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10 Signs That Your Retirement Fund is Not Adequate

January 10, 2022

The last thing anyone wants is to run out of money in retirement. But that can indeed happen, and does sometimes happen, to retirees who didn’t plan adequately. If any of these ten signs sound familiar, you might want to review your retirement savings strategy before you set a target retirement date.


You haven’t considered the impact of inflation. Did you know that at the current rate of inflation, your spending power could be reduced by more than half within 20 years? What sounds like a lot of money now might not stretch as far as you expect in the future. 


You haven’t considered your life expectancy. Did you know that one in four 65-year-old people today will live until age 90? Could that be you? And can you afford a retirement that lasts that long? 


You don’t have a plan for long-term nursing care. Long-term nursing care costs thousands per month, and Medicare actually does not pay for it (except for very limited stays). One illness or injury could quickly deplete your retirement savings. 


You’ve underestimated the cost of healthcare in retirement. Similarly, Medicare also does not pay for 100 percent of regular healthcare costs. Most would-be retirees are surprised to learn that healthcare costs about $250,000, on average, over the course of retirement. 


You don’t know how income taxes will impact you. Are you surprised to learn that your retirement income might be taxed? If that news came as a shock, you should reexamine your anticipated budget. 


You’re divorced or considering a divorce. If you’ve already divorced, then you might already know that your retirement fund took a hit. But if you’re considering a divorce in the years before retirement, you might consider marriage counseling instead. A divorce can result in your retirement fund being divided in half. 


You haven’t considered your future spending habits. Have you realistically estimated your budget for travel, hobbies, and entertainment? You might be tempted to spend more on these items than you think. 


You would have difficulty affording a large, unexpected expense. And what about the cost of a major car or home repair? How would you fit that into your budget?


You frequently overspend on children and grandchildren. Sometimes loving our families a bit too much can get us into financial trouble. Make sure you’ve considered the cost of gifts, college, or helping during emergencies. 


You don’t have a retirement plan withdrawal strategy. How much money are you planning to withdraw from your retirement fund each year? And how long will your money last with that plan? If you can’t answer these questions satisfactorily, it’s time to schedule an appointment with us. Let’s talk about your withdrawal strategy so that you know what to expect from your savings. 

Using Life Insurance to Protect Your Business: Key Strategies for Business Owners

February 11, 2025
As a business owner, safeguarding your enterprise against unforeseen events is crucial for long-term success. Life insurance offers several strategies to protect your business, ensure continuity, and provide financial stability during challenging times. Two primary methods are buy-sell agreements and key person insurance. Buy-Sell Agreements A buy-sell agreement is a legally binding contract that outlines the procedure for transferring ownership if an owner departs due to death, disability, or retirement. Funding this agreement with life insurance ensures a smooth transition and financial security for the remaining owners and the departing owner's beneficiaries. Types of Buy-Sell Agreements Cross-Purchase Agreement: Each owner purchases a life insurance policy on the other owners. Upon an owner's death, the surviving owners use the policy proceeds to buy the deceased owner's share. This method is often suitable for businesses with a few owners. Entity Purchase Agreement: The business itself owns life insurance policies on each owner. If an owner passes away, the business uses the proceeds to buy back the deceased owner's share, redistributing it among the remaining owners. This approach is typically preferred for businesses with multiple owners. Key Person Insurance Key person insurance is a policy that a business takes out on essential employees whose loss could significantly impact operations. The business owns the policy, pays the premiums, and is the beneficiary. If a key person dies or becomes disabled, the policy proceeds can be used to: Cover the costs of finding and training a replacement. Offset lost revenue resulting from the key person's absence. Reassure clients, creditors, and investors of the business's stability. This strategy is vital for businesses where certain individuals are integral to success, such as top executives, lead developers, or primary sales personnel. Additional Strategies Beyond buy-sell agreements and key person insurance, consider these life insurance strategies: Collateral Assignment: Use a life insurance policy as collateral for business loans. In the event of the owner's death, the lender is paid from the policy proceeds, preventing financial strain on the business. Executive Bonus Plans: Provide key employees with life insurance policies as part of their compensation package. This not only offers them personal financial protection but also serves as an incentive for retention. Deferred Compensation Plans: Promise to pay key employees a certain amount at retirement, funded through life insurance policies. This ensures the business can meet its obligations without affecting cash flow. Implementing life insurance strategies is essential for business owners aiming to protect their enterprises from unforeseen events. Work with us to explore your life insurance options and we can help your business remain resilient and continue to thrive.

What Happens If You Outlive Your Term Life Insurance?

February 1, 2025
Term life insurance provides coverage for a specified period, such as 10, 20, or 30 years. If you outlive your term policy, the coverage ends, and no death benefit is paid to your beneficiaries. As you approach the end of your term, it's essential to evaluate your current financial situation and consider options to maintain life insurance coverage if needed. Options to Consider Annual Renewable Term: Some term policies offer an option to renew annually after the initial term expires. While this allows you to extend coverage without a medical exam, premiums typically increase each year based on your age, making it a potentially costly option over time. PROGRESSIVE.COM Policy Conversion: Term-to-Permanent Conversion: Many term policies include a conversion feature, allowing you to convert your term policy into a permanent life insurance policy, such as whole or universal life, without undergoing a medical examination. This option can provide lifelong coverage and build cash value, but premiums will be higher than those of the original term policy. NEWYORKLIFE.COM Purchasing a New Policy New Term Policy: Applying for a new term life insurance policy can be an option, especially if you're still in good health. However, premiums will be higher due to increased age, and you may need to undergo a medical exam. Permanent Life Insurance: Alternatively, you might consider purchasing a permanent life insurance policy, which provides lifelong coverage and accumulates cash value. This option is generally more expensive but offers additional benefits. Exploring Alternative Coverage: Final Expense Insurance: Designed to cover end-of-life expenses, such as funeral costs and medical bills, final expense insurance offers a smaller death benefit with more affordable premiums and may not require a medical exam. Guaranteed Universal Life Insurance: This type of policy provides coverage for a specified age (e.g., up to age 90 or 100) with lower premiums compared to whole life insurance, focusing primarily on the death benefit without significant cash value accumulation. Take Action Now As your term life insurance policy nears its expiration, assess your current financial needs and health status to determine the most suitable course of action. Consulting with an insurance professional can help you navigate your options and select the best solution to ensure continued financial protection for your loved ones.
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