Let's Think "Outside the Box" Ways to Save

Tip #2

Get Out of Debt.

It's time to stop borrowing, pay off debt and regain control of where your money goes. Without car, student loan, credit card and installment loan payments that likely total $800-$2,000 per month, it would be easy to save for purchases and a secure retirement.

Start now. It won't happen overnight, but you can be debt-free and financially secure - regardless of your current income and debt levels.

If you have adequate equity in your home, you may want to consider refinancing your mortgage and using the equity to eliminate the other debt. The interest rate is likely much lower, and mortgage interest is tax deductible. If this is not a viable option for you, the following debt elimination strategy is effective. First, save $500-1,000 in an emergency fund so you have a small safety-net during the debt-elimination process. Second, tackle debt using the "snowball" approach, as follows: 

 

  • List all debts in ascending order, from smallest balance to largest. (You may also order them by highest to lowest interest rate, if you prefer.)
  • Commit to pay the minimum payment due on every debt.
  • Determine how much extra can be applied towards the smallest debt. (The more you can commit, the faster you will be out of debt.)
  • Pay the minimum payment on the smallest debt, plus the extra amount, until it is paid off.
  • Once a smallest debt is paid in full, add the amount you were paying on the first debt to the minimum of the second smallest debt, plus any extra you can afford.
  • Repeat until all debts are paid in full.

By the time the final debts are reached, the extra amount paid toward the larger debts will grow quickly, similar to a snowball rolling downhill gathering more snow. 

What are the Elements of a Healthy Financial Plan?

One of the most important things you can do for yourself and your family is to develop and stick to a financial plan. In doing so, it is strongly recommended that you consult an experienced financial planner who can help you understand your current situation, identify your goals, and put strategies in place to reach those goals. Regardless of your individual goals-whether to live a comfortable retirement, educate your children, travel the world, live a debt-free life, or leave your loved ones a significant inheritance-the foundation of any healthy financial plan must encompass strategies for building wealth and strategies for protecting your wealth.

 

Strategies to Save and Build Wealth

There are two distinctive types of savings to which a healthy financial plan gives consideration.

Cash Reserve - Establish a cash reserve for larger purchases, vacations and emergency situations, e.g., job loss, car/house repairs, etc. Your cash reserve is the money by which you live. A fully-funded cash reserve-approximately three month's salary-gives you the ability to handle unforeseen expenses and plan for the things you want to buy and do, without threatening your monthly expenses or investments. A financial planner can help you establish a cash management plan to maximize your discretionary income (after bills), prepare for emergencies, and save for the things you want.

Investment Portfolio - The second type of savings plan is an investment portfolio-the money by which you grow. An investment portfolio is absolutely essential to your meeting your long-term financial security goals. There are many factors that should be considered when establishing an investment portfolio, including how much you will need to retire, how much you expect your pension and/or Social Security to contribute, how many years until your retirement, and so on. With this information, your financial planner will help you make the right kind of investments.

 

Strategies to Protect Savings and Investments

A new transmission for your car or having to replace a leaky roof will probably not put you into financial ruin, especially if you have a fully-funded cash reserve. However, disability and death have the potential to wipe out your entire savings and retirement income very quickly. In addition to the standard insurances that most people carry, e.g., health, auto, homeowners, etc., the following types of insurances are critical to a healthy financial plan.

Life Insurance - Life insurance protects those who depend on your income - your spouse, children, etc. Upon your death, your life insurance policy will pay your beneficiary a lump sum that can replace your lost income, pay off outstanding expenses (house, car), cover funeral expenses and/or provide an education for your children. The various types of life insurances will be explored in a future article.

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Disability Insurance - Disability insurance is often one of the most overlooked forms of insurance, but is extremely beneficial when needed. Disability insurance replaces a portion of your lost income if you become unable to perform your job because of injury or illness. Many companies offer disability insurance as an employee benefit, but typically it only covers 60 percent of base salary, minus taxes. Discuss whether you may need additional coverage with your financial planner.

Long Term Care Insurance - Seven in 10 people will need some type of long term care. There are two ways to pay for long term care - either out of your own pocket or with long term care insurance. Neither personal health insurance nor Medicare will cover many long term care expenses, as many of the needed services (bathing, dressing, and eating) are not medically necessary in nature. Medicaid is the government program that covers long term care expenses, but as the payer of last resort, you will not be eligible for Medicaid until you have nearly depleted all of your income and savings.

Let's Think "Outside the Box" Ways to Save

Tip #1

Change Your Tax Withholdings.

Are you giving the federal government an interest-free loan every year? If you get an annual refund from the IRS, the answer is yes. Your employer deducts federal income taxes from each of your paychecks based on the number of “allowances” you claim on your W-4* (the form you filled out when you were hired). Many people claim zero allowances—having the maximum amount of taxes taken—and then file their return with exemptions and other deductions to receive a tax refund. Essentially, they are overpaying their income taxes. Why not pay an amount closer to your actual taxes and increase your weekly discretionary income and have more to save and invest?

People love getting a tax refund. Who wouldn’t love having $1,000, $2,500 or even $5,000 deposited into their checking account each spring? Many even argue that their tax refund IS their savings account. They use their annual refund for larger purchases, vacation, to pay off holiday debt, etc.

But here’s the brutal truth: It’s not smart savings and if you are not in a position to handle an unforeseen circumstance, you don’t need to be going on a vacation or buying a big screen TV. Above and to the right is an actual example of how one person began investing over $6,000 per year without feeling a strain on her day-to-day living or monthly budget.

By simply changing the allowances on her W-4 from zero to two, she was able to start investing 10% of her income ($166.67 bi-monthly), but her take-home pay only decreased by $45. Plus, her company—like many companies—matches her contribution up to five percent. Hence, her actual annual investment is $6,000.

*This example is intended as an illustration only and does not reflect the performance of any specific investment and should not be considered financial advice.

How can life insurance help pay for college?

 

*The information being provided is strictly as a courtesy. When you link to any of the web sites provided herewith, you are leaving this site. We make no representations as to the completeness or accuracy of the information provided on these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site. By clicking on the link above you will leave our web site and assume total responsibility and risk for your use of the site you are linking to. The information provided on these sites is not intended to provide specific advice and should not be construed as a recommendation for any individual. Before making any investment decisions you should consult with a financial, tax and/or legal professional. Products advertised may or may not be approved for purchase through NPC. Please note any and all guarantees made are contingent upon the claims paying ability of the insurance company.

Three Key Ingredients to Building a Satisfying Financial Solution

Now, more than ever before, there is incredible turbulence and chaos in the economy.

But, there is hope, and it comes in the form of a solution far too many Americans ignore...

 

 

*The information being provided is strictly as a courtesy. When you link to any of the web sites provided herewith, you are leaving this site. We make no representations as to the completeness or accuracy of the information provided on these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site. By clicking on the link above you will leave our web site and assume total responsibility and risk for your use of the site you are linking to. The information provided on these sites is not intended to provide specific advice and should not be construed as a recommendation for any individual. Before making any investment decisions you should consult with a financial, tax and/or legal professional. Products advertised may or may not be approved for purchase through NPC. Please note any and all guarantees made are contingent upon the claims paying ability of the insurance company.

Estate Planning with Life Insurance

How to plan an estate using Life Insurance

Having a will in place will only get you so far

 

*The information being provided is strictly as a courtesy. When you link to any of the web sites provided herewith, you are leaving this site. We make no representations as to the completeness or accuracy of the information provided on these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site. By clicking on the link above you will leave our web site and assume total responsibility and risk for your use of the site you are linking to. The information provided on these sites is not intended to provide specific advice and should not be construed as a recommendation for any individual. Before making any investment decisions you should consult with a financial, tax and/or legal professional. Products advertised may or may not be approved for purchase through NPC. Please note any and all guarantees made are contingent upon the claims paying ability of the insurance company.

Annuity Maximization

Get the most out of your Annuity. Life Insurance can help.

 

*The information being provided is strictly as a courtesy. When you link to any of the web sites provided herewith, you are leaving this site. We make no representations as to the completeness or accuracy of the information provided on these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site. By clicking on the link above you will leave our web site and assume total responsibility and risk for your use of the site you are linking to. The information provided on these sites is not intended to provide specific advice and should not be construed as a recommendation for any individual. Before making any investment decisions you should consult with a financial, tax and/or legal professional. Products advertised may or may not be approved for purchase through NPC. Please note any and all guarantees made are contingent upon the claims paying ability of the insurance company.

Using Life Insurance to Maximize Your Pension Benefits

When you think of life insurance you often think of something that you ‘should’ have and you may not have fully taken part of this level of peace of mind.  Life insurance can help you as you approach retirement and prepare your estate; it will allow you to maximize your defined benefit qualified pension plan.  While some employers are moving away from using pensions, many people who are approaching retirement age may still be contributing to a pension plan.

This method of using life insurance while coupled with a pension plan is known as pension maximization. This strategy of maximizing a pension payout is specifically for those who are married. Pension maximization allows the holder of the pension plan to maximize pension payouts while gaining the death benefit protection for their spouse.

Steps for taking advantage of Pension Maximization

  1.  Read the parameters of the pension plan and discover what it includes.  Does it include health insurance or other similar benefits?
  2.  Are you healthy enough to take out a life insurance policy?
  3.  Make the decision that you will use the “Life Only Benefit” payout option.
  4.  Take out a life insurance policy to supplement the “Life Only Benefit” payout before the time of retirement.
  5.  List your spouse as beneficiary of the life insurance plan.

Pension Maximization strategy will allow the holder of the pension plan control, protection, and peace of mind that their spouse will be secure after their passing.  Upon the passing of the plan holder the spouse will receive death benefit from the life insurance policy, which is generally income tax-free but will not receive any more funds from the pension plan.  

 

 

*Products or strategies advertised may or may not be approved for purchase through NPC. Please note any and all guarantees made are contingent upon the claims paying ability of the insurance company.

 

 

Maximizing Your Pension

When you’re approaching retirement age, you not only worry about replacing your income but also ensuring that your spouse is taken care of should you pass.  For those people who have a traditional pension plan, also known as a defined benefit plan, they have a difficult decision to make as they approach retirement.  Should an individual receive the maximum payout of the pension plan known as a “Life Only Benefit” or should you receive a joint pension payout known as a” Joint and Survivor Benefit”, so that the payments will continue beyond the passing of the primary person?

While it is important to understand what type of provisions your pension plan has, it is also important to determine your family’s budget needs at the time of retirement.  If you believe that you may need a higher income and you are in good health then you may want to make the most of your pension plan while you are living.

One way people maximize their pension payout is to accept the single-life pension payout or “Life Only Benefit”, generally this would give the owner a larger pension amount every month while foregoing the payout to their spouse after their death.  If the primary owner chooses the “Life Only Benefit”, they should obtain a life insurance policy naming their spouse as the beneficiary.  Their spouse would receive the death benefit from the life insurance policy, tax-free, essentially replacing the pension payments that will stop at the time of the primary owner’s death.  Their spouse can then invest the lump sum of money to provide income for later years.

Prior to making any pension decision, the primary owner should determine if; they can qualify for a life insurance policy and that the life insurance policy it is an appropriate amount to cover expenses as well as invest.

Questions to ask yourself prior to taking part in pension maximization:

  •  Do you need a larger monthly payout amount at the time of retirement?
  •  Is your retirement health insurance coupled with your pension?  If so, will health insurance carry over to your spouse once you pass?
  •  Are you healthy enough to take out a life insurance plan on your own?
  •  What is your tax bracket?  Pension payouts are considered fully taxable.
  •  Will your spouse be financial stable when you pass?
  •  How long is your spouse projected to live past you?
  •  How much life insurance would your spouse need to ensure that your spouse is taken care for the rest of their life?

Benefits of selecting the pension maximization strategy are:

  •  Should your spouse predecease you then your heirs will receive the remaining life insurance benefits upon your death.  With a pension, often heirs will not receive any funding upon your death.
  •  You have financial control of how much benefit your spouse will receive upon your death by selecting the appropriate amount of death benefit from the life insurance plan.
  •  If you select the “Life Only Benefit”, you have the potential of accessing any accumulated cash values of the pension plan, such as accepting the funds as a lump sum.

 

Sources:

http://www.investopedia.com/ask/answers/09/what-is-pension-maximization.asp

http://www.investopedia.com/articles/personal-finance/071813/pros-and-cons-pension-maximization.asp

https://www.northamericancompany.com/documents/434862/5721980/NAM-1687.pdf/ccc01325-f262-44da-b40c-908817c0d894

 

 

 

Using Life Insurance for Pension Maximization (Video)

Do you want to maximize your pension benefit, but still provide for your spouse?

Click Here to learn more about Pension Maximization using Life Insurance

 

 

 

*The information being provided is strictly as a courtesy. When you link to any of the web sites provided herewith, you are leaving this site. We make no representations as to the completeness or accuracy of the information provided on these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technology, sites, information and programs made available through this site. By clicking on the link above you will leave our web site and assume total responsibility and risk for your use of the site you are linking to. The information provided on these sites is not intended to provide specific advice and should not be construed as a recommendation for any individual. Before making any investment decisions you should consult with a financial, tax and/or legal professional. Products advertised may or may not be approved for purchase through NPC. Please note any and all guarantees made are contingent upon the claims paying ability of the insurance company.

New Budget Law Means Changes to Your Social Security and Medicare Benefits

Social security is economic security for retired, disabled people or families of retired, disabled or diseased workers. Many people today are engulfed with promotions and invitation of benefits and security system seminars on how to maximize their social security income. On November 2nd, 2015 the president signed into law the, Bipartisan Budget Act of 2015 which has put an end to loopholes used in the past while filing forbenefits and made significant changes to the benefits system. Now what has changed according to new budget act?

The biggest change for claiming Social Security benefits is that the “File and Suspend” strategy has been abolished. Previously, married couples could maximize their Social Security benefits by having one spouse file for retirement benefits, then suspending the benefits shortly after filing. Typically, the person who is suspending the benefits is the individual who has had a higher earnings record. This strategy allowed married couples to file spousal benefits and receive higher benefits based on the lower income of the spouse.

Under the Bipartisan Budget Act, when a person files for suspension of benefits, not only does the individual not receive any benefits during the suspension period but, his or her spouse also does not receive any spousal benefits. Any current retirement benefits claims will not be affected, however the Bipartisan Budget Act will apply towards new file and suspend benefit claims.

Another benefit strategy that has been eliminated is using the process of restricted applications. This strategy is mainly used to increase the overall longevity of one’s Social Security benefits. When an individual reaches full retirement age and is eligible for both the spousal benefits and his or her own benefits, they can file a restricted application to only receive the spousal benefits. By doing so, they delay receiving their own retirement benefits in order to earn the delayed retirement credits. These delayed credits increase Social Security benefits by 8% a year.

Under the rules of the Bipartisan Budget Act; when you file for Social Security benefits, you are simultaneously filing for both your spousal benefits and your individual benefits. For those people who turn 62 after 2015, they will have two options for claiming their Social Security benefits; either they can start claiming benefits anytime at or after turning 62 and receive a lower total amount of benefits. Or they can delay receiving benefits until they are older, as late as 70, in order to maximize their benefit amount, but not receive any benefits until that time.

An additional benefit of the Bipartisan Budget Act is that it sets the premium rates for people who receive Medicare Part B coverage and there will not be an increase for most people in 2016. People who have their Medicare premiums deducted out of their Social Security benefits will not see an increase in rates for 2016. This is roughly 70% of Americans who are covered with Medicare Part B. However, the other 30% of people will see their premium rates rise from $104.90 to approximately $119 per month. This is due to the fact that there was no cost-ofliving increase, the premium increase is considered a relief for those people who fall
under the 30% category; otherwise they would have had to incur the full load of the Medicare increase, which would have been higher than 50%.

 


Sources
USA Today -
http://www.usatoday.com/story/money/columnist/powell/2015/11/12/socialsecurity-
medicare-changes-budget-law-retirement/75164246/

Loveland, Ohio magazine
http://lovelandmagazine.com/2015/11/the-bipartisan-budget-act-of-2015/

FedSmith
http://www.fedsmith.com/2015/11/02/bipartisan-budget-act-of-2015-signedinto-
law/

NBC News
http://www.nbcnews.com/politics/congress/house-passes-sweeping-two-yearbipartisan-
budget-deal-n453226

Long Term Care Insurance

Plan for you future, today

Why Long Term Care Insurance?

  • Allows you to stay at home for home care, instead of being forced into a nursing facility.
  • Keeps retirement assets to be used as they were intended, your retirement.
  • Removes the burden placed on your Family and Friends
    • Presently, the cost for long-term care in NJ may exceed more than $65,000 a year.
    • The current average length of stay in a long term care facility is 2½ years.

Benefits include: home care, assisted living, nursing homes, adult day care or Hospice

  • Financial protection against the cost of care
  • Extensive coordination of care
  • Coverage when recovery is longer than 90 days or ambiguous
  • Pays for out of pocket expenses for each day the insured is confined in a care facility

* Nationwide, Medicare only pays approximately 5% of all LTC expenses.

Coverage becomes active based on the inability to perform Activities of Daily Living
If you are unable to do two or more of these six activities, your long term care insurance will
assist you financially: Eating, dressing, bathing, continence, toileting and transferring.

Help protect your assets, your loved ones, and your independence.
*http://www.state.nj.us/dobi/ins_ombudsman/ltcguide.htm

November is Long Term Care Awareness Month

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We will spend the rest of November posting LTC (Long Term Care) information, answers to these common LTC questions and much more!

 What does long term care mean and how can it effect you and your family?

 What is LTC? What does LTC include? What Does LTC Cost? What are options to pay for LTC? What is the likelihood you will need LTC? Does Medicare cover LTC costs?


  Keep an eye on our social media pages and our website for more information

 Visit our website: beaconfinancialgroup.net

Contact: MichelleJacoby@beaconfinancialgroup.net to assist in learning and planning for LTC needs.

 

Resources We Recommend:

longtermcare.gov

http://www.state.nj.us/dobi/ins_ombudsman/ltcguide.htm

Long Term Care Facts

Did you know that significant advances in medical technology and healthcare means that people are living longer than ever before?

 

The government predicts that 70 percent of people over 65 will need long-term care for some period, so it’s likely it could happen to you.

 

Please visit longtermcare.gov and beaconfinancialgroup.net and contact MichelleJacoby@beaconfinancialgroup.net to assist in learning and planning for LTC needs.

 

What Does LTC (Long Term Care) Include?

  • Assistance with activities of daily living (ADL's) such as eating, bathing, dressing, toileting, transferring, continence.

  • Around-the-clock skilled nursing care for those with prolonged physical illness, disability, or cognitive disorders, such as Alzheimer's.

  • Custodial care in an Assisted Living Facility.

  • Homemaker care, Adult Day care, Hospice care, Respite care.

  • Personal care for basic instrumental activities of daily living (IADL's), such as cooking, cleaning, laundry, or bill paying.

 

Please visit: http://www.state.nj.us/dobi/ins_ombudsman/ltcguide.htm and http://www.beaconfinancialgroup.net/

and contact MichelleJacoby@beaconfinancialgroup.net to assist in learning and planning for LTC needs.

 

How Can You Pay for LTC (Long Term Care)?

 

 

  • LTC Insurance

  • Life Insurance with LTC Benefits

  • Annuities

  • Self Funding

 

As our population grows, new financial products are offering yet more options.

 

Please visit: http://www.state.nj.us/dobi/ins_ombudsman/ltcguide.htm and http://www.beaconfinancialgroup.net/

and contact MichelleJacoby@beaconfinancialgroup.net to assist in learning and planning for LTC needs.

What role will families play in future caregiving?

 

We would like to share this article with you. Please read this and share with your family members:

http://www.wiscnews.com/news/opinion/mailbag/article_2d1a429e-c3cf-5930-85f7-5099870c4f38.html

 

November is Long Term Care Awareness Month – and the timing couldn't be better.
Throughout the holiday season, families gather to celebrate. This family-focused time also presents an ideal opportunity for families to share their plans for an extended-care event.


Also visit beaconfinancialgroup.net and contact MichelleJacoby@beaconfinancialgroup.net to assist in learning and planning for LTC needs

What is the likelihood you will need LTC?

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What is the likelihood you will need LTC? That someone you love will need LTC? and What will it cost?

One national study, which projected nursing home use, suggested that,  among people who live to age 65, one in four would spend at least one year or more in a nursing home or other type of long-term care facility.

Presently, the cost for long-term care in New Jersey may exceed more than $65,000 a year. The current average length of stay in a long-term care facility is 2½ years.

Please visit http://www.state.nj.us/dobi/ins_ombudsman/ltcguide.htm and beaconfinancialgroup.net and contact MichelleJacoby@beaconfinancialgroup.net to assist in learning and planning for LTC needs.

 

Won't the government pay for Long-Term Care services?

The Federal government will not pay for LTC services directly unless certain criteria are met under two different federal health programs: Medicare and Medicaid.

  • Medicare will pay for limited LTC services, but only under strict circumstances.
  • Medicaid will pay for full long-term care, but individuals will essentially be required to redeem their assets and spend down most of their cash prior to becoming eligible for Medicaid.

 

Please visit http://www.state.nj.us/dobi/ins_ombudsman/ltcguide.htm and beaconfinancialgroup.net and contact MichelleJacoby@beaconfinancialgroup.net to assist in learning and planning for LTC needs.