else you may need before you pass. Just like life insurance, the policy is paid out only after your death.

It’s really important that you choose the right person to handle your funeral arrangements – a person who will use the money for the purpose they’re intended for. Because, theoretically, your family members are not legally obligated to use the money for your funeral – they can use the money for anything they like.

How much do they cost?

The most common funeral insurance plan covers $10,000 and on an average, the policy costs $50 per month, However, depending on your age, gender or health, the monthly premium can be higher or lower.

But it must be noted that many financial and insurance experts say that this insurance is a “last resort” type of coverage. Because the same monthly premium paid toward a term life insurance policy can get you much higher coverage than a funeral or burial policy would pay.

That is why experts say that such type of policies are meant for those who cannot qualify for a term life policy, and have no funds saved up for their funeral.

Also, people often mistake burial insurance as a separate product from funeral insurance, but it’s essentially the same. However, the arrangements made with a funeral home before your death falls under pre-need policies that payout at your death, and not before.

Do I Need Life Insurance If I Have a Pension

August 24, 2020 11:38 newlambertagency

People often go for life insurance when they’re in their early 30s. It seems to be the ideal time as they have their whole life ahead of them and naturally, anyone would want to feel secure. But what about the people on the other spectrum? People who have retired, their children are grown and are settled. They have put together a reasonably solid income plan with Social Security, pensions, and annuities supplemented by investments and retirement accounts. They often wonder, do I need life insurance if I have a pension?

Well, first of all, life insurance is intended to help the beneficiaries cope with the expenses incurred from the loss of a loved one. And life as we know it is unpredictable. It’s important to be ready for anything that life throws at us and life insurance could be the answer to that.

Life insurance safeguards you from any hardships of financial loss and the primary concern is the loss of income. So if your family remains secure after your passing and they don’t experience any financial loss with the support then logically there’s no need for life insurance.

But what if that’s not the case?

Do you need life insurance?

You need to ask yourself, Will someone experience a financial loss when you die? If the answer is no, then you don’t need life insurance. For instance, let’s say you have a steady source of retirement income from investments and pensions and you’ve chosen an option that pays 100% to your surviving spouse. Then your death wouldn’t have any effect on their income.

Do you want life insurance?

Even if there will be no substantial financial loss experienced upon your death, you may like the idea of paying a premium now so that family, or a favourite charity, will benefit from your death. Life insurance provides you with an option to leave a substantial amount to a charitable cause, children, grandchildren, nieces, or nephews. So life insurance after retiring could be a great way to spread happiness.

Situations Where Life Insurance Is Needed

Everyone has a unique situation regarding their finances but below are some considerations for continuing life insurance policies:

  • Retirees who will lose a substantial portion of the family income when one spouse dies
  • Families or couples in their peak earning years that are saving for retirement
  • Parents whose children are not adults
  • Business owners or business partners, and employees employed by small businesses
  • Families with a large estate that is subjected to estate tax

 

Simply put, for people that have substantial financial support regardless of any loss of income, life insurance after retiring might not seem like a necessity. But for people who like to go the extra mile for protecting their families, life insurance is the right step.

Annuities: Insurance for Retirement

August 19, 2020 12:36 newlambertagency

Do you have a retirement plan? If not, then maybe you should start planning. And if you’ve wondered about annuities, then you should continue reading and put an end to your queries.

You’ve probably heard about annuities before—but have you ever considered adding them to your retirement strategy? They remain often ignored and frequently neglected among investors, but Annuities may be the best retirement product that hardly anyone buys.

What are Annuities?

Simply put, an annuity is a contract between you and an insurance company. In return for the money you pay to buy the annuity (which is called a premium), the insurance company will give you a series of payments that are guaranteed to last for a time you select in advance. Thus it could be said that they’re retirement insurance.

An annuity could pay you for your entire life – even if you live to more than 100 years – for your spouse’s entire life, or for a set time that you select, depending upon the type of annuity. And what’s even more appealing is that you can withdraw funds from some types of annuities.

To know more about them, let’s look at the annuity types.

Types of Annuities

Immediate Annuities allow you to turn a lump sum of money into a stream of guaranteed payments that can last for your lifetime, or a set time, depending on your preferences.

Fixed Annuities guarantee your premium payment and guarantee a fixed annual rate of return for set periods until you’re ready to start getting payments.

Variable Annuities are long-term financial products designed for retirement planning that allows you to invest in the market. They provide you with growth potential when the market is up, but can also mean you can lose money when the market drops.

Deferred income annuities allow you to take money that you have today and turn it into a guaranteed stream of lifetime payments in the future.

Now, let’s compare annuities with life insurance or should we say, annuities vs. life insurance.

Annuities vs. Life Insurance

Annuities are generally offered by Life insurance companies and investment companies, Life insurance deals with mortality risk i.e. the risk of dying prematurely while Annuities, on the other hand, deal with longevity risk, or the risk of outliving one’s assets. If the annuity holders survive to outlive their initial investment, it makes Annuities a risk to the annuity issuer. That is why there’s concern over Annuity issuers hedging longevity risk by selling annuities to customers with a higher risk of premature death.

Even though annuities are known to be complex, they can be an extremely beneficial part of your retirement plan.

Tips to Approach Retirement Savings Plan for Women Entrepreneurs

July 13, 2020 10:07 newlambertagency

No matter what stage of self-employment you may be in, thinking about how to make your investments last in retirement should be a top priority.

Saving for retirement can be challenging for anyone, but especially for business owners who invest much of their own savings and earnings into their companies.

And if you’re a women business owner, having a retirement plan in place is even more critical as in general, women live longer than their male counterparts.

To set up a robust retirement plan, women business owners must consider the following:

Develop a plan for caregiving responsibilities

Because women are often the primary family caregivers for children and ageing parents, women business owners need to have a plan in place for how to manage and share these responsibilities. Building a support network is key.

Considering the financial ramifications of work absence is also advisable since less income means fewer retirement savings — and a prolonged period away from work could negatively impact the future success of the business.

Start investing early

In the initial phase of a start-up, companies are cash poor and hence business owners won’t have the required money for investing in their own retirement. And even as a business gets its legs and ramps up, entrepreneurs often focus on the growth of their business and end up reinvesting.

But at such a lean time, women entrepreneurs must consult a financial advisor who can make recommendations for their personal retirement savings — as well as for their business. If you start early, the stronger would be your retirement plan and your savings would be that much more alluring.

Invest cash distributions in retirement vehicles, not the business

When you start to receive a considerable cash distribution from your business, it would prove advantageous to invest in stocks, bonds and non-traditional investments so as to diversify away from the single enterprise.

Of course, it would not be prudent to invest business profits in these same investment vehicles. Businesses require a certain level of liquidity to meet their financial obligations and having funds tied up in investments like long-term bonds, for example, could prove to be problematic.

Reduce tax liabilities through HSAs

If you’re a female entrepreneur with the ability to pay for upfront medical expenses through a high deductible plan, the tax advantages of health savings accounts (HSAs) are many:

  1. a) if the contribution is made as a payroll deduction, no taxes are paid on the contribution,
  2. b) investment earnings in an HSA account are not taxed, and
  3. c) qualified health expense withdrawals from an HSA account are tax-free.

By adopting these strategies to balance retirement savings with business growth and set up a conducive ‘women retirement plan’, female entrepreneurs can look to their futures more confidently — which can only be good for business.

Tips to Help You Boost Your Retirement Savings – Whatever Your Age Is

July 9, 2020 12:49 newlambertagency

It doesn’t matter if you have just begun your work life or are on the verge of bidding goodbye to your beloved job, or are planning for retirement; it is never too late for some savings.

But it goes without saying that for significant savings, you need to start your investment at a much earlier stage of your life.

Retirement is one of the biggest and most common goals that many people have. After all, your retirement savings determine how comfortably you’ll live and whether your money will outlive you.

Making the most of your retirement savings is essential if you want to build a nest egg that will withstand the risks of inflation, market turmoil, and your unexpected longevity.

And if you’re one of the millions of Americans who are on the other side of 40 and don’t yet have a substantial retirement nest egg, don’t despair. It’s not too late, but you need to implement some strategies that will put you back on track to an advantageous retirement solution.

Read on to know some of the best retirement saving tips.

Start today

The best piece of retirement investment advice is to start today. The longer your money has to grow, the more you’ll get out of compounding returns. Even if you can’t set aside a lot of money immediately, any amount you invest today will have the chance to compound. Over time, even a small start can make a difference.

Begin today with as much as you can, and then increase your retirement account contributions as your finances improve. The longer your money has to grow, the bigger your nest egg will be.

Plan and estimate

Roughly estimate how much money you’ll need to live on in retirement. Don’t get bogged down by conflicting advice on how to calculate the amount. A ballpark figure is a good starting place.

Knowing how much you’ll need not only makes the process of saving and investing easier but also can make it more rewarding. Set benchmarks along the way, and gain satisfaction as you pursue your retirement goal.

Contribute to your 401(k)

Contribute the maximum amount allowed for you to your 401(k) every year. You may want to contact a financial advisor or tax professional for further information on your specific situation. If you have matching contributions from your employer, be sure you take advantage of this benefit. These investment plans boost your retirement savings and may also give you tax savings now or when you start withdrawals, depending on your choice of plan type.

Automate your contributions

It’s not just about adding to your accounts on occasion. Consistency is a big part of growing a nest egg designed to see you through your entire retirement. One way to make sure you’re investing consistently is to automate your contributions.

The easiest way to automate is to have money taking from your paycheck automatically each month. If that’s not an option, set up an automatic transfer, or set up an automatic investing plan through your broker. That way, you prepare for retirement without having to think about it.

How To Choose a Good Retirement Solutions Plan

June 16, 2020 09:10 newlambertagency

Retirement planning is something that everyone must take seriously. Planning for an easy old age and a financially secured retirement is what we all look forward too. It is consistently savvy to begin arranging your retirement subsidize at the soonest. Here are a couple of vital things to remember while picking an insurance-based retirement plan:

Rate of profitability ought to be more noteworthy than the pace of expansion

Making arrangements for retirement is a drawn-out budgetary objective. While contributing to this period, individuals frequently face a significant test as to how to shield speculation from capital disintegration. Swelling reliably acts against the estimation of your riches and speculation over some time.

Target sufficient annuity pay

Plan your retirement so that you gain benefits salary which would be adequate for both of your wards. Your annuity salary should proceed for your wards considerably. One ought to likewise guarantee that pay after duty derivation is sufficient to meet your standard costs.

Try not to overlook complimentary venture benefits

While choosing retirement solutions, take a look at the extra element offered with it. One may get benefits like the premium to postpone off if there should be an occurrence of death of the proposer/strategy holder and continuation of ordinary progression of annuity pay with no break. One can likewise check benefits like higher spread for incidental demise, basic sickness benefits, and so on.

Liquidity is significant post-retirement

Post-retirement, your reliance on liquidity would increment as you may require cash for clinical and everyday costs. On the off chance that your assets are bolted up for a specific period, at that point it might place you in budgetary trouble. Along these lines, guarantee that your cash is in an instrument that offers simple liquidity.

Adaptability in speculation

Your retirement-focused speculations ought to be adaptable to acclimate to your life changes at whatever point in need. Assume you get a reward, at that point your instrument ought to permit adaptability of contributing a singular amount sum while simultaneously permitting you to in like manner decrease the normal venture sum if there is a store limitation. Additionally, retirement speculations ought to permit simple section and exit so a financial specialist can accept a call during antagonistic economic situations. Adaptability is significant when you contribute as long as possible.

Oversee chance and guarantee ensured return

You should oversee hazards reliably over a while. At first one can stand to face a higher challenge. Bit by bit one should downsize hazard as retirement approaches. Over the most recent couple of years before retirement, stick to generally safe and ensured return speculation to guarantee that one doesn’t miss out because of market unpredictability.