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How Some People Manage to Retire Early

June 13, 2023

We often blog about the challenges faced by many soon-to-be retirees, including delayed retirements or a lack of retirement funds. But on the other hand, there are people who not only managed to retire comfortably; they also did it early! How did they manage to do that?


Yes, an unlucky few have been forced to retire early, due to job market conditions, illness, or disability. But many early retirees actually planned it that way and pulled it off. What did they do differently from the rest of us?


Early planning is key. For most early retirees, their success lies in early and thorough planning. They knew early on in their careers, often in their twenties, that they wanted to retire in their forties or fifties. And so, they began saving early. Their plans included an optimistic growth strategy, and they made plans for healthcare because they knew Medicare eligibility would be a long way off at age 65. 


Realistic expectations create attainable retirement budgets. Most early retirees established retirement savings goals based on a modest retirement lifestyle. They usually aren’t taking six vacations per year or driving luxury cars. This allows them to live on a more modest budget. 


Budgeting during working years is equally important. To attain the level of retirement savings needed, early retirees lived on a budget during their working years. Rather than “keeping up with the Joneses” they dedicated a significant portion of their earnings to saving and investing. 


Living on a budget during working years also helps with retirement, because the transition to a fixed income doesn’t come as a shock. Responsible savings and living habits are already well established. 


A diversified income boosts savings. Obviously, earning more helps you save more. Early retirees often established more than one stream of income during their working years. 


Tax strategy is essential. A significant portion of earnings can be swept away by income taxes. But at the same time, a smart tax strategy can actually put money back into your pocket. 


Consistency keeps plans on track. Those who manage to retire early make a plan and stick to it, even during times of unsettling market fluctuations. They don’t panic, and they check in with their retirement professionals often to make necessary adjustments. 


We can help with that last part. If you haven’t yet created a retirement income plan, or if you haven’t received a “checkup” lately, give us a call. We can help you review your plans and update your strategy to match your goals. 

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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