What to Do with Those Old 401(k) Plans

As a mid-career professional in today’s workplace, accumulating multiple 401(k) plans is a real possibility. It’s very rare for someone to work for one company for the entirety of their career. Many of us have changed jobs for a variety of reasons and a by-product of those moves may be holding several retirement savings plans.

So, what do you do with all these different 401(k) plans? It’s important to understand your options, because a wrong decision could lead to a loss of savings.

Quick Definition of Terms

Despite always discussing these topics, it’s still good to have a refresher of the terminology. Most employers offer 401(k) plans, which finds them matching their employees’ pre-tax contributions.

There are two different types of 401(k) plans – Traditional and Roth IRA.

Traditional IRA: This retirement account allows individuals to direct pre-tax income toward investments that can grow tax-deferred. The IRS assesses no capital gains or dividend income taxes until the beneficiary makes a withdrawal.

Roth IRA: An individual retirement account that allows a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free.

The advantage of a Roth 401(k) is evident with the absence of an income limit. Individuals with an adjusted gross income (AGI) of more than $153,000 and married couples filing jointly who make more than $228,000 are not eligible for a Roth IRA. This makes the Roth 401(k) a great option for people with high incomes.

Rolling Over into a Traditional IRA

A preferred choice for managing an old 401(k) plan is rolling it over to an Individual Retirement Account (IRA). An IRA gives you control over how to invest your savings.

Some of the benefits of rolling over the services to an IRA include:

·       Chances of continued growth with deferred tax.

·       You can withdraw the money, if you’re below age 59½, penalty-free for higher education or a first-time home purchase.

·       Access to a wider range of investment choices.

However, there are some drawbacks to this option which include:

·       Once you reach age 73 in 2023 or later, you must take annual RMDs (required minimum distribution) from a traditional IRA annually, even if you continue working.

·       There is more federal law protection for 401(k) plans than in IRAs, although some states protect IRAs.

Where to Invest Your 401(k) Plan

It’s important to align any investment choices with your risk tolerance, time, and financial objectives. When considering where to invest your 401(k) plan or Traditional IRA, diversifying your portfolio is crucial to managing risk and optimizing returns. Consider a diverse portfolio in bonds, stocks, and alternative investments with good returns and managed volatility.

Overcoming FOMO

Fear of missing out (FOMO) can significantly hinder investment decisions. It's important to remember that investing is a long-term strategy, and chasing short-term market trends can often lead to poor outcomes. Instead, focus on your financial goals and consult a financial advisor (Hopefully you know a great one!) who can help you make informed investment decisions based on your unique circumstances and risk tolerance.

More importantly, don’t miss the chance to take advantage of this opportunity. Reach out today and let me help you take advantage of this option.

Taking a Holistic Approach

Considering your entire financial picture when managing your retirement savings is essential. A holistic approach involves looking at your debt, estate planning needs, insurance coverage, and other financial obligations. This approach ensures that your retirement savings align with your broader financial goals and enables you to make informed decisions that support your long-term financial well-being.

We could take your old, dormant 401(k) plans and roll them over to be an active member of your financial plan. There’s also an opportunity to make it easier on your heirs, if you take older 401(k) plans and combine them into one Traditional IRA. Once you open a Traditional IRA and pay the taxes, you may have the option of a Backdoor Roth IRA. All these opportunities are available to you once we start working on managing those old 401(k) plans.

Don’t overlook the importance of a comprehensive financial plan, and never assume it's only crucial to have a financial plan when you have significant assets. Creating a financial plan can help you set clear goals, develop an investing roadmap, identify potential risks, and help you achieve financial security.

Considerations for Married Couples

Married couples often face unique challenges when managing old 401k plans. It's crucial to have open and honest communication with your spouse about your retirement goals and aspirations. Together, you can develop a joint financial plan and determine the most effective way to handle your retirement accounts, whether it involves consolidating them or maintaining separate accounts.

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Retirement: It's More Than Just Saving Money

Have you ever wondered about retirement beyond the savings account? Your retirement should be more than just numbers on a statement. Go beyond financial planning and think about a holistic lifestyle.

Here is a guide to help you prepare for a retirement period where financial prudence merges seamlessly into a fulfilling life story.

Shift Gears from Spending to Saving

Your spending habits throughout your working years significantly impact your retirement. Think of them as the building blocks for your financial future. Make wise spending choices and balance enjoying the present with preparing for the future to secure your retirement.

Begin by embracing a saving mindset — start small, set achievable goals, and automate savings to gradually build discipline. Make thoughtful decisions that align with your long-term goals as you save money. Let budgeting become your compass, guiding your expenses and savings while effective debt management frees up resources. Embrace strategic investment to grow your wealth and secure a prosperous future.

Planning for a Fulfilling Future

Envision your ideal retirement and start anticipating the diverse needs you might encounter and ways to meet them to ensure a fulfilling and comfortable lifestyle. Explore various living arrangements and consider ideal locations. Whether downsizing to a cozy home or embracing community living, each choice impacts the retirement experience. Additionally, put thoughtful consideration on robust healthcare and long-term care plans.

Enjoying Retirement to the Fullest

Living a fulfilling life includes pursuing your lifelong dreams and passions, encountering unforgettable experiences, and cultivating meaningful relationships. Recognize or develop hobbies and realize your aspirations to craft a vibrant retirement. Explore travel opportunities, indulge in hobbies, and embrace leisure activities that bring you joy. Spend quality time with loved ones and foster meaningful social connections.

Finding Your Purpose in Retirement

The absence of structure and commitment after retirement can make life feel purposeless and aimless. However, it also opens doors for meaningful engagement. You have time and a wealth of experience to make a change or add value to another person's life. Consider volunteering, mentoring, or pursuing a passion project as avenues to fill this void.

Continue learning. Your quest for knowledge shouldn’t diminish with age. Acquire new skills to stimulate your mind and cultivate a sense of purpose. Your retirement life should not be dull. It can be a dynamic chapter in your life.

Leaving a Legacy for Future Generations

Beyond material possessions, consider the legacy you want to leave. Explore contributions to society through philanthropy, mentorship, or social activism, leaving an impact extending beyond personal achievements. Share wisdom and life lessons with younger generations through storytelling and documentation, creating a lasting imprint of values and experiences that transcend the boundaries of time. Let your legacy become a tapestry woven with tangible and intangible threads, influencing and inspiring future generations.

Additional Considerations

As you prioritize your physical health, don’t neglect your mental health. Make conscious choices for a healthy lifestyle, including regular exercise, balanced nutrition, and sufficient rest. Nurture your body and mind to embrace and fully enjoy the newfound freedom of retirement.

Build and sustain robust relationships with family and friends for emotional support during this phase of your life. Cultivate connections that provide companionship, understanding, and a shared sense of joy. Strong social bonds enhance your emotional well-being and create a network of support that becomes invaluable as you navigate the challenges and joys of retirement.

The flexibility to adapt is essential in the retirement journey. Embrace change and be prepared to address evolving needs and unforeseen challenges. Whether adjusting to a new routine, exploring new interests, or finding innovative solutions to unexpected issues, the ability to adapt ensures an enjoyable retirement experience.

Prepare to Enjoy and Live

Retirement is still part of living. Therefore, prepare for it beyond your finances. Think about your comfort, passions, dreams, hobbies, loved ones, and legacy. Learn to live and let live in your experience and go wholeheartedly without regrets.

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Teach Your Children Well

Even before your children can count, they already know something about money: it’s what you have to give the ice cream man to get a cone or put in the slot to ride the rocket ship at the grocery store. So, as soon as your children begin to handle money, start teaching them how to handle it wisely. Teach your children.

Making allowance

Giving children allowances is a good way to begin teaching them how to save money and budget for the things they want. How much you give them depends in part on what you expect them to buy with it and how much you want them to save.

Some parents expect children to earn their allowance by doing household chores, while others attach no strings to the purse and expect children to pitch in simply because they live in the household. A compromise might be to give children small allowances coupled with opportunities to earn extra money by doing chores that fall outside their normal household responsibilities.

When it comes to giving children allowances:

·       Set parameters. Discuss with your children what they may use the money for and how much should be saved.

·       Make allowance day a routine, like payday. Give the same amount on the same day each week.

·       Consider “raises” for children who manage money well.

Take it to the bank

Piggy banks are a great way to start teaching children to save money but opening a savings account in a “real” bank introduces them to the concepts of earning interest and the power of compounding.

While children might want to spend all their allowance now, encourage them (especially older children) to divide it up, allowing them to spend some immediately, while insisting they save some toward things, they really want but can’t afford right away. Writing down each goal and the amount that must be saved each week toward it will help children learn the difference between short-term and long-term goals. As an incentive, you might want to offer to match whatever children save toward their long-term goals.

Shopping sense

Television commercials and peer pressure constantly tempt children to spend money. But children need guidance when it comes to making good buying decisions. Teach children how to compare items by price and quality. When you’re at the grocery store, for example, explain why you might buy a generic cereal instead of a name brand.

By explaining that you won’t buy them something every time you go to a store, you can lead children into thinking carefully about the purchases they do want to make. Then, consider setting aside one day a month when you will take children shopping for themselves. This encourages them to save for something they really want rather than buying on impulse. For “big-ticket” items, suggest that they might put the items on a birthday or holiday list.

Don’t be afraid to let children make mistakes. If a toy breaks soon after it’s purchased or doesn’t turn out to be as much fun as seen on TV, eventually children will learn to make good choices even when you’re not there to give them advice.

Earning and handling income

Older children (especially teenagers) may earn income from part-time jobs after school or on weekends. Particularly if this money supplements any allowance you give them, wages enable children to get a greater taste of financial independence.

Earned income from part-time jobs might be subject to withholdings for FICA and federal and/or state income taxes. Show your children how this takes a bite out their paychecks and reduces the amount they have left over for their own use.

Creating a balanced budget

With greater financial independence should come greater fiscal responsibility. Older children may have more expenses, and their extra income can be used to cover at least some of those expenses. To ensure that they’ll have enough to make ends meet, help them prepare a budget.

To develop a balanced budget, children should first list all their income. Next, they should list routine expenses, such as pizza with friends, money for movies, and (for older children) gas for the car. (Don’t include things you will pay for.) Finally, subtract the expenses from the income. If they’ll be in the black, you can encourage further saving or contributions to their favorite charity. If the results show that your children will be in the red, however, you’ll need to come up with a plan to address the shortfall.

To help children learn about budgeting:

·       Devise a system for keeping track of what’s spent

·       Categorize expenses as needs (unavoidable) and wants (can be cut)

·       Suggest ways to increase income and/or reduce expenses

The future is now

Teenagers should be ready to focus on saving for larger goals (e.g., a new computer or a car) and longer-term goals (e.g., college, an apartment). And while bank accounts may still be the primary savings vehicles for them, you might also want to consider introducing your teenagers to the principles of investing.

To do this, open investment accounts for them. (If they’re minors, these must be custodial accounts.) Look for accounts that can be opened with low initial contributions at institutions that supply educational materials about basic investment terms and concepts.

Helping older children learn about topics such as risk tolerance, time horizons, market volatility, and asset diversification may predispose them to take charge of their financial future.

Should you give your child credit?

If older children (especially those about to go off to college) are responsible, you may be thinking about getting them a credit card. However, credit card companies cannot issue cards to anyone under 21 unless they can show proof, they can repay the debt themselves, or unless an adult cosigns the credit card agreement. If you decide to cosign, keep in mind that you’re taking on legal liability for the debt, and the debt will appear on your credit report.

Also:

·       Set limits on the card’s use

·       Ask the credit card company for a low credit limit (e.g., $300) or a secured card to help children learn to manage credit without getting into serious debt

·       Make sure children understand the grace period, fee structure, and how interest accrues on the unpaid balance

·       Agree on how the bill will be paid, and what will happen if the bill goes unpaid

·       Make sure children understand how long it takes to pay off a credit card balance if they only make minimum payments

If putting a credit card in your child’s hands is a scary thought, you may want to start off with a prepaid spending card. A prepaid spending card looks like a credit card but functions more like a prepaid phone card. The card can be loaded with a predetermined amount that you specify, and generally may be used anywhere credit cards are accepted. Purchases are deducted from the card’s balance, and you can transfer more money to the card’s balance whenever necessary. Although there may be some fees associated with the card, no debt or interest charges accrue; children can only spend what’s loaded onto the card.

One thing you might especially like about prepaid spending cards is that they allow children to gradually get the hang of using credit responsibly. Because you can access the account information online or over the phone, you can monitor the spending habits of your children. If need be, you can then sit down with them and discuss their spending behavior and money management skills.

IMPORTANT DISCLOSURES

This material was prepared by Broadridge Investor Communication Solutions, Inc. This information is believed to be from reliable sources; however, no representation is made as to its accuracy or completeness. This information does not constitute tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty, nor is it a solicitation or recommendation to purchase or sell any insurance or investment product or service, and readers should not rely upon it as such. Readers should seek such advice from their own tax or legal counsel or financial professional.

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Financial Literacy Month

April is National Financial Literacy Month. But what is financial literacy? And who is best served by understanding financial literacy? We will explore the answer of the first question below. The answer to the second question? Almost everyone who needs to make financial decisions. That’s most of us.

Financial literacy is knowing and understanding the basic skills used to manage, budget, and invest money. Managing money is a life skill. And there are lots of ways to learn and approach that skill. There is a growing sentiment that these skills should be taught in high school but, unfortunately, that is rarely the case. While it’s a topic that’s best learned at an early age, it’s never too late to learn.

Think about how we approach life and everyday activities today. So many transactions are done online with a debit or credit card, and most are done over our phones. The one-click payments make it easy to forget how much money is in our actual bank account. This, coupled with a lack of personal financial knowledge, is how many people wind up with money trouble and budget problems.

Let’s look at the basics of financial literacy:

Budget

Look at how much money you bring in each month versus how much you spend. Track regular expenses (mortgage/rent, utility payments, credit card/loan payments, gas, grocery shopping, etc.) Next, break down discretionary spending (eating out/takeout, travel, retail shopping, etc.) And, of course, determine what amount of money will go to savings.

Paying Bills
Once you know the difference between money earned and money spent, you can determine the amount of money you will need to pay your bills. It’s important to pay your bills on time whenever possible. It will have a positive impact on your credit score. Speaking of paying bills…

Credit Card Debt: Getting credit card debt under control is important for your credit score. You need to be honest with yourself and determine a strategy for what you can afford to pay each month.

Student Loan Debt: Gaining a greater understanding of student loans is something that should start while still in school. You need to know the amount of your payment and when it will be due.

Retirement Investments

Many employers offer 401(k) plans with a wide variety of options for employees. You also have options outside of your employer such as IRA plans and fixed annuities. Still, this article lays out important information to know about retirement planning: The sooner you start saving, the better.

Part of the reason financial literacy is so important is because we have so many options for investing and retirement savings. The need to understand the basic skills of financial literacy at an early age has never been greater.

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Back to Basics: Estate Planning

Estate planning is an integral component of any good financial plan. Without this planning, you can leave your loved ones without the resources they need to take care of themselves or their family in case something unexpected happens to you.

Let's define what estate planning means. Estate planning involves assessing and managing your tangible and intangible assets to ensure they are passed on effectively to the people you choose upon death or incapacitation. We will delve into different aspects of estate planning to give you a better understanding.

What Are Your Tangible and Intangible Assets?

Tangible assets include investments like stocks, bonds, real estate, cash, and other items with monetary value. Intangible assets may consist of intellectual property, a business interest, or a family heirloom. Knowing the assets you have will be the first step in estate planning.

How to Protect Your Assets and Your Family?

Often, families have had to battle for their loved one's assets due to a lack of clear instructions or ill-planned estate planning. You can protect your assets for your loved ones by establishing clear directives in the form of legal documents.

Establishing the correct legal documents gives you peace of mind knowing that the details are taken care of. You know that if something happens, your loved ones will have guidance on what to do.

Establish Your Directives

One of the most significant processes in estate planning is to establish your directives. This includes wills and trusts, power of attorney documents, living wills/directives for medical decisions, and beneficiary decisions.

Wills and Trusts

A will is a legal document that indicates how you want assets divided after death. A trust allows assets to pass outside probate and can be used to protect assets from creditors, taxes, or other losses.

The choice between a will and a trust depends on the size of your estate, tax considerations, legal complications, and other factors. You can consult with an attorney to determine which is best for you.

Power of Attorney

A power of attorney (POA) is a legally binding document that gives another party the right to decide on your behalf in case of illness or incapacitation. There are two common types of POA:

• Durable

• Medical/Healthcare

A durable POA allows someone to manage your financial matters if you can't do so. A medical/healthcare POA mandates another person to make decisions on your behalf if you are incapacitated and not mentally able.

Living Wills/Directives for Medical Decisions

A living will, also known as an advance healthcare directive, is a document that states what medical procedures you want to be done if you’re unable to communicate your wishes.

The essence of having a living will is to protect you from extraordinary or unwanted medical intervention. It allows you and your family members to decide how the doctor should act in an emergency.

Beneficiary Decisions

Beneficiaries are people, institutions, or organizations that will receive assets upon death. These assets can include investments, bank accounts, retirement accounts, real estate, or other items with monetary value.

It is advisable to review your beneficiary designations regularly and keep them up to date. This will ensure that your assets are passed on the way you intended.

Understanding Tax Laws in Relation to Estate Planning

Tax laws can have a considerable impact on estate planning. Understanding the tax implications of estate planning decisions is essential so you can plan accordingly.

For example, if you create a trust, there may be implications for taxes and estate taxes. It's important to consult with an attorney or tax professional to discuss the tax implications of your decisions.

Have a Plan to Re-analyze Your Plan

A well-thought-out plan is only as effective as it remains current. Life changes often and updating your estate planning documents is necessary.

If you’ve had significant life changes (such as marriage, divorce, or the birth of a child), ensure that your estate plan is up-to-date and covers these events. This will give you peace of mind knowing that all bases are covered.

Conclusion

Estate planning is vital in managing your assets and protecting your family. Establishing legal documents, understanding tax laws, and regularly reviewing your estate plan are key steps in ensuring your wishes will be fulfilled after death. With the proper planning and guidance, you can take care of your loved ones and give them protection.

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Spring Cleaning Your Way to Better Finances

Spring is a good time to clean out the cobwebs, and not just in your home or apartment. Your personal finances can benefit from a good spring cleaning, too. Here are some questions to ask yourself regarding your budget, debt, and taxes.

Is there room in my budget to save more?

A budget is the centerpiece of any good personal financial plan. After tallying your monthly income and expenses, you hopefully have money left over to save. But is there room to save even more? Review your budget again with a fine-toothed comb to see if you might be able to save an additional $25, $50, $100, or $200 per month. Small amounts can add up over time. If you participate in a workplace retirement plan, you might not even notice your slightly smaller paycheck after you increase your contribution amount.

If your expenses are running neck and neck with your income, try to cut back on discretionary spending. If that's not enough, look for ways to lower your fixed costs or explore ways to increase your current income. Budgeting software and smartphone apps can help you analyze your spending patterns and track your savings progress.

Do I have a strategy to reduce debt?

When it comes to your personal finances, reducing debt should always be a priority. Whether you have debt from student loans, credit cards, auto loans, or a mortgage, have a plan to pay down your debt as quickly as possible. Here are some tips:

• Credit cards. Keep track of your credit card balances and be aware of interest rates and hidden fees. Manage your payments so you avoid late fees. Pay off high-interest debt first. Avoid charging more than you can pay off at the end of each billing cycle.

• Student loans. Are you a candidate for income-based repayment? You can learn more at the Federal Student Aid website.

• Additional payments. Making additional loan payments above and beyond your regular loan payments (or the minimum payment due on credit cards) can reduce the length of your loan and the total interest paid. Online calculators can help you see the impact of making additional payments. For example, if you're halfway through a 30-year, $250,000 mortgage with a fixed 4.5% interest rate, an additional principal payment of $150 a month can shave two years off your mortgage. An extra $250 a month can shave off three years!

• Refinancing. If you currently have consumer loans, such as a mortgage or auto loan, take a look at your interest rate. If you're paying a higher-than-average interest rate, you may want to consider refinancing. Refinancing to a lower interest rate can result in lower monthly payments and potentially less interest paid over the loan's term. Keep in mind that refinancing often involves its own costs (e.g., points and closing costs for mortgage loans), and you should factor these into your calculation of how much refinancing might save you.

• Loan consolidation involves combining individual loans into one larger loan, allowing you to make only one monthly payment instead of many. Consolidating your loans has several advantages, including saving you time on bill paying and record keeping and making it easier for you to visualize paying down your debt. In addition, you may be able to get a lower interest rate.

• Paying down debt vs. investing. To decide whether it's smarter to pay down debt or invest, compare the anticipated rate of return on your investment with the interest rate you pay on your debt. If you would earn less on your investment than you would pay in interest on your debt, then using your extra cash to pay off debt may be the smarter choice. For example, let's say you have $2,000 in an account that earns 1% per year. Meanwhile, you have a credit card balance of $2,000 that incurs annual interest at a rate of 17%. Over the course of a year, your savings account earns $20 interest while your credit card costs you $340 in interest. So paying off your credit card debt first may be the better choice.

Do my taxes need some fine-tuning?

Spring also means the end of the tax filing season. You might ask yourself the following questions:

• Am I getting a large tax refund, or will I owe taxes? In either case, you may want to adjust the amount of federal or state income tax withheld from your paycheck by filing a new Form W-4 with your employer.

• What else can I learn from my tax return? Now is also a good time to assess tax planning opportunities for the coming year, when you still have many months left to implement any strategy. You can use last year's tax return as a reference point, then make any anticipated adjustments to your income and deductions for the coming year.

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Saving for Retirement and a Child's Education at the Same Time

You want to retire comfortably when the time comes. You also want to help your child go to college. So how do you juggle the two? The truth is, saving for your retirement and your child's education at the same time can be a challenge. But take heart — you may be able to reach both goals if you make some smart choices now.

Know what your financial needs are

The first step is to determine your financial needs for each goal. Answering the following questions can help you get started:

For retirement:

• How many years until you retire?

• Does your company offer an employer-sponsored retirement plan or a pension plan? Do you participate? If so, what's your balance? Can you estimate what your balance will be when you retire?

• How much do you expect to receive in Social Security benefits? One way to get an estimate of your future Social Security benefits is to use the benefit calculators available on the Social Security Administration's website. You can create a Social Security account where you’re able to view your online Social Security Statement. Your statement contains a detailed record of your earnings, as well as estimates of retirement, survivor and disability benefits.

• What standard of living do you hope to have in retirement? For example, do you want to travel extensively, or will you be happy to stay in one place and live more simply?

• Do you or your spouse expect to work part-time in retirement?

For college:

• How many years until your child starts college?

• Will your child attend a public or private college? What's the expected cost?

• Do you have more than one child whom you'll be saving for?

• Does your child have any special academic, athletic, or artistic skills that could lead to a scholarship?

• Do you expect your child to qualify for financial aid?

Figure out what you can afford to put aside each month

After you know what your financial needs are, the next step is to determine what you can afford to put aside each month. To do so, you'll need to prepare a detailed family budget that lists all of your income and expenses. Keep in mind, though, that the amount you can afford may change from time to time as your circumstances change. Once you've come up with a dollar amount, you'll need to decide how to divvy up your funds.

Retirement takes priority

Though college is certainly an important goal, you should probably focus on your retirement if you have limited funds. With generous corporate pensions mostly a thing of the past, the burden is primarily on you to fund your retirement. But if you wait until your child is in college to start saving, you'll miss out on years of potential tax-deferred growth and compounding of your money. Remember, your child can always attend college by taking out loans (or maybe even with scholarships), but there's no such thing as a retirement loan!

If possible, save for your retirement and your child's college at the same time

Ideally, you'll want to try to pursue both goals at the same time. The more money you can squirrel away for college bills now, the less money you or your child will need to borrow later. Even if you can allocate only a small amount to your child's college fund, say $50 or $100 a month, you might be surprised at how much you can accumulate over many years. For example, if you saved $100 every month and earned 8% annually, you'd have $18,415 in your child's college fund after 10 years.

If you're unsure about how to allocate your funds between retirement and college, a professional financial planner may be able to help. This person can also help you select appropriate investments for each goal. Remember, just because you're pursuing both goals at the same time doesn't necessarily mean that the same investments will be suitable. It may be appropriate to treat each goal independently.

Help! I can't meet both goals

If the numbers say that you can't afford to educate your child or retire with the lifestyle you expected, you'll probably have to make some sacrifices. Here are some suggestions:

• Defer retirement: The longer you work, the more money you'll earn and the later you'll need to dip into your retirement savings.

• Work part-time during retirement

• Reduce your standard of living now or in retirement: You might be able to adjust your spending habits now in order to have money later. You could also consider cutting back in retirement.

• Increase your earnings now: You could increase your hours at your current job, find another job with better pay, take a second job, or have a previously stay-at-home spouse return to the workforce.

• Invest more aggressively: If you have several years until retirement or college, you might be able to earn more money by investing more aggressively but remember that aggressive investments mean a greater risk of loss. Note that no investment strategy can guarantee success.

• Expect your child to contribute more money to college: Despite your best efforts, your child may need to take out student loans or work part-time to earn money for college.

• Think of other creative ways to reduce education costs: Your child could attend a local college and live at home to save on room and board, enroll in an accelerated program to graduate in three years instead for four, take advantage of a cooperative education where paid internships alternate with course work, or defer college for a year and work to earn money for college.

Can retirement accounts be used to save for college?

Yes, but should they be? That depends on your family's circumstances. Most financial planners discourage paying for college with funds from a retirement account. They also discourage using retirement funds for a child's college education if doing so will leave you with no funds in your retirement years.

However, you can certainly tap your retirement accounts to help pay the college bills if necessary. With IRAs, you can withdraw money penalty free for college expenses, even if you're under the age of 59½ (though there may be income tax consequences for the money you withdraw). But with an employer-sponsored retirement plan like a 401(k) or 403(b), you'll generally pay a 10% penalty on any withdrawals made before you reach age 59½ (age 55 or 50 in some cases), even if the money is used for college expenses. There may be income tax consequences, as well. If you are near to selecting a college, check to see if discounts from prior levels of tuition are available and maybe even do some shopping.

IMPORTANT DISCLOSURES

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual’s personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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International Women's Day: A Look at the Top Women in Finance

The culmination of successes that women have achieved through the years cannot be expressed enough, but on this one day we celebrate their achievements and raise awareness about women's equality.  As we approach yet another International Women's Day, we’d like to take the time to reflect on the meaning and history of the holiday as well as showcase some successful women within the finance industry.

What is International Women's Day?

International women’s day (IWD) is now held each year on March 8th but first began in the early 1900s during a time when expansion, growth, and new radical ideals first surfaced for women and their rights. 

Issues such as voting rights, jobs, and the pay gap drove women to begin protests and become more vocal on their push for change. Today those same ideals drive us to honor this day and bear witness to the history surrounding women’s suffrage and equality. 

The roles women play in the finance industry

It’s important to acknowledge and commend the slow but steady growth that women in leadership roles in the finance industry have made over the past few decades. 

Even in the face of women’s progression that we’ve seen over the past century the fact still remains that white males hold more than 60% of all C-suite executive positions. Here is the full scope of the representation in finance as told by McKinsey & Co research.

5 examples of top women in finance

There are, however, outliers to these statistics. Ones that give hope and promise to a progressive future for women in finance. Let’s take a look at 5 examples of women in top finance positions as well as their accomplishments in a slow-changing industry. 

1. Mary Callahan Erdoes

A prime example of a successful woman in finance, Mary Callahan Erodes serves as the CEO, Asset and Wealth Management, J.P. Morgan Chase. Erodes has served as the CEO since 2009 but has been with J.P Morgan since 1996. 

Erodes possesses a bachelor’s degree from Georgetown University in mathematics, an accomplishment for her time given that she was one of the first to ever major in mathematics from Georgetown. She then went on to receive her MBA from Harvard University while studying management. 

Her achievements include:

• Serving on the board of the Robin Hood Foundation in New York City

• Board member at Georgetown University 

• Serving on the Global Advisory Council at Harvard University

• Managing over $4 trillion in client assets

• Features as Bloomberg’s 2021 list of 50 most influential

• Forbes list as Most Powerful Women in the world

2. Emily Portney

Emily Portney currently serves as the Senior Executive Vice President and Global Head of BNY Mellon’s Asset Servicing Business. In this role, she provides custody, fund services, and data and platform solutions to asset owners, traditional and alternative investment managers, insurance companies, banks and broker-dealers.

Portney possesses a Bachelor of Arts in sociology and marketing as well as an MBA from Columbia University in New York. She entered the finance realm in 1993 as a trainee at JP Morgan and has moved ahead by leaps and bounds in the past two decades. 

Her achievements include:

• Previously the Chief Financial Officer of BNY Mellon

• Serving on the board of directors for MarketAxes

• Serving on the board for Depository Trust and Clearing Corporation

• Member of the BNY Mellon executive committee

3. Charlotte McLaughlin

Charlotte McLaughlin serves as the President and CEO of PNC Capital Markets. She claimed her current role in July of 2002 after accruing over 30 years of banking and securities experience. 

McLaughlin received her Bachelor of Science from Pennsylvania State University in 1975 followed by her MBA from The University of Pittsburgh in 1981. Her responsibilities span from banking, asset management, and international financial institutions.

Her achievements include:

• Serving on the board of directors of the National Futures Association

• Serving on the advisory board for Penn State Schreyer Honors College

• Elected member of The Committee of 200, a global organization of women entrepreneurs 

4. Yie-Hsin Hung

Ms. Hung has over 30 years of experience in the world of finance. She serves as president and CEO of State Street Global Advisor, the investment management arm of State Street Corporation. Hung received her Bachelor of Science degree in Mechanical Engineering from Northwestern University as well as an MBA from Harvard University. 

Her accomplishments include:

• ·       Chief Executive Officer of New York Life Investment Management

• In 2021, she was also named by Forbes to its list of 50 over 50

• Tripling the increase of third-party assets under management 

• Bringing in over $325 billion in assets 

• Leading the firm's successful expansion into Europe, Asia, and Australia

5. Katy Knox

Katy Knox serves as the President of Bank of America Private Bank as well as a member of BoA’s executive management team. She has over 25 years of industry experience and is responsible for banking, client experience, and lending. 

Knox earned her bachelor's degree in business administration from Elmira College followed by her MBA from Boston College. 

Her accomplishments include:

• Recognized as one of the Top 100 Diverse Executive & Emerging Leaders by Diverse MBA magazine

• Vice-chair of Bank of America’s global diversity and inclusion council

• Being a mentor to women leaders and advocating for more opportunity

• Serves on the boards of trustees for Carnegie Hall, JFK Library Foundation and Nantucket Film Festival.

Key Takeaways

Women have made substantial strides not only in the financial industry but also worldwide through advocating for equality and measurable enhancements for women in their industries. 

As we celebrate this International Women’s Day, let’s remember these inspiring women and celebrate their achievements as well as continue to pave the way forward for the next generation. 

“The most important thing one woman can do for another is expand her sense of actual possibilities”  - Adrienne Rich

CRN202507-6020645

3 Key Differences Between Traditional and Roth IRAs You Need to Know

There are such things as good and bad retirement accounts, but which is which often depends on your situation. Take traditional and Roth IRAs, for example. They’re similar in a lot of ways, but one of them is probably going to offer you better tax advantages than the other. Here’s a closer look at some of the key differences between the two accounts so you can decide which one deserves your money.

1. When you pay taxes on your money

The biggest difference between traditional and Roth IRAs is that traditional IRAs use pre-tax dollars, while Roth IRAs use after-tax dollars. That means traditional IRA contributions reduce your taxable income for the year, while you owe taxes on your Roth IRA contributions. But when it’s time to withdraw funds, things flip. You can take your Roth funds out tax-free, but the government demands a cut of your traditional IRA withdrawals.

Both of them give you a tax break, so you might think you’ll come out about the same either way, but that’s not necessarily true. If you’re earning a lot of money right now, paying taxes this year might not make sense. You’re likely in a higher tax bracket, which means you’ll give more of your money back to the government. If you delay taxes until retirement, you’ll save yourself some money on taxes this year and possibly in the future. If your income is lower in retirement, you might end up in a lower tax bracket, helping you to hold onto more of your money.

But a Roth IRA could be better if you’re not earning a lot of money right now or you don’t believe your retirement spending will change significantly from your current income. In that case, paying taxes upfront is definitely the way to go, because you’ll only owe taxes on your contributions. Your earnings will grow tax-free.

2. Traditional IRAs have required minimum distributions

The government wants to make sure you withdraw your traditional IRA funds eventually so it can claim its cut. That’s why it institutes required minimum distributions (RMDs) for these accounts. As of 2024, the age for RMDs is 72 for everyone. Previously, individuals who reached 70 1/2 before 2020 had to begin RMDs at that time.

How much you need to withdraw depends on your age and IRA balance. If you had $100,000 in your IRA and you’re 72 this year, you’d divide the $100,000 by the 26.0 distribution period for 72-year-olds and you’d end up with approximately $3,846. This is the minimum you must withdraw from your traditional IRA this year, though you can take out more if you want. Failure to take out at least your RMD results in a 50% penalty on the amount you should have withdrawn.

Roth IRAs don’t have RMDs because you already paid taxes on those funds in the year you made your contributions, so you can leave them untouched as long as you want. This can give those savings more time to grow, so they could potentially be worth more in time.

If you decide you’d rather not deal with RMDs in retirement, you can always convert your traditional IRA funds to Roth IRA funds, but you must pay taxes in the year of the conversion if you do this. Whether or not that’s a smart move depends on your taxable income for the year and how you believe that compares to your spending in retirement, as discussed above.

3. You can take penalty-free Roth IRA withdrawals from your contributions at any time

Because you’ve already paid your taxes on your Roth IRA contributions, you can take them out at any time without paying taxes or a penalty. This means you have greater access to your own money, whether it's for an unexpected expense, a first home purchase, or simply a change in plans. However, don't forget that early withdrawals of earnings, not just contributions, from your Roth IRA before age 59 1/2 still incur taxes and a 10% penalty, even with exceptions like disability or education expenses.

Traditional IRAs offer different tax advantages. Your contributions lower your taxable income for the year you make them, which can be a big benefit. But remember, early withdrawals before age 59 1/2 mean paying taxes plus a 10% penalty on the amount you take out (though, again, there are exceptions like first-time home purchases). This means while Roth IRAs offer more flexibility for early access to your contributions, Traditional IRAs can potentially save you more in taxes depending on your income bracket and retirement plans.

You can contribute to both Traditional and Roth IRAs to leverage the benefits of each. The combined contribution limit for both types in 2024 is $7,000, with an increased limit of $8,000 for individuals aged 50 or older. Whether you max out or not, contributing regularly is key to securing a comfortable retirement. Remember, the power of compounding interest over time is your best friend in the long run.

CRN202701-5793933

Dealing with Volatile Markets

Dictionary definitions of dealing with volatile markets span a wide range, including arbitrariness, fickleness, inconstancy, and flexibility. Flexibility seems to be the best fit when discussing how investors may want to respond to the gyrations in the financial markets. Volatility can have multiple causes, but inflation currently is the main driver of investor anxiety, with the Consumer Price Index in the 7% range. Some prognosticators see price hikes leveling off and even declining, while others disagree. Indeed, the cacophony of predictions can keep investors even more uneasy.

What is the average investor to do?

One suggestion by Alan Lerner, who has taught economics at  the NYU School of Business and helped to guide investing at two major banks over his career, is to “get into a stable situation and don’t go crazy over day-to-day movements in the markets. You want to be able to sleep soundly at night.”

It’s important to speak with your financial advisor in these times to assess your risk. Fidelity notes that market downturns may be a reminder that it’s important to regularly review your portfolio and make sure your mix of investments is still appropriate. If it's been a long time since you created your mix of investments or if your situation or feelings about risk have changed, you may want to review or update your plan. The goal is to have a plan that makes sense regardless of short-term market conditions. For most people, stock market drops create uncertainty, sometimes even anxiety. It's natural to wonder if you should try to pull out of the market to avoid losses, or if the investments you hold are just too risky for you.

Age as a Factor

No one can pick tops or bottoms in markets, and one’s age is also a factor. Older people should be defensive in dealing with volatility and cut back on more speculative investments. That does not necessarily mean putting all your money in the bank. For example, one could reduce high-flying growth stocks and turn to less glamorous value stocks where there is a steady return, Mr. Lerner notes. Having some cash equivalents like bank certificates of deposit is another possibility. However, this view does not apply to younger investors who have time on their side. They should not abandon the markets. And remember, bad times in the markets end. The 2008 market crash evolved into a strong recovery although it did take some time. 

CRN202701-5793873

Back to Basics: Disability Insurance

Nobody likes to imagine the worst, but what would happen if you become disabled and can no longer work? For most people, this could mean they no longer have a source of income. Moreover, their ability to provide for themselves or their families and pay the bills is drastically reduced. Disability insurance can be the solution in this situation.

What Is Disability Insurance?

Disability insurance is a cover that offers monthly income if you become disabled and can't work due to an injury or illness. In simpler terms, it’s insurance for your income. Like auto insurance covers your car's damage costs, disability insurance covers you if your income is affected due to a disability.

It’s essential to note that the definition of disability differs between policies. Some covers include conditions like mental health impairments, while others will only cover accidents and injuries.

Types of Disability Insurance

There are 2 primary categories of DI:

·  Short-term DI

·  Long-term DI

As the name suggests, short-term disability (STD) offers benefits for a brief period of disability, usually from 3 months to up to 2 years. On the other hand, long-term disability (LTD) provides coverage for extended periods, typically from two years and beyond.

Short-term DI is common in workplaces as a group cover. It can be a mandatory requirement (employee-paid) or voluntary (employer-paid).

LTD insurance is usually taken by high-income earners or self-employed professionals as it’s more advantageous and costlier. The insurance covers the person's financial needs if they become disabled even after retirement.

Benefits of DI

The primary benefit of DI is that it provides you and your family financial security in case of a disability. In addition to this, there are other benefits:

•  It replaces lost wages up to a specified percentage or amount.

•  It offers coverage if you become disabled due to an accident or illness

•  You can pay the premium with pre-tax dollars, which helps in reducing your taxable income

•  If you’re self-employed, it can be used to offset expenses like rent or mortgage payments and other bills

• It ensures that you will have some form of income even if a disability prevents you from working

Common Terms in DI

Group Disability Insurance: This is a cover provided by an employer to their employees. It typically covers all the employees and offers limited coverage since the employer pays for it.

Individual Disability Insurance: If you’re self-employed or own a business, you can purchase an individual disability insurance policy. The coverage and benefits are more comprehensive as compared to group DI.

Own-Occupation: This type of DI policy covers an individual if they are disabled and unable to work in their specific occupation. For example, if a surgeon becomes disabled and can't operate due to an accident, they will still be covered by their policy.

Any-Occupation: When a disability prevents you from working in any occupation, an any-occupation policy ensures that you will receive benefits. If you can work in another profession, you will not be eligible for the benefits.

Social Security Disability Insurance (SSDI): This type of disability insurance is provided by The Social Security Administration (SSA). The coverage is available to workers who have earned enough work credits and can no longer work due to an accident or illness.

Conclusion

Having disability insurance provides you with financial security. Ultimately, it assures that you will have some income even if an injury or illness prevents you from working. It's important to understand the different types of coverage, terms, and benefits associated with disability insurance to make an informed decision.

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7 Tips for Choosing a Life Insurance Provider

There’s no greater motivation for putting a protection plan in place than for those you love. Among the decisions you need to make when buying life insurance is what company to choose. Here are some tips to help you find the right insurance company for you, your family, and your situation.

Price matters, but it’s not the most important factor

Often, a straight price comparison can cause you to overlook the underlying features of a policy, such as cash value guarantees and return of premium features, that can be of real value over time.

Price quotes may change, so get several of them

Initial price quotes often change after your personal and health information has been assessed. Make sure you get multiple price quotes, so you have choices should some of the final price quotes come back much higher than expected.

Find companies that are financially strong

You want to work with a company that will be around when it’s time to pay the death benefit on the policy. There are a number of independent rating firms, such as Fitch Ratings, Moody’s, A.M. Best Company, and Standard & Poor’s, that issue grades for insurance companies. Additionally, life insurance companies will generally post their ratings on their website. Each rating firm has a different scale, but generally you want to look for a rating in the A range.

Evaluate each company’s menu of offerings

Although many companies sell similar polices, some focus on certain products (i.e. whole life), certain market segments (i.e. seniors, young professionals), or specific careers (i.e. medical professionals).

Look at customer satisfaction scores

You want to work with a company that is going to provide good service and support. One way to gauge an insurer’s reputation is through complaints filed with state regulators. You can access them on the National Association of Insurance Commissioners website. The National Association of Insurance Commissioners is an industry association dedicated to protecting consumers and ensuring fair, competitive, and healthy insurance markets.

Consider using a mutual company

Unlike publicly traded insurance companies which are owned by stockholders, mutual life insurance companies exist to serve the insurance needs of their policyholders who may share in the profits in the form of policy dividends.

Leverage life insurance experts

There are many financial advisors who specialize in life insurance. They have not only an in-depth knowledge of all the various policies available but also access to a wide range of carriers, and they can do the work of matching you with the company and policy that best suits your needs.

We hope you find this list helpful and consider using it as a catalyst to either purchasing life insurance for the first time or reevaluating the coverage you currently have to ensure it still meets your protection needs.

We leave you with a few words of wisdom from LIAM Spokeswoman Kelly Rowland: “Having life insurance truly eases my heart and mind. It means that no matter what, my family can keep looking toward the future.”

CRN202701-5793873

Annuities and Retirement Planning

You may have heard that IRAs and employer-sponsored plans [e.g., 401(k)s] are the best ways to invest for retirement. That's true for many people, but what if you've maxed out your contributions to those accounts and want to save more? An annuity may be an appropriate investment to look into. 

Get the lay of the land 

An annuity is a tax-deferred insurance contract. The details on how it works vary, but here's the general idea. You invest your money (either a lump sum or a series of contributions) with a life insurance company that sells annuities (the annuity issuer). The period when you are funding the annuity is known as the accumulation phase. In exchange for your investment, the annuity issuer promises to make payments to you or a named beneficiary at some point in the future. The period when you are receiving payments from the annuity is known as the distribution phase. Chances are, you'll start receiving payments after you retire. Annuities may be subject to certain charges and expenses, including mortality charges, surrender charges, administrative fees, and other charges. 

Understand your payout options 

Understanding your annuity payout options is very important. Keep in mind that payments are based on the claims-paying ability of the issuer. You want to be sure that the payments you receive will meet your income needs during retirement. Here are some of the most common payout options: 

• You surrender the annuity and receive a lump-sum payment of all of the money you have accumulated. 

• You receive payments from the annuity over a specific number of years, typically between 5 and 20. If you die before this "period certain" is up, your beneficiary will receive the remaining payments. 

• You receive payments from the annuity for your entire lifetime. You can't outlive the payments (no matter how long you live), but there will typically be no survivor payments after you die. 

• You combine a lifetime annuity with a period certain annuity. This means that you receive payments for the longer of your lifetime or the time period chosen. Again, if you die before the period certain is up, your beneficiary will receive the remaining payments. 

• You elect a joint and survivor annuity so that payments last for the combined life of you and another person, usually your spouse. When one of you dies, the survivor receives payments for the rest of his or her life. 

When you surrender the annuity for a lump sum, your tax bill on the investment earnings will be due all in one year. The other options on this list provide you with a guaranteed stream of income (subject to the claims-paying ability of the issuer). They're known as annuitization options because you've elected to spread payments over a period of years. Part of each payment is a return of your principal investment. The other part is taxable investment earnings. You typically receive payments at regular intervals throughout the year (usually monthly, but sometimes quarterly or yearly). The amount of each payment depends on the amount of your principal investment, the particular type of annuity, your selected payout option, the length of the payout period, and your age if payments are to be made over your lifetime. 

Consider the pros and cons 

An annuity can often be a great addition to your retirement portfolio. Here are some reasons to consider investing in an annuity: 

• Your investment earnings are tax deferred as long as they remain in the annuity. You don't pay income tax on those earnings until they are paid out to you. 

• An annuity may be free from the claims of your creditors in some states. 

• If you die with an annuity, the annuity's death benefit will pass to your beneficiary without having to go through probate. 

• Your annuity can be a reliable source of retirement income, and you have some freedom to decide how you'll receive that income. 

• You don't have to meet income tests or other criteria to invest in an annuity. 

• You're not subject to an annual contribution limit, unlike IRAs and employer-sponsored plans. You can contribute as much or as little as you like in any given year. 

• You're not required to start taking distributions from an annuity at age 72 (the required minimum distribution age for IRAs and employer-sponsored plans). You can typically postpone payments until you need the income. 

But annuities aren't for everyone. Here are some potential drawbacks: 

• Contributions to nonqualified annuities are made with after-tax dollars and are not tax deductible. 

• Once you've elected to annuitize payments, you usually can't change them, but there are some exceptions. 

• You can take your money from an annuity before you start receiving payments, but your annuity issuer may impose a surrender charge if you withdraw your money within a certain number of years (e.g., seven) after your original investment. 

• You may have to pay other costs when you invest in an annuity (e.g., annual fees, investment management fees, insurance expenses). 

• You may be subject to a 10% federal penalty tax (in addition to any regular income tax) if you withdraw earnings from an annuity before age 59½, unless you meet one of the exceptions to this rule. 

• Investment gains are taxed at ordinary income tax rates, not at the lower capital gains rate. 

Choose the right type of annuity 

If you think that an annuity is right for you, your next step is to decide which type of annuity. Overwhelmed by all of the annuity products on the market today? Don't be. In fact, most annuities fit into a small handful of categories. Your choices basically revolve around two key questions. 

First, how soon would you like annuity payments to begin? That probably depends on how close you are to retiring. If you're near retirement or already retired, an immediate annuity may be your best bet. This type of annuity starts making payments to you shortly after you buy the annuity, typically within a year or less. But what if you're younger, and retirement is still a long-term goal? Then you're probably better off with a deferred annuity. As the name suggests, this type of annuity lets you postpone payments until a later time, even if that's many years down the road. 

Second, how would you like your money invested? With a fixed annuity, the annuity issuer determines an interest rate to credit to your investment account. An immediate fixed annuity guarantees a particular rate, and your payment amount never varies. A deferred fixed annuity guarantees your rate for a certain number of years; your rate then fluctuates from year to year as market interest rates change. A variable annuity, whether immediate or deferred, gives you more control and the chance to earn a better rate of return (although with a greater potential for gain comes a greater potential for loss of principal). You select your own investments from the subaccounts that the annuity issuer offers. Your payment amount will vary based on how your investments perform. 

Note: A variable annuity is a long-term investment vehicle designed for retirement purposes. Generally, annuity contracts have limitations, exclusions, holding periods, termination provisions, terms for keeping the annuity in force, and fees and charges which can include mortality and expense charges, account fees, sales and surrender charges, investment management fees, administrative fees, and charges for optional benefits. Withdrawals reduce annuity contract (living and death) benefits and values. Variable annuities are not guaranteed by the FDIC or any other government agency; they are not deposits of, nor are they guaranteed or endorsed by, any bank or savings association. Any guarantees are contingent on the claims-paying ability and financial strength of the issuing company. The investment return and principal value of an investment option are not guaranteed. Because variable annuity investment options fluctuate with changes in market conditions, the principal may be worth more or less than the original amount invested when the annuity is surrendered. 

Variable annuities are sold by prospectus. You should consider the investment objectives, risk, charges and expenses, and underlying investment options carefully before investing. The prospectus, which contains this and other information about the variable annuity, can be obtained from the insurance company issuing the variable annuity or from your financial professional. You should read the prospectus carefully before you invest. 

Shop around 

It pays to shop around for the right annuity. In fact, doing a little homework could save you hundreds of dollars a year or more. Why? Rates of return and costs can vary widely between different annuities. You'll also want to shop around for a reputable, financially sound annuity issuer. There are firms that make a business of rating insurance companies based on their financial strength, investment performance, and other factors. Consider checking out these ratings. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. CRN202612-5602180 

Life Insurance at Various Life Stages

Your need for life insurance changes as your life changes. When you're young, you typically have less need for life insurance, but that changes as you take on more responsibility and your family grows. Then, as your responsibilities once again begin to diminish, your need for life insurance may decrease. Let's look at how your life insurance needs change throughout your lifetime. 

Footloose and fancy-free 

As a young adult, you become more independent and self-sufficient. You no longer depend on others for your financial well-being. But in most cases, your death would still not create a financial hardship for others. For most young singles, life insurance is not a priority. 

Some would argue that you should buy life insurance now, while you're healthy and the rates are low. This may be a valid argument if you are at a high risk for developing a medical condition (such as diabetes) later in life. But you should also consider the earnings you could realize by investing the money now instead of spending it on insurance premiums. 

If you have a mortgage or other loans that are jointly held with a cosigner, your death would leave the cosigner responsible for the entire debt. You might consider purchasing enough life insurance to cover these debts in the event of your death. Funeral expenses are also a concern for young singles, but it is typically not advisable to purchase a life insurance policy just for this purpose, unless paying for your funeral would burden your parents or whomever would be responsible for funeral expenses. Instead, consider investing the money you would have spent on life insurance premiums. 

Your life insurance needs increase significantly if you are supporting a parent or grandparent, or if you have a child before marriage. In these situations, life insurance could provide continued support for your dependent(s) if you were to die. 

Going to the chapel 

Married couples without children typically still have little need for life insurance. If both spouses contribute equally to household finances and do not yet own a home, the death of one spouse will usually not be financially catastrophic for the other. 

Once you buy a house, the situation begins to change. Even if both spouses have well-paying jobs, the burden of a mortgage may be more than the surviving spouse can afford on a single income. Credit card debt and other debts can contribute to the financial strain. 

To make sure either spouse could carry on financially after the death of the other, both of you should probably purchase a modest amount of life insurance. At a minimum, it will provide peace of mind knowing that both you and your spouse are protected. 

Again, your life insurance needs increase significantly if you are caring for an aging parent, or if you have children before marriage. Life insurance becomes extremely important in these situations, because these dependents must be provided for in the event of your death. 

Your growing family 

When you have young children, your life insurance needs reach a climax. In most situations, life insurance for both parents is appropriate. 

Single-income families are completely dependent on the income of the breadwinner. If he or she dies without life insurance, the consequences could be disastrous. The death of the stay-at-home spouse would necessitate costly day-care and housekeeping expenses. Both spouses should carry enough life insurance to cover the lost income or the economic value of lost services that would result from their deaths. 

Dual-income families need life insurance, too. If one spouse dies, it is unlikely that the surviving spouse will be able to keep up with the household expenses and pay for child care with the remaining income. 

Moving up the ladder 

For many people, career advancement means starting a new job with a new company. At some point, you might even decide to be your own boss and start your own business. It's important to review your life insurance coverage any time you leave an employer. 

Keep in mind that when you leave your job, your employer-sponsored group life insurance coverage will usually end, so find out if you will be eligible for group coverage through your new employer, or look into purchasing life insurance coverage on your own. You may also have the option of converting your group coverage to an individual policy. This may cost significantly more, but may be wise if you have a pre-existing medical condition that may prevent you from buying life insurance coverage elsewhere. 

Make sure that the amount of your coverage is up-to-date, as well. The policy you purchased right after you got married might not be adequate anymore, especially if you have kids, a mortgage, and college expenses to consider. Business owners may also have business debt to consider. If your business is not incorporated, your family could be responsible for those bills if you die. 

Single again 

If you and your spouse divorce, you'll have to decide what to do about your life insurance. Divorce raises both beneficiary issues and coverage issues. And if you have children, these issues become even more complex. 

If you and your spouse have no children, it may be as simple as changing the beneficiary on your policy and adjusting your coverage to reflect your newly single status. However, if you have kids, you'll want to make sure that they, and not your former spouse, are provided for in the event of your death. This may involve purchasing a new policy if your spouse owns the existing policy, or simply changing the beneficiary from your spouse to your children. The custodial and noncustodial parent will need to work out the details of this complicated situation. If you can't come to terms, the court will make the decisions for you. 

Your retirement years 

Once you retire, and your priorities shift, your life insurance needs may change. If fewer people are depending on you financially, your mortgage and other debts have been repaid, and you have substantial financial assets, you may need less life insurance protection than before. But it's also possible that your need for life insurance will remain strong even after you retire. For example, the proceeds of a life insurance policy can be used to pay your final expenses or to replace any income lost to your spouse as a result of your death (e.g., from a pension or Social Security). Life insurance can be used to pay estate taxes or leave money to charity. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. CRN202612-5602180 

Taking Advantage of Employer-Sponsored Retirement Plans

Employer-sponsored qualified retirement plans such as 401(k)s are some of the most powerful retirement savings tools available. If your employer offers such a plan and you're not participating in it, you should be. Once you're participating in a plan, try to take full advantage of it. 

Understand your employer-sponsored plan 

Before you can take advantage of your employer's plan, you need to understand how these plans work. Read everything you can about the plan and talk to your employer's benefits officer. You can also talk to a financial planner, a tax advisor, and other professionals. 

Recognize the key features that many employer-sponsored plans share: 

• Your employer automatically deducts your contributions from your paycheck. You may never even miss the money — out of sight, out of mind. 

• You decide what portion of your salary to contribute, up to the legal limit. And you can usually change your contribution amount on certain dates during the year or as needed. 

• With 401(k), 403(b), 457(b), SARSEPs, and SIMPLE plans, you contribute to the plan on a pre-tax basis. Your contributions come off the top of your salary before your employer withholds income taxes. 

• Your 401(k), 403(b), or 457(b) plan may let you make after-tax Roth contributions — there's no up-front tax benefit but qualified distributions are entirely tax free. 

• Your employer may match all or part of your contribution up to a certain level. You typically become vested in these employer dollars through years of service with the company. 

• Your funds grow tax deferred in the plan. You don't pay taxes on investment earnings until you withdraw your money from the plan. 

• You'll pay income taxes (and possibly an early withdrawal penalty) if you withdraw your money from the plan. 

• If your plan allows loans, you may be able to borrow a portion of your vested balance, up to specified limits. 

• Your creditors cannot reach your plan funds to satisfy your debts. 

Contribute as much as possible 

The more you can save for retirement, the better your chances of retiring comfortably. If you can, max out your contribution up to the legal limit (or plan limits, if lower). If you need to free up money to do that, try to cut certain expenses. 

Why put your retirement dollars in your employer's plan instead of somewhere else? One reason is that your pre-tax contributions to your employer's plan lower your taxable income for the year. This means you save money in taxes when you contribute to the plan — a big advantage if you're in a high tax bracket. For example, if you earn $100,000 a year and contribute $10,000 to a 401(k) plan, you'll pay income taxes on $90,000 instead of $100,000. (Roth contributions don't lower your current taxable income but qualified distributions of your contributions and earnings — that is, distributions made after you satisfy a five-year holding period and reach age 59½, become disabled, or die — are tax free.) 

Another reason is the power of tax-deferred growth. Your investment earnings compound year after year and aren't taxable as long as they remain in the plan. Over the long term, this gives you the opportunity to build an impressive sum in your employer's plan. You should end up with a much larger balance than somebody who invests the same amount in taxable investments at the same rate of return. 

For example, say you participate in your employer's tax-deferred plan (Account A). You also have a taxable investment account (Account B). Each account earns 6% per year. You're in the 24% tax bracket and contribute $5,000 to each account at the end of every year. After 40 years, the money placed in a taxable account would be worth $567,680. During the same period, the tax-deferred account would grow to $820,238. Even after taxes have been deducted from the tax-deferred account, the investor would still receive $623,381. (Note: This example is for illustrative purposes only and does not represent a specific investment.) 

Capture the full employer match 

If you can't max out your 401(k) or other plan, you should at least try to contribute up to the limit your employer will match. Employer contributions are basically free money once you're vested in them (check with your employer to find out when vesting happens). By capturing the full benefit of your employer's match, you'll be surprised how much faster your balance grows. If you don't take advantage of your employer's generosity, you could be passing up a significant return on your money. 

For example, you earn $30,000 a year and work for an employer that has a matching 401(k) plan. The match is 50 cents on the dollar up to 6% of your salary. Each year, you contribute 6% of your salary ($1,800) to the plan and receive a matching contribution of $900 from your employer. 

Evaluate your investment choices carefully 

Most employer-sponsored plans give you a selection of mutual funds or other investments to choose from. Make your choices carefully. The right investment mix for your employer's plan could be one of your keys to a comfortable retirement. That's because over the long term, varying rates of return can make a big difference in the size of your balance. 

Note: Before investing in a mutual fund, carefully consider the investment objectives, risks, charges, and expenses of the fund. This information can be found in the prospectus, which can be obtained from the fund. Read it carefully before investing. 

Research the investments available to you. How have they performed over the long term? How much risk will they expose you to? Which ones are best suited for long-term goals like retirement? You may also want to get advice from a financial professional (either your own, or one provided through your plan). He or she can help you pick the right investments based on your personal goals, your attitude toward risk, how long you have until retirement, and other factors. Your financial professional can also help you coordinate your plan investments with your overall investment portfolio. 

Know your options when you leave your employer 

When you leave your job, your vested balance in your former employer's retirement plan is yours to keep. You have several options at that point, including: 

• Taking a lump-sum distribution. Before choosing this option, consider that you'll pay income taxes and possibly a penalty on the amount you withdraw. Plus, you're giving up the continued potential of tax-deferred growth. 

• Leaving your funds in the old plan, growing tax deferred. (Your old plan may not permit this if your balance is less than $5,000, or if you've reached the plan's normal retirement age — typically age 65.) This may be a good idea if you're happy with the plan's investments or you need time to decide what to do with your money. 

• Rolling your funds over to an IRA or a new employer's plan (if the plan accepts rollovers). This may also be an appropriate move because there will be no income taxes or penalties if you do the rollover properly (your old plan will withhold 20% for income taxes if you receive the funds before rolling them over, and you'll need to make up this amount out of pocket when investing in the new plan or IRA). Plus, your funds continue to potentially benefit from tax-deferred growth. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. CRN202612-5602180 

Teaching Your Teen about Money

Your teen is becoming more independent, but still needs plenty of advice from you. With more money to spend and more opportunities to spend it, your teen can easily get into financial trouble. So before money burns a hole in your child's pocket, teach him or her a few financial lessons. With your help, your teen will soon develop the self-confidence and skills he or she needs to successfully manage money in the real world. 

Lesson 1: Handling earnings from a job 

Teens often have more expenses than younger children, and your child may be coming to you for money more often. But with you holding the purse strings, your teen may have difficulty making independent financial decisions. 

One solution? Encourage your teen to get a part-time job that will enable him or her to earn money for expenses. Here are some things you might want to discuss with your teen when he or she begins working: 

• Agree on what your child's pay should be used for. Now that your teen is working, will he or she need to help out with car insurance or clothing expenses, or do you want your teen to earmark a portion of each paycheck for college? 

• Talk to your teen about taxes. Show your child how FICA taxes and regular income taxes can take a bite out of his or her take-home pay. 

• Introduce your teen to the concept of paying yourself first. Encourage your teen to deposit a portion of every paycheck in a savings account before spending any of it. 

A teen who is too young to get a job outside the home can make extra cash by babysitting or doing odd jobs for you, neighbors, or relatives. This money can supplement any allowance you choose to hand out, enabling your young teen to get a taste of financial independence. 

Lesson 2: Developing a budget 

Developing a written spending plan or budget can help your teen learn to be accountable for his or her finances. Your ultimate goal is to teach your teen how to achieve a balance between money coming in and money going out. To develop a spending plan, have your teen start by listing out all sources of regular income (e.g., an allowance or earnings from a part-time job). Next, have your teen brainstorm a list of regular expenses (don't include anything you normally pay for). Finally, subtract your teen's expenses from his or her income. If the result shows that your teen won't have enough income to meet his or her expenses, you'll need to help your teen come up with a plan for making up the shortfall. 

Here are some ways you can help your teen learn about budgeting: 

• Consider giving out a monthly, rather than weekly, allowance. Tell your teen that the money must last for the whole month, and encourage him or her to keep track of what's been spent. 

• Encourage your teen to think spending decisions through rather than buying items right away. Show your teen how comparing prices or waiting for an item to go on sale can save him or her money. 

• Suggest ways your teen can earn more money or cut back on expenses to resolve a budget shortfall. 

• Show your teen how to modify a budget by categorizing expenses as needs (expenses that are unavoidable) and wants (expenses that could be cut if necessary). 

• Resist the temptation to bail your teen out. If your teen can depend on you to come up with extra cash, he or she will never learn to manage money wisely. But don't be judgmental--your teen will inevitably make some spending mistakes along the way. Your child should know that he or she can always come to you for information, support, and advice. 

Lesson 3: Saving for the future 

As a youngster, your child saved up for a short-term goal such as buying a favorite toy. But now that your child is a teen, he or she is ready to focus on saving for larger goals such as a new computer or a car and longer-term goals such as college. Here are some ways you can encourage your teen to save for the future: 

• Have your teen put savings goals in writing to make them more concrete. 

• Encourage your child to set goals that are based on his or her values, not on keeping up with what other teens have or want. 

• Motivate your child by offering to match what he or she saves towards a long-term goal. For instance, for every dollar your child sets aside for college, you might contribute 50 cents or 1 dollar. 

• Consider increasing your teen's allowance if he or she is too young to get a part-time job. 

• Praise your teen for showing responsibility when he or she reaches a financial goal. Teens still look for, and count on, their parent's approval. 

• Open up a savings account for your child if you haven't already done so. 

• Introduce your teen to the basics of investing by opening an investment account for your teen (if your teen is a minor, this will be a custodial account). Look for an account that can be opened with only a low initial contribution at an institution that supplies educational materials introducing teens to basic investment terms and concepts. 

Lesson 4: Using credit wisely 

You can take some comfort in the fact that credit card companies require an adult to cosign a credit card agreement before they will issue a card to someone under the age of 21 (unless that person can prove that he or she has the financial resources to repay the credit card debt), but you can't ignore the credit card issue altogether. Many teens today use credit cards, and it probably won't be long until your teen asks for one too. 

If you decide to cosign a credit card application for your teen, ask the credit card company to assign a low credit limit (e.g., $300). This can help your child learn to manage credit without getting into serious debt. 

Here are some things to discuss with your teen before he or she uses a credit card: 

• Set limits on what the card can be used for (e.g., emergencies, clothing). 

• Review the credit card agreement, and make sure your child understands how much interest will accrue on the unpaid balance, what grace period applies, and what fees will be charged. 

• Agree on how the bill will be paid, and what will happen if your child can't pay the bill. 

• Make sure your child understands how long it will take to pay off a credit card balance if he or she only makes minimum payments. You can demonstrate this using an online calculator or by reviewing the estimate provided on each month's credit card statement. 

If putting a credit card in your teen's hands is a scary thought, you may want to start off with a prepaid spending card. A prepaid spending card looks like a credit card, but works more like a prepaid phone card. You load the card with the dollar amount you choose and your teen can generally use it anywhere a credit card is accepted. Your teen's purchases are deducted from the card balance, and you can transfer more money to the card if necessary. Although there may be some fees associated with the card, no interest or debt accrues. 

One thing you may especially like about prepaid spending cards is that they allow your teen to gradually get the hang of using credit responsibly. Because you can access account information online or over the phone, you can monitor your teen's spending habits, then sit down and talk with your teen about money management issues. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. CRN202612-5602180 

Umbrella Liability Insurance

When your local weather forecaster tells you that it's going to rain, what do you do? That's easy--you reach for your umbrella. So why not purchase an umbrella that can protect you in stormy financial weather? Umbrella liability insurance (ULI) can do just that. By providing liability protection above and beyond the basic coverage that homeowners/renters and auto insurance policies offer, ULI can protect you against the catastrophic losses that can occur if you are sued. 

Although ULI can be purchased as a separate policy, your insurer will require that you have basic liability coverage (i.e., homeowners/renters insurance, auto insurance, or both) before you can purchase an umbrella liability policy. ULI is often referred to as excess coverage. If you are found to be legally responsible for injuring someone or damaging someone's property, the umbrella policy will either pay for the part of the claim in excess of the limits of your basic liability policy or pay for certain losses that are not covered. 

Why now? It's not even raining 

These days, it's not unusual to hear of $2 million, $10 million, and even $20 million court judgments against individuals. If someone is injured in your home, or if you cause a serious auto accident, you could have to pay such a judgment. If you don't have an umbrella liability policy at the time of the accident, anything above the limits of your homeowners/renters or auto insurance policy will have to come out of your pocket. 

Here's an example of how ULI works to protect you. Say you have an auto insurance policy with a liability limit of $100,000 per accident. You also have a $1 million umbrella liability policy. You're later found responsible for a serious automobile accident, and the court finds you liable for $700,000 in damages. In this case, your auto insurance would pay the first $100,000 of the judgment, which would satisfy the deductible under your umbrella policy. Your umbrella policy would then cover the portion of the judgment not covered by your auto insurance ($600,000). 

You should also be aware that certain types of liability claims (e.g., libel and slander) are not covered under basic homeowners, auto, or other types of insurance policies. An endorsement can be added to these policies to provide some protection against these types of personal injury claims. Or, you can purchase ULI, which does cover these claims. 

What's covered? 

A typical umbrella liability policy provides the following protection, up to the coverage limits specified in the policy: 

• Protection for claims of bodily injuries or property damage caused by you, members of your household, or hazards on your property, for which you are found legally liable 

• Personal liability coverage for incidents that occur on or off your property 

• Additional protection above your basic auto policy for auto-related liabilities 

• Protection against non-business-related personal injury claims, such as slander, libel, wrongful eviction, and false arrest 

• Legal defense costs for a covered loss, including lawyers' fees and associated court costs 

What's not covered? 

Umbrella liability insurance typically provides extremely broad coverage. Furthermore, if something is not expressly excluded from coverage, it is covered. Exclusions vary from one insurer to another and from one policy to another, but the following are some items typically excluded from coverage: 

• Intentional damage caused by you or a member of your family or household 

• Damages arising out of business or professional pursuits 

• Liability that you accept under the terms of a contract or agreement 

• Liability related to the ownership, maintenance, and use of aircraft, nontraditional watercraft (e.g., jet skis, air boats), and most recreational vehicles 

• Damage to property owned, used, or maintained by you (the insured) 

• Damage covered under a workers' compensation policy 

• Liability arising as a result of war or insurrection 

How big of an umbrella are we talking about? 

Determining how much liability coverage you need is not an exact science. You might think that you need only enough liability insurance to protect your assets, but a large judgment against you could easily wipe out your assets and put your future earnings in jeopardy. That's why you should also consider factors such as how often you have guests in your home, whether you operate a home-based business, how much you drive, whether you have teenage drivers in your home, and whether your lifestyle gives the impression that you have "deep pockets." 

Coverage limits vary, but a typical policy will provide liability coverage worth $1 million to $10 million. Of course, as your coverage limit increases, the premium will also increase. You need to decide both how much insurance you need and how much insurance you can afford. You'll want to have enough protection, but not too much. Look at it this way: Have you ever seen a five-year-old child walking under a big golf umbrella or a 300 lb. football player using a pocket-sized umbrella? One has too much protection and the other not enough. Your insurance agent can help you determine how much coverage you need. 

Where can I buy an umbrella liability policy? 

Almost any insurer who writes auto and home insurance policies will also sell umbrella liability policies. In fact, you may be eligible for a multipolicy discount if you purchase an umbrella policy from your current insurer. Of course, it's important to shop around and make sure that you're getting the right coverage for your needs and the most coverage for your money. If you want to do some research on your own, try surfing the Internet, where you can get price quotes and answers to your questions in an instant. 

IMPORTANT DISCLOSURES 

Broadridge Investor Communication Solutions, Inc. does not provide investment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual's personal circumstances. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. CRN202612-5602180 

Plan for the Future, Protect Your Assets: Your Essential Guide to Retirement Healthcare Planning

Retirement healthcare planning is the process of strategizing and securing healthcare coverage and funds for medical expenses during retirement. It’s crucial because healthcare costs tend to rise with age, and without proper planning, retirees may deplete their savings or face financial hardships. 

What is Retirement Healthcare Planning? 

Retirement healthcare planning is a crucial move due to the substantial financial burden associated with healthcare in retirement. Proactive planning secures your financial well-being and ensures access to necessary medical services.  

Several retirement healthcare plans exist, including government programs like Medicare and Medicaid and private health insurance. They provide retirees with versatile options for their healthcare costs. 

Benefits of Retirement Healthcare Planning 

Here are some benefits to retirement healthcare planning: 

Avoid Financial Hardship in Retirement 

Knowing you need to avoid financial distress and placing safeguards during retirement to prevent them from happening are two different things. Ensure you have adequate funds at the ready. Make certain your coverage is strong enough to battle any escalating healthcare expenses. Healthcare planning in retirement is the time to do this. 

Get The Care You Need When You Need It 

You’re addressing a need for tomorrow before it potentially happens. Set up those essential healthcare services to receive the necessary treatment and support when you most need it during retirement. 

Secure Your Healthcare Needs 

When you secure a healthcare plan that prioritizes your well-being by guaranteeing access to care without financial concerns, it’s a big deal. Find some peace of mind, knowing that, if the time comes, you’ll receive the necessary treatments and services required without undue financial turmoil. 

A retirement healthcare plan guarantees a steady income stream tailored to cover healthcare expenses, averting financial shortfalls and ensuring you can maintain your well-being without monetary concerns. 

Protect Your Assets 

Retirement healthcare planning safeguards your assets. You’re allocating resources for healthcare costs and shielding your savings from potential depletion during retirement. Better to plan for the unexpected now, than put yourself in a bad financial situation if health issues arise later in life. 

Maximize Your Retirement 

Allocate your funds efficiently for healthcare costs. Prevent excessive expenditures. Allow for savings growth and security. Putting an emphasis on your retirement healthcare planning goes a long way to maximizing your retirement. 

Plus, you can retire on your terms, as your retirement plan ensures financial readiness to cover healthcare expenses, granting flexibility in choosing when to end your professional work. 

Retirement Health Care Planning Steps 

But where to start? Follow these simple steps to set you on the right path. 

Determine Your Health Care Needs 

Assessing your healthcare needs is pivotal in effective retirement planning. Start by evaluating your health, anticipated medical requirements, and financial constraints. Consider existing conditions and potential health issues, along with the associated costs. Balancing your budget with healthcare expenses ensures a tailored strategy, promoting financial stability and comprehensive healthcare coverage during retirement. 

Choose The Right Health Insurance Plan 

Selecting the appropriate health insurance plan is paramount in retirement health care planning. The market offers diverse options, each with varying coverage and costs. Evaluating your specific healthcare requirements, anticipated medical expenses, and preferred providers is crucial. Consider factors like premiums, deductibles, and out-of-pocket limits to align the plan with your needs for comprehensive coverage and cost-effectiveness. 

Plan For Long-term Care 

Incorporating long-term care planning into your retirement healthcare strategy is essential due to the potential high costs. Assess your options, including long-term care insurance, Medicaid, or private payment arrangements. Tailor your plan to align with your financial situation and preferences, ensuring you're prepared to manage future long-term care needs without depleting your retirement savings. 

Get Help If You Need It 

Seeking assistance is prudent if retirement healthcare planning proves challenging. Hire the services of a financial advisor for guidance on budgeting and investment strategies. Seek out a social worker to help navigate government programs and community resources. Medicare counselors specialize in healthcare coverage options. Leveraging these experts ensures a well-informed approach to retirement healthcare planning, addressing potential pitfalls and optimizing your financial security and healthcare coverage during retirement. 

Begin Your Retirement Healthcare Planning Today  

Retirement healthcare planning is integral to comprehensive retirement preparation. Devoting time to strategize for your healthcare needs helps prevent financial stress and ensures timely access to necessary care, enhancing your overall retirement experience. Secure your future today!  

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Spending Navigating the Holiday Spree: A Guide to Avoid Overspending

The holiday season should be a time of joy and celebration, but for many it includes added financial stress. The pressure to find the perfect gift, coupled with enticing holiday deals and effective marketing campaigns, could lead to overspending. 

But don’t worry! With some planning and an overall understanding of potential pitfalls, you can enjoy the holidays without damaging your bank account. 

Set a Realistic Budget 

Before you walk into a store or start late-night browsing on Amazon, take a moment to determine your holiday spending limit. Consider your current financial situation. Map out any upcoming expenses. Don’t forget about any savings goals you might have. Ask yourself what you can afford to spend. Don’t let the hype of the holidays tempt you to spend beyond your means. 

Make a List and Stick to It 

The pull of impulse purchases is real, especially during this time of year. To avoid falling prey to these temptations, create a list of everyone you’d like to buy a gift for, and set a reasonable budget for each. Stick to that list, no matter how perfect those expensive gifts may seem. 

Thoughtful Gifts over Price Tags 

The holidays shouldn’t be about purchasing the most expensive gifts. Try to focus on showing love and appreciation for those you care about. Consider personalized gifts that reflect your loved one’s interests or hobbies. Homemade gifts, such as baked goods, crafts, or heartfelt letters, can be just as meaningful, if not more so, than pricey store-bought items. 

Involve Family and Friends in Budgeting 

If you're part of a family or group of friends, there’s nothing wrong with discussing gift-giving expectations and setting a collective budget. Consider doing a Secret Santa exchange or setting a spending limit for each person. This could help prevent overspending and ensures everyone will feel included and appreciated. 

Avoid Shopping When Emotionally Vulnerable 

Stress, excitement, and fatigue are all factors that can cloud your judgment. They make you more susceptible to impulse purchases. Make dure to take breaks, stay hydrated, and prioritize your well-being during the holiday season. Shopping is an activity that requires proper planning and preparation. 

Embrace the True Spirit of the Holidays 

During the hustle and bustle of the holiday season, remember the true meaning of the holidays is about spending time with your loved ones. Focus on the simple joys of the season rather than getting caught up in the materialistic aspect of gift-giving. 

The holidays are a time for celebration. By following these tips and prioritizing your financial well-being, you’ll be able to enjoy the holiday season without overspending and feeling stressed about your finances. Happy holidays! 

  CRN202609-5468491

Financial Planning: Helping You See the Big Picture

Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the financial goals that may be important to you, and each comes with a price tag attached. 

That's where financial planning comes in. Financial planning is a process that can help you target your goals by evaluating your whole financial picture, then outlining strategies that are tailored to your individual needs and available resources. 

Why is financial planning important? 

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a financial plan in place, you'll be better able to focus on your goals and understand what it will take to reach them. 

One of the main benefits of having a financial plan is that it can help you balance competing financial priorities. A financial plan will clearly show you how your financial goals are related--for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use the information you've gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll know that your financial life is headed in the right direction. 

The financial planning process 

Creating and implementing a comprehensive financial plan generally involves working with financial professionals to: 

• Develop a clear picture of your current financial situation by reviewing your income, assets, and liabilities, and evaluating your insurance coverage, your investment portfolio, your tax exposure, and your estate plan 

• Establish and prioritize financial goals and time frames for achieving these goals 

• Implement strategies that address your current financial weaknesses and build on your financial strengths 

• Choose specific products and services that are tailored to help meet your financial objectives* 

• Monitor your plan, making adjustments as your goals, time frames, or circumstances change 

Some members of the team 

The financial planning process can involve a number of professionals. 

Financial planners typically play a central role in the process, focusing on your overall financial plan, and often coordinating the activities of other professionals who have expertise in specific areas. 

Accountants or tax attorneys provide advice on federal and state tax issues. 

Estate planning attorneys help you plan your estate and give advice on transferring and managing your assets before and after your death. 

Insurance professionals evaluate insurance needs and recommend appropriate products and strategies. 

Investment advisors provide advice about investment options and asset allocation, and can help you plan a strategy to manage your investment portfolio. 

The most important member of the team, however, is you. Your needs and objectives drive the team, and once you've carefully considered any recommendations, all decisions lie in your hands. 

Why can't I do it myself? 

You can, if you have enough time and knowledge, but developing a comprehensive financial plan may require expertise in several areas. A financial professional can give you objective information and help you weigh your alternatives, saving you time and ensuring that all angles of your financial picture are covered. 

Staying on track 

The financial planning process doesn't end once your initial plan has been created. Your plan should generally be reviewed at least once a year to make sure that it's up-to-date. It's also possible that you'll need to modify your plan due to changes in your personal circumstances or the economy. Here are some of the events that might trigger a review of your financial plan: 

• Your goals or time horizons change 

• You experience a life-changing event such as marriage, the birth of a child, health problems, or a job loss 

• You have a specific or immediate financial planning need (e.g., drafting a will, managing a distribution from a retirement account, paying long-term care expenses) 

• Your income or expenses substantially increase or decrease 

• Your portfolio hasn't performed as expected 

• You're affected by changes to the economy or tax laws 

Common questions about financial planning 

What if I'm too busy? 

Don't wait until you're in the midst of a financial crisis before beginning the planning process. The sooner you start, the more options you may have. 

Is the financial planning process complicated? 

Each financial plan is tailored to the needs of the individual, so how complicated the process will be depends on your individual circumstances. But no matter what type of help you need, a financial professional will work hard to make the process as easy as possible, and will gladly answer all of your questions. 

What if my spouse and I disagree? 

A financial professional is trained to listen to your concerns, identify any underlying issues, and help you find common ground. 

Can I still control my own finances? 

Financial professionals make recommendations, not decisions. You retain control over your finances. Recommendations will be based on your needs, values, goals, and time frames. You decide which recommendations to follow, then work with a financial professional to implement them. 

*There is no assurance that working with a financial professional will improve investment results. 

Common financial goals 

• Saving and investing for retirement 

• Saving and investing for college 

• Establishing an emergency fund 

• Providing for your family in the event of your death 

• Minimizing income or estate taxes 

   CRN202609-5468491