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Eased Inflation Brings Some Relief, But Retirement Can Still Bring Surprises

October 1, 2024

Recent improvements in the economy, including easing inflation, have provided some relief for working individuals. However, many still face challenges in reaching their goals. A recent survey from Goldman Sachs reveals that while conditions are better, many workers still struggle with the unexpected expenses and challenges that come with both day-to-day living and preparing for retirement.


The Reality of the "Financial Vortex"

Goldman Sachs research refers to the "financial vortex" as a combination of personal and economic pressures that make it difficult for individuals to maintain confidence. This vortex can be triggered by rising living costs, debt, or unexpected life events, and it often throws people off course—whether it’s covering basic needs or trying to save for the future.


The Unexpected in Retirement

Even with the best planning, retirement can bring surprises. Many factors, such as high monthly expenses, unexpected medical bills, and caregiving responsibilities, can disrupt even the most carefully laid plans. From unforeseen home repairs to health emergencies, retirees face many challenges that can eat into savings and make it difficult to stay financially secure.


Key challenges include:


  • High Living Costs: Even in retirement, the cost of everyday essentials like housing, groceries, and healthcare can rise.
  • Unplanned Expenses: Unexpected events, such as a medical emergency or a major car repair, can quickly drain savings.
  • Supporting Family: Many retirees also find themselves supporting aging parents or children, which adds another layer of responsibility.


Insurance: A Key to Preparing for the Unexpected

One of the best ways to prepare for unexpected costs in retirement is to ensure you have the right insurance coverage. A solid insurance plan can help you manage everything from rising medical costs to potential long-term care needs. With the right insurance options in place, you can protect your savings and ensure that unforeseen events won’t derail your retirement lifestyle.


Some key insurance options to consider:


  • Health Insurance: Medicare may not cover all healthcare costs. Supplemental insurance can help fill the gaps and cover out-of-pocket expenses like copays, deductibles, and prescriptions.
  • Long-Term Care Insurance: As healthcare needs increase with age, long-term care insurance can help cover the costs of assisted living, nursing homes, or in-home care.
  • Life Insurance: Some life insurance policies offer cash-value components that can be used in retirement if needed or provide support for loved ones after you’re gone.


Take Action Now to Protect Your Retirement

While you can’t control everything that happens in retirement, you can take steps now to protect yourself from surprises. Contact us today to discuss options that will help you prepare for the unexpected. With the right coverage, we can help you enter retirement with more confidence, knowing that you have a plan in place for whatever life throws your way.

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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