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Insurance Riders-What Are They and Why All The Hype?

When jumping from a plane 12,000 feet above the earth’s surface, every skydiver packs a main parachute as well as a reserve.  In other words—the typical safety feature, plus a backup – just in case.

In the world of insurance products, that ‘reserve chute’ is often referred to as rider. In a very high level explanation, insurance riders simply extend coverage beyond the standard coverage offered in a policy and protect you from risks which concern you enough to spend the added premium to purchase this additional protection. 

In many cases, consumers have been led by the media to believe that they’re generally better off paying for expenses out of pocket rather than paying for additional riders.  Consider a parallel for a moment: you buy a $600 dollar TV at most major retailers, and you’re instantly offered the “extended warranty” for another $200.  While those warranties, when purchased, may save the day on occasion, in the larger picture, many consumers believe the retailer always wins, raking in millions from the sales of warranties which are never used.   

In the case of insurance riders, the same could be surmised, but be careful.  As we all know, things happen, and when they do, the best reassurance you may have could be the insurance rider you’ve purchased.

So which insurance riders are worth your dollars?  Here’s a quick look at a few common riders that can be
well worth considering.

Guaranteed Insurability:
A guaranteed insurability rider on a life insurance policy offers you, the insured, the right to purchase additional life insurance at a future date without having to prove continued insurability (ie. without another physical exam).  As an example, a Guaranteed Insurability rider might allow you to buy additional coverage every five years.  This can be a tremendous benefit to those who’ve incurred health circumstances after initially being insured.  It’s often said that “it’s your health that actually buys life insurance,” and a Guaranteed Insurability rider may be worth considering (often at a cost of an additional10-15% of your premium1) if you have significant concerns about future health issues or are in a high-risk group for a condition which would render you uninsurable.  (Note that with many insurance carriers, such a rider only guarantees your right to buy additional coverage until you reach a certain age, so be sure you understand the stipulations of your particular contract.)

Long-Term Care:
We’ve all seen the costs of Long-Term Care in this country skyrocket.  The national median rate for a private room in a skilled nursing facility is now over $213 per day – that’s over $77K a year.  A single bedroom residence in an assisted living facility?  Nearly $40K per year on average.2 Given such high costs, many look to Long Term Care Insurance (LTCI), only to determine that it’s awfully expensive, too, for coverage one may or may not use.  A popular alternative?  More affordable Long-Term Care riders available on many of today’s life insurance and annuity products.  These ‘backup chutes’ may allow you to use the death benefit from your contract to cover long-term care expenses in the event you incur them. Depending on the particular product and rider, the Long-Term Care benefit may even exceed your policy’s death benefit – providing much more reasonably priced reassurance for the days ahead.

The bottom line?  When it comes to your financial security, the best coverage or contract is generally the one that’s in place to meet your specific needs when you need it.3 We’re passionate about helping our valued clients find such potential solutions.  We feel your financial future is far too important to simply pull the cord and cross your fingers.  If you’d like to schedule a complimentary consultation to review your circumstances as well as the most current riders available, simply contact us today!

1 “Insurance Riders: When to Say Yes to Extra Protection.” www.dailyfinance.com. May 31, 2011.
2  Genworth 2011 Cost of C
are Survey. 2011.

3  Insurance and annuity Insurance and annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurance company

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Smaller Raises on the Horizon for Seniors

Generally speaking, since Social Security’s inception in 1939, as inflation has risen, the checks received by American retirees have grown with modest increases to help keep pace.  However, with the national debt reaching its ceiling in mid-May of this year and belts tightening all over Capitol Hill, new deficit reduction strategies may have those “raises” leaving a lot to be desired.

Lawmakers are considering a change to the manner in which inflation is calculated, opting to tie it to the “chained consumer price index.”  The result?  A measurement that would undoubtedly leave inflation appearing slower than the current metric which, in turn, would result in smaller increases for seniors.1

“Seniors cannot afford this,” says Mary Johnson, a senior policy analyst at The Senior Citizens League, a non-profit seniors rights advocate organization. “This would negatively impact not just seniors, but also many families that end up helping out these seniors financially.”

Roughly 60% of the nation’s seniors rely on Social Security for at least half of their income in retirement.  To these individuals, any reduction in raises to offset inflation is noteworthy.  If the new calculation method was to pass, the average retiree would see roughly $18,000 less in benefits over a typical 25 years benefit span.  After just 10 years under this new system, a 73-year old could expect benefits roughly 3% less than if calculated under the “old system.”2  

What does all of this really mean?  First, it’s further evidence that the “road to financial recovery” for the U.S. government (and many of her tax-paying citizens and seniors) will be a long one.  Such proposed debt reduction measures by Congress might take decades to have any noticeable effect on our overall deficit.  More importantly for many approaching or currently enjoying retirement is the reality that preparation for financial certainty in retirement is a burden one must carry for him or herself.  Virtually obsolete are the days of the traditional company pension.  Uncertain at best is the future of Social Security – a leg of retirement income many have planned to rely upon. 

The good news buried amidst all of this?  While little on Wall Street or Capitol Hill or the nightly news may seem stable, your financial future still can be more stable.  While Congress contemplates measures to reduce raises to offset inflation, you can still leverage financial solutions (including fixed or fixed index annuities as part of a well-rounded financial approach) which not only help protect every dime of principal and guarantee* income you can’t outlive but offer opportunities for raises in retirement income as well. 

Whether you’re planning to rely heavily on Social Security in retirement or simply use it to augment other primary income sources, the fact remains – you need a sound retirement income strategy.  The best time to find out if you’re on the right path?  Right now.   If you’d like to receive a complimentary Retirement Income Analysis, simply contact our office today!  Your financial future is far too important to leave to chance – let us help you get where you’d like to go!

1 “As the Federal Government Hits Its Debt Limit, Lawmakers Spar Over Solution.” New York Times.
May 16, 2011.
2 “Coming Soon: Smaller Raises for Seniors?” Smart Money. July 15, 2011.
*Guarantees subject to the financial strength and claims paying ability of the issuing insurer.

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Are You Really on Track for Retirement?

In determining what to cover in our company’s blog, we frequently review the questions, and more importantly, the misconceptions our new clients often approach us with during educational events and appointments.  One of the most common misconceptions we run into is the idea that as long as you average steady interest earnings (or rates of return) over a given period of years, you’ll ultimately reach your desired financial destination.  Many individuals, for example, have been brought up with the belief that the market will generally average a given return – say 9-10%  per year – over time.  Of course, market research will prove otherwise, yet the misconception still exists.

To illustrate just how dangerous this mistake can be in creating a financial strategy for the future, let’s look at a quick example.

Kenneth is in his mid 30′s and is a planner by nature. He dreams of retiring with $1 million in his retirement savings. He clings to the belief that, over time, the market will average a 10% return over time because that’s what he’s always heard.  He can easily do the math and determine that if he just sets aside $5,000 a year, he’ll reach his goal of $1 million when he retires at 65.

 In fact, you can follow Kenneth’s plan below: 

 

 

Beginning

Annual

Earnings

Annual

Ending

Age

Balance

Contribution

Rate

Earnings

Balance

 

 

 

 

 

 

35

$0

$5,000

10.00%

$500

$5,500

36

$5,500

$5,000

10.00%

$1,050

$11,550

37

$11,550

$5,000

10.00%

$1,655

$18,205

38

$18,205

$5,000

10.00%

$2,321

$25,526

39

$25,526

$5,000

10.00%

$3,053

$33,578

40

$33,578

$5,000

10.00%

$3,858

$42,436

41

$42,436

$5,000

10.00%

$4,744

$52,179

42

$52,179

$5,000

10.00%

$5,718

$62,897

43

$62,897

$5,000

10.00%

$6,790

$74,687

44

$74,687

$5,000

10.00%

$7,969

$87,656

45

$87,656

$5,000

10.00%

$9,266

$101,921

46

$101,921

$5,000

10.00%

$10,692

$117,614

47

$117,614

$5,000

10.00%

$12,261

$134,875

48

$134,875

$5,000

10.00%

$13,987

$153,862

49

$153,862

$5,000

10.00%

$15,886

$174,749

50

$174,749

$5,000

10.00%

$17,975

$197,724

51

$197,724

$5,000

10.00%

$20,272

$222,996

52

$222,996

$5,000

10.00%

$22,800

$250,795

53

$250,795

$5,000

10.00%

$25,580

$281,375

54

$281,375

$5,000

10.00%

$28,637

$315,012

55

$315,012

$5,000

10.00%

$32,001

$352,014

56

$352,014

$5,000

10.00%

$35,701

$392,715

57

$392,715

$5,000

10.00%

$39,772

$437,487

58

$437,487

$5,000

10.00%

$44,249

$486,735

59

$486,735

$5,000

10.00%

$49,174

$540,909

60

$540,909

$5,000

10.00%

$54,591

$600,500

61

$600,500

$5,000

10.00%

$60,550

$666,050

62

$666,050

$5,000

10.00%

$67,105

$738,155

63

$738,155

$5,000

10.00%

$74,315

$817,470

64

$817,470

$5,000

10.00%

$82,247

$904,717

65

$904,717

$5,000

10.00%

$90,972

$1,000,689

 It all looks simple enough, right? Kenneth starts saving right away, faithfully dropping his $5,000 per year into the plan, and as far as he can tell, he’s perfectly on track.

 Now remember, Kenneth is a planner so he’s constantly tracking his progress.  For the first several years, he’s actually ahead of the game, earning over 10% – things seem so easy! In fact, by the time he hits the 20-year mark, he’s already racked up almost $600K. He doesn’t even have to double his account value over the next 10 years. Given the numbers, he’s actually kicking around the idea of early retirement!

 Then something strange happens. The markets stop doing so well.

 Values start dropping and not bouncing back as quickly as they once did. In fact, during the final 10 years of Kenneth’s “plan,” he actually ends up netting a 0% rate of return. He ends up with $562K in his account after 30 years instead of the $1 million he planned, yet, when he does the math to find out what he actually averaged over those 30 years, he uncovers 9.68% – very close to his 10% figure.  So what happened to the “plan?” 
 
A rule that many individuals don’t take into account when looking at their retirement earnings:  sequence of returns.

 Kenneth was making great returns when his account balance was small, but once his account got larger, his returns were poor. Big returns on small amounts of money were quickly trumped by small returns on large amounts of money. This is a real issue which impacts real people every day.

 Take a look at a hypothetical example of someone turning 35 in 1980 and investing in the S&P 500.

 

Beginning

Annual

Earnings

Annual

Ending

Age

Balance

Contribution

Rate

Earnings

Balance

 

 

 

 

 

 

35

$0

$5,000

25.77%

$1,289

$6,289

36

$6,289

$5,000

-9.73%

-$1,098

$10,190

37

$10,190

$5,000

14.76%

$2,242

$17,433

38

$17,433

$5,000

17.27%

$3,874

$26,307

39

$26,307

$5,000

1.40%

$438

$31,745

40

$31,745

$5,000

26.33%

$9,676

$46,422

41

$46,422

$5,000

14.62%

$7,518

$58,940

42

$58,940

$5,000

2.03%

$1,296

$65,236

43

$65,236

$5,000

12.40%

$8,710

$78,946

44

$78,946

$5,000

27.25%

$22,876

$106,822

45

$106,822

$5,000

-6.56%

-$7,335

$104,487

46

$104,487

$5,000

26.31%

$28,802

$138,290

47

$138,290

$5,000

4.46%

$6,397

$149,686

48

$149,686

$5,000

7.06%

$10,913

$165,600

49

$165,600

$5,000

-1.54%

-$2,626

$167,974

50

$167,974

$5,000

34.11%

$59,002

$231,976

51

$231,976

$5,000

20.26%

$48,020

$284,996

52

$284,996

$5,000

31.01%

$89,923

$379,919

53

$379,919

$5,000

26.67%

$102,652

$487,571

54

$487,571

$5,000

19.53%

$96,180

$588,751

55

$588,751

$5,000

-10.14%

-$60,201

$533,549

56

$533,549

$5,000

-13.04%

-$70,241

$468,308

57

$468,308

$5,000

-23.37%

-$110,593

$362,715

58

$362,715

$5,000

26.38%

$97,005

$464,720

59

$464,720

$5,000

8.99%

$42,244

$511,964

60

$511,964

$5,000

3.00%

$15,514

$532,478

61

$532,478

$5,000

13.62%

$73,201

$610,679

62

$610,679

$5,000

3.53%

$21,731

$637,410

63

$637,410

$5,000

-38.49%

-$247,237

$395,173

64

$395,173

$5,000

23.45%

$93,857

$494,031

65

$494,031

$5,000

12.78%

$63,790

$562,821

      
  

Average:

9.68%

  

 The moral of the story?  You can achieve your target rate of return and still fail miserably with your planning. In this example, Kenneth leaned on a big “MAYBE” in his approach to retirement: Maybe he’d succeed.  The problem was it all depended on variable he didn’t control.
 

We believe that as you near retirement, sound financial strategy involves turning “maybes” into certainties – removing chances for failure and replacing them with true guarantees* such as those found in fixed or fixed index annuities. If you’d like to know more about how you can “insure your financial future,” simply contact us today!

  

*Guarantees on insurance and annuity products are subject to the financial strength and claims-paying ability of the issuing insurer.

 

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GAO Suggests Retirees Delay Social Security & Look Toward Other Solutions

In a time in which many question the very certainty of Social Security altogether, the Government Accountability Office (GAO) recently suggested that individuals postpone drawing benefits, waiting until at least their full retirement age, or 66 for those born from 1943 to 1954, before tapping into the system.   This comes as unwelcomed advice to many, following the Social Security trustees’ report in May of this year which indicated the system would not be able to pay recipients in full, beginning in 2036.2

CLICK HERE for the full report from the U.S. Government Accountability Office.

According to the recent GAO study, “The risk that retirees will outlive their assets is a growing challenge.” Lengthened life expectancies with ever-increasing health care costs paired with significant drops in both financial markets and home values have deepened American retirees’ concerns about how to manage their savings in retirement, the report said.  Many facing this dilemma seek the highest possible benefit payment from Social Security, and it’s no mystery that monthly payouts are significantly higher if benefits are postponed as long as possible. The problem for many? Bridging the income gap from the time one retires until one is eligible for his or her maximum Social Security benefit.

According to the GAO study, a husband and wife, both age 65, have about a 47% chance that at least one will live to age 90.  Nearly half of those nearing retirement are expected to run out of money and be unable to pay for basic expenses and uninsured healthcare costs.1 Among the solutions proposed by the study was the traditional annuity – the only financial vehicle widely used – on a guaranteed basis* – to help protect retirees from the risk of outliving their savings. 

While annuities, like any other financial product, are not the right solution for everyone, they have been critically important retirement-income components in the overall financial strategies for many of our clients.  While many Americans have watched their invested retirement accounts suffer significant losses throughout the past 3-4 years, our clients who leverage the principal guarantees* and lifetime distribution option of annuities as a component of their financial strategy have enjoyed the reassurance of knowing every penny is protected,* and their income is assured* – no matter how long they live.

We believe that life goes on well after retirement.  Would you like your income to do the same?  If you’d like to schedule a complimentary retirement income analysis or discuss your unique financial goals, simply contact us today.  We specialize in helping valued clients to and through retirement, and we’d love to do the same for you.
 

1 Retirement Income: Ensuring Income throughout Retirement Requires Difficult Choices. Report to the Chairman, Special Committee on Aging., U.S. Senate. June 2011.

2 “Delay Social Security, add annuity to outlive savings, GAO says.” Margaret Collins. Bloomberg News. July 4, 2011.

*Insurance products such as annuities are guaranteed subject to the financial strength and claims-paying ability of the underwriting  insurer.

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Protecting Yourself from the Thief of the New Millennium

Protecting Yourself from the Thief of the New Millennium

It’s happened to far too many individuals.  You’re enjoying dinner when the phone rings with a collection agency on the other end, demanding payment for overdue charges on an account you never knew you had.  Maybe a statement shows up in the mail with purchases you never made on a credit card you haven’t used in over a year.  Whatever the situation, the reality is that we’re all potential victims of identity theft, and it’s critically important to take steps to protect your personal information.

Generally speaking, identity theft occurs when someone uses your personally identifying information, like your name, Social Security number, or credit card number, without your permission, to commit fraud or other crimes. The Federal Trade Commission estimates that as many as 9 million Americans have their identities stolen each year.1  While some victims of identity theft are able to quickly resolve their issues, others are forced to spend thousands in legal fees and countless hours in an effort to repair their good name and credit record.  Job opportunities, loans for housing, automobiles or education – all may be unavailable simply because unprotected information was stolen and abused.

So what can be done to help protect yourself?  First, CLICK HERE to watch a short video from the Federal Trade Commission on how you can deter, detect and defend against ID theft.  Then, take a look at these practical steps you can take to avoid becoming a victim of identity theft.

TRUST YOUR INSTINCTS…UNLESS YOU’RE THE TRUSTING TYPE.
There are a million schemes running everyday to catch the unsuspecting consumer.  From free trips to the Bahamas to new laptop computers to mandatory “information updates” to your credit accounts, ID thieves employ every trick imaginable.  If you’re contacted by phone or email requesting information, do not divulge or confirm any information.  Remember, even in today’s “digital age,” there is still nothing that has to be done over the internet or by phone that can’t be done in person or by mail. Be cautious of anyone telling you otherwise. Even if you are the one who initiated contact with a company online, never release personal information without knowing whether or not the company is reputable.

GUARD YOUR SOCIAL SECURITY NUMBER AT ALL COSTS.
Only provide your Social Security number when required by law. Never have it printed on your checks (as was custom for quite some time), and review your annual Social Security statement for major discrepancies.

SHRED, SHRED, SHRED.
Every document containing any personal information whatsoever should be shredded before being discarded.  This includes everything from credit card and bank account statements to new credit card offers, insurance policy statements, voided checks and any personal correspondence containing information you wouldn’t want shared.  Home office shredders can be purchased at any office supply store for roughly $35 – a wise investment to help you protect yourself from thieves.

MIND YOUR MAIL.
As simple as this seems, it’s one of the most important steps you can take. Identity thieves have been known to steal personal information straight from your mailbox, so make sure your daily mail is promptly removed, and whenever possible, deposit any outgoing mail at the post office as opposed to leaving it in your mailbox unattended. Whenever you’ll be away from home for more than a day, ask a trusted neighbor or relative to retrieve your mail or ask the post office to hold it until you return.

DON’T USE THE OBVIOUS.
Whenever you are creating personal identification numbers (PINs) or passwords for various accounts, resist the urge to use easily remembered numbers such as your birth date, the last four digits of your Social Security number, your street number or any other information which could easily be uncovered by thieves. Instead, use create more abstract PINs, and if you must write them down (rather than committing them to memory), be sure those “cheat sheets” are well hidden in a lock box or other secured location.

CARRY A BARE MINIMUM.
Despite the urge to keep everything “handy,” do not carry your Social Security card, all credit cards and your passport in your purse or wallet unless absolutely necessary. 99% of the time, you should only need your driver’s license, an insurance card and your primary credit card on your person at any given time. As a precautionary measure, make copies of all credit cards, and record all account numbers, keeping this information in a secure location such as a lock box, along with the telephone numbers for the fraud departments for each institution so you can quickly notify them if an issue arises.

INSTALL A LITTLE PROTECTION.

A firewall is a protective device which can be installed on your computer to help prevent identity thieves from obtaining personal identifying information and financial data from your hard drive. Virtually any computer retailer can assist with the installation and maintenance of your firewall, and they can also assist in “wiping” your computer clean before disposing of an old one. This is very important as you don’t want to rely solely on your own deleting abilities to remove any sensitive information from your device.

CHECK YOUR CREDIT REPORT.
On an annual basis, it’s wise to review your credit report to check for errors and fraudulent use of your accounts. You can now get a free copy each year of your credit report by visiting www.annualcreditreport.com or calling (877) 322-8228.

Have you or someone you know already been a victim of identity theft?  CLICK HERE for a free copy of “Take Charge: Fighting Back Against Identity Theft.”  This 52-page guide from the Federal Trade Commission gives you the immediate steps you should take to file a report as well as the follow-up steps you can take to help resolve any resulting issues. 

While there may be no absolutely “fool-proof” way to avoid ID theft, there are concrete ways to greatly reduce your risk.  Take action now, and if you’d like more information on this topic, simply contact our office today!

1 http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/about-identity-theft.html#Howdothievesstealanidentity. 2011.

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Now, More than Ever Before, Responsibility is Yours

The spring tornado season of 2011 will easily go down in history as one of the deadliest on record, with both storm counts and death tolls more than doubling the previous year’s figures. In Tuscaloosa, AL, over 335 lives were claimed in the second deadliest day of twisters in U.S. history.1 In Joplin, MO, an EF5 ripped a path three quarters of a mile wide and 6 miles long – killing over 130 and marking the deadliest single tornado since 1950.   On May 24th, deadly twisters claimed 18 additional lives in Oklahoma, Kansas and Arkansas. Other states are reeling as well. There were 34 deaths in Mississippi, 34 in Tennessee, 15 in Georgia, five in Virginia, two in Louisiana and one in Kentucky.2 The devastation this spring has been unbelievable, and our deepest sympathies and condolences go out to all those impacted by these many disasters. 

In analyzing the contributing factors to this year’s deadly season, many meteorologists note an incredibly unstable environment.  “This is just remarkable from a meteorological point of view,” says City College of New York’s Professor of Earth and Atmospheric Science Stan Gedzelman. “The instability of the storms that hit Tuscaloosa is just about as large as I have ever seen,” he says.

CLICK HERE to read the entire article.

Unfortunately, weather patterns aren’t the only source of instability facing our country. Treasury Secretary Timothy Geithner recently informed Congress that the U.S. government had officially reached its $14.3 trillion debt ceiling.  (CLICK HERE to view the full text.) What is the debt ceiling? It’s the maximum amount of money the government can borrow to finance existing obligations such as Social Security and Medicare benefits, military salaries and interest on existing national debt.  Geithner said he will immediately halt investments in two major government pensions to allow borrowing to continue, but repeated a warning that if lawmakers don’t increase the borrowing limit by August 2nd, the government is at risk of an unprecedented default on its debt.

With private sector pensions virtually obsolete, even major government pension investing freezing and the future existence of Social Security as a real source of retirement income hanging in the balance, the burden of creating a sound retirement strategy is falling squarely on the shoulders of the individual.  Much like the storms of the Midwest and the South, there have been warnings regarding recent financial storms, several of which have gone unheeded. 

You may have seen our previous post in which we relayed the findings of a recent study showing that 44% of Boomers aren’t sure they’ll have enough to retire – 25% reporting they don’t think they’ll see a day when they can. In this same national study, 11% reported feeling “deeply confident” that they could retire comfortably.3  Much as meteorologists have no ability to control the weather they analyze, there is very little we can do to control the factors swirling on the national economic radar. 

However, in the midst of one of the worst financial storms in recent times, there is safe shelter to be found.  While many in this country saw losses to their investments and retirement accounts in excess of 30-40% over the past three years4, several of our clients enjoyed the knowledge that their hard-earned assets were safeguarded from all loss, potentially even earning interest while others around them saw dramatic drops.  As millions now head into retirement wondering what the forecast may bring, we have scores of valued clients knowing exactly what to expect – at peace with even their worst case scenario – because of the guaranteed* retirement income (through the use of annuities) and overall strategies we’ve helped them put in place.

If you’d like to prepare for the instability ahead and help ensure you’re not in the path of the storm, simply contact us today! 

To help those affected by recent tornado devastation, please consider supporting American Red Cross Disaster Relief or other local relief agencies. Ours has always been a nation willing to roll up its sleeves and help in times of need, and to get started, simply CLICK HERE.

Sources:
1
http://www.huffingtonpost.com/2011/04/30/2011-tornado-outbreak-deaths_n_855646.html,  April 30, 2011.
2
http://www.cbsnews.com/stories/2011/05/23/eveningnews/main20065478.shtml#ixzz1ObMXFhLX, May 23, 2011.
3
Associated Press – LifeGoesStrong.com Poll, http://work.lifegoesstrong.com/retirement-poll, April 5, 2011.
4 USA Today. “401(k) losses: Older investor’s retirement funds hit hard. October 31, 2008.


* Guarantees subject to the financial strength and claims paying ability of the issuing insurer.

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Staggering Numbers Approach Retirement Feeling Unprepared

The past two to three years have marked a major shift in the way Americans approaching retirement view this “third act” of life.  Once regarded as “Golden Years” in which many of life’s dreams could finally come to fruition, retirement now signifies a time of anxiety, unrest and uncertainty for many.

Significant losses to 401(K)s and IRAs, a prolonged recession and continued volatility on the market have millions of Boomers wondering if the retirement they’ve always envisioned is really still within reach. In fact, a broadcast from ABC News recently revealed some staggering new statistics regarding retirement:

  • 44% of Baby Boomers surveyed aren’t sure they’ll have enough to retire
  • 60% of Boomers have lost significant value in their investments, homes and retirement plans in the last three years
  • 42% are delaying retirement
  • 25% feel they will not see the day they can retire
  • 64% of people see Social Security as the key part of their retirement safety net
  • Only 11% of people feel deeply confident that they can retire comfortably

Source: Associated Press – LifeGoesStrong.com Poll, http://work.lifegoesstrong.com/retirement-poll, April 5, 2011.

CLICK HERE to watch the actual broadcast (originally broadcast on April 5, 2011).

Where do you find yourself among those surveyed above?  Are you still right on track for each of your retirement goals, or will you have to delay them or settle for less than anticipated?  Are you really even sure?

Fortunately, despite a volatile economy and a number of factors which indicate that real recovery will be slow in the making, those looking for guarantees are not without hope.  In fact, one of the most frequently requested services we offer is the “insuring” of our clients’ retirement income through the use of guaranteed* financial products such as annuities.

What is an annuity?  It is an insurance product which can distribute income as part of an overall retirement strategy. Annuities have become a very popular choice for individuals who want to receive a steady, predictable, guaranteed income stream throughout retirement. Here’s a general description of how an annuity works: you deposit a sum of money into the product, and it then makes payments to you on a future date or series of dates. The income you receive from an annuity can be paid out to you monthly, quarterly, annually or, in some cases, even in a lump sum payment. You have several payment options including (but not limited to) receiving payments for a set number of years for the rest of your life.  This latter option has made these products incredibly popular, as life expectancies continually increase, the prevalence of employer-sponsored pensions decrease and the future of Social Security becomes increasingly uncertain.

(CLICK HERE for a look at commentary from President Obama himself on the value of annuities, published in the New York times in January of 2010.)

Translation? With a true financial professional at your side helping you navigate the road to and through retirement, the future doesn’t have to be uncertain.  The dreams you’ve envisioned don’t inherently have to wait, be “down-sized” or abandoned altogether.  If you’d like to see where you currently stand and ensure you’re making the best possible moves for your financial future, just give us a call today!

* Guarantees subject to the financial strength and claims paying ability of the issuing insurer.

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Does Your Life Insurance Policy Still Pass the Test?

When it comes to life insurance, there’s a common saying: “The best kind of policy is the one that’s in place when you need it.” While there’s no question that some form of coverage is always better than none, there’s still a very important difference between having coverage and having the right coverage.

A simple policy review can help determine whether you have the right coverage in place or give you the chance to make any necessary adjustments.  Why is this so critical?  Because your needs are constantly evolving. Such is life, right?  Those pants from a few years ago may now be fitting a little snug.  That motorcycle which seemed like a great idea at 21 isn’t quite as practical at 30. Situations change, and those who take a “set it and forget it” approach to life insurance coverage may very well find that their intentions aren’t carried out as effectively or efficiently as they’d hoped them to be.

Will I have to buy more coverage?
A policy review isn’t an automatic precursor to purchasing additional coverage. There are actually several different possible outcomes. Depending on your present needs, you may find that:

• Your coverage effectively meets your goals
• Your coverage ineffectively meets your goals
• Your coverage exceeds your current needs
• Your coverage does not meet your current objectives

(Unsure of your current life insurance needs?  CLICK HERE for a “Life Insurance Reality Check” from www.lifehappens.org to help calculate coverage!)

What are common reasons for a policy review?
• It’s been 2 years or longer since a financial professional reviewed your coverage with you
• You want to make sure your immediately family is still adequately protected
• Your health has changed – either for the better or worse
• You have paid off major expenses which you were previously insuring with your life policy (Ex. Mortgage, children’s college education, etc.)
• You’re curious as to whether or not you can find more affordable coverage
• You’d like to explore a term vs. permanent life insurance comparison
• You’d like to learn more about possibly converting your  existing term life insurance policy into a permanent one

What’s covered in a typical policy review?
A thorough policy review will examine any relevant changes in your life, your current life expectancy, any applicable economic factors or conditions and recent changes or developments in new life insurance solutions. We offer complimentary policy reviews to help ensure the coverage you initially put in place continues to meet your needs into the future.  We’ll look at questions such as:

• Would your current death benefit cover today’s estimated estate settlement costs?
• Could your current goals be met more economically with different coverage?
• Is you’re current ownership structure of your policy as tax-efficient as possible?
• Are your beneficiary designations still current?
• Are there new product options or riders that may better suit your needs?
• If applicable, is the cash value in your policy capable of sustaining your coverage?

Some individuals may feel their life insurance is something they could easily monitor themselves.  However, mistakes here can be very costly. We encourage you to take advantage of a free policy review in which we can quickly uncover the factors that need to be analyzed, facilitate any necessary changes, offer our expertise and keep you abreast of any new products or solutions available. To schedule this complimentary review, simply contact us today!