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Answer These 5 Questions Before Claiming Social Security

December 6, 2021

It’s normal to feel antsy about retiring. But before you take the leap into the next phase of your life, make sure you’ve asked - and answered - these five important questions. 


What is my full retirement age? Your “full retirement age”, as defined by the Social Security Administration, is the age at which you can claim your full scheduled benefits. It falls between 66 and 67 years old, depending upon the year of your birth. Of course, you can claim benefits earlier, but your monthly checks will be reduced. 


How would an earlier claim affect my benefit amount? You don’t have to wait until your full retirement age to claim your benefits, if you’re willing to accept a smaller monthly check. But don’t just guess at the amount. Benefits can be reduced by as much as 30 percent, and many retirees can’t afford to miss out on that much income. 


How would a later claim affect my benefits? On the other hand, waiting longer to file your claim can net you a larger monthly check. After you’ve reached your full retirement age, future benefits grow by 8 percent for each year that you wait to file your claim. However, that stops at age 70, so make sure to file your claim then. 


How will income from work affect my benefits? If you claim your benefits before reaching full retirement age, those checks can be reduced depending upon your income from work. For every two dollars you earn above a certain threshold, your Social Security checks will be reduced by one dollar. In the year that you’re set to reach full retirement age, checks will be reduced by one dollar for every three dollars you earn above the threshold.


 In 2022, that threshold is set at $19,560.


How will my spouse be affected if I claim my benefits? If your spouse will claim spousal benefits based upon your work history, delaying your claim means they won’t get their benefits yet either. Or, if you claim benefits earlier, their potential survivor’s benefit will be smaller than it otherwise might have been. 


As you can see, there’s a lot to consider before filing your claim for Social Security benefits. Work closely with us in the years leading up to retirement, and we can help you determine the right time to get your checks started. 

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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