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Will You Earn More Than the Average Social Security Benefit?

November 13, 2021

We regularly remind our readers that Social Security was intended to serve as a supplement to retirement income, and that you shouldn’t expect to rely on your checks to cover your entire budget in retirement. But that doesn’t mean you shouldn’t try to maximize those benefits as much as possible! Social Security can definitely serve as one important part of your overall financial plan. 


In fact, 37 percent of men and 42 percent of women depend upon Social Security for at least half of their retirement income. So you might be wondering what the average Social Security benefit is, and whether you can expect to receive that much or maybe more. 


Social Security does regularly increase checks a bit, in response to inflation, but the average expected benefit for 2022 will be $1,657 per month. But will your benefit fall in the average range, or perhaps be more generous? There are three ways to influence your final benefit amount, and you can begin to evaluate those factors now. 


Have you worked at least 35 years or longer? The benefits calculator uses your 35 highest-earning years to determine your final benefit amount. Those who worked more than 35 years might have some higher-earning years to average into the formula. On the other hand, those who worked fewer than 35 years will have some zeros averaged into their work history. The results can determine whether you receive an average-sized check, or one that is significantly smaller or larger than average. 


You earn an above-average salary. The median US salary is just over $52,000 per year, and earnings are taxed for Social Security purposes up to a limit of $147,000 annually. So if you’re earning in the upper end of that range, and continue to be a high earner for many years, you will probably end up with a benefits check that is larger than average. 


You’re going to delay your claim. Your benefit amount will be determined by when you file your claim. Full retirement age is 66 or 67, depending upon when you were born. But if you delay your claim for a few more years, your benefit will grow larger (up until age 70, at which point there is no benefit to waiting). 


If you’re really curious about your potential Social Security benefit, call us to schedule an appointment. We can help you estimate your potential future benefit amount, and help you plan for other forms of income to go along with it. 

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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