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Tag: Financial Planning

Need Life Insurance in Retirement?

Why do you get life insurance? It may be because you understand that tragedy can strike in a moment. Or perhaps you may want to make sure your family is taken care of after you’re gone. Does one need life insurance in retirement?

Life insurance helps provide you and your family with peace of mind for your future needs.

Insurance payouts may cover mortgage, car payments, and other ongoing debts so that your family can sustain a comfortable standard of living.

Here are six reasons to consider for buying life insurance:[i]

  1. To pay funeral and burial costs
  2. To cover children’s ongoing expenses
  3. To replace lost income
  4. To pay off debts
  5. To buy a business partner’s share
  6. To pay taxes

Reexamining your insurance needs.

Is there a time in your life when you no longer need life insurance? For example, your children are grown, your debts are paid, you’re retired, your savings are adequate, and retirement income levels are sustainable.

How do you determine your life insurance needs at different stages in life?[ii]

If you’ve achieved your retirement goals and built robust savings, you may not need life insurance coverage, or you may want to reduce it. However, before you make changes, review your finances closely to see what options are best for you.

Examine pension and other retirement funds to make sure proper survivor designations are in place and sufficient benefits will be available. A minor income reduction, for example, can significantly hamper a survivor’s lifestyle and ability to keep pace with ongoing expenses.

You may need life insurance to cover peripheral financial expenses, such as estate taxes, retirement distribution fees, or charities. Owners of larger farms or businesses may need additional coverage to pay unanticipated taxes or other fees to avoid losing the properties.

Long-term care later in retirement may cost thousands of dollars per month. Life insurance may help offset or cover potential medical expenses or maintain care insurance payments.[iii]

You have several options that are worth exploring that may help you streamline your insurance needs.[ii]

If you would like to discuss your current financial needs or review your current policy, we’re happy to talk. Please contact us at 800.929.1001.

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information.  This material has been prepared for planning purposes only and is not intended as specific tax or legal advice.  Tax and legal laws are often complex and frequently change.  Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.moneycrashers.com/reasons-buy-life-insurance/

[ii] https://www.usatoday.com/story/money/columnist/powell/2018/05/02/how-determine-if-need-life-insurance-retirement/563375002/

[iii] https://longtermcare.acl.gov/costs-how-to-pay/costs-of-care.html

IRS Provides Tax Credits to Help with College Expenses

Tuition at a private 4-year college can cost $35,000. Tack on another $12,000 for room and board and the annual bill can reach $50,000.

The IRS provides two tax benefits to taxpayers who are paying for higher education in 2018 for themselves, their spouses, or dependents. The American opportunity credit and the lifetime learning credit may help lower their tax load.

Use Form 8863 (https://www.irs.gov/forms-pubs/about-form-8863).

The American opportunity credit is worth up to $2,500 per eligible student, applies only for the first four years of college, and is available for students pursuing degrees.

The lifetime learning credit is worth up to a maximum of $2,000 per tax return per year for all students. It is available for all years of postsecondary education.

Taxpayers must get Form 1098-T from an eligible educational institution.

Other details may apply, and you can find more information on the IRS website.

This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.

Tip adapted from IRS.gov[I]

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information.  This material has been prepared for planning purposes only and is not intended as specific tax or legal advice.  Tax and legal laws are often complex and frequently change.  Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third-party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third-party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third-party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://www.irs.gov/newsroom/tax-credits-help-offset-higher-education-costs

Managing Your Finances After a Job Layoff

 

Layoffs are often stressful for everyone involved: company officials, the workers who retain their jobs, and especially the newly unemployed.

The experience for workers, however, can be particularly devastating. The emotional effects of a layoff may include anxiety, shock, irritability, anger, frustration, sadness, fear, loss of enjoyment or appreciation, feelings of worthlessness, loss of self-esteem, and shame.[i]

Physical reactions may include fatigue, headaches, weight loss or gain, sleep problems, upset stomach, muscle pain, or nausea.

Others, on the other hand, may feel a sense of liberty if they found their job onerous or unproductive.

Layoffs also often alter the attitudes or behaviors of remaining workers.[ii] While those who retain their employment may view their job situations with optimism over the possibility of new career opportunities, others seem to hold a dimmer and sometimes gloomier opinion of their long-term financial security. With altered work environments, employees who keep their jobs may feel a shift in the workplace atmosphere.

Looking Ahead

If you’ve been recently laid off from your job, you need to take certain steps to ensure both your financial and emotional health remains intact.

Here are six steps to consider:[iii]

  1. How much are you spending not just on regular budgeted expenses like mortgage and car payments, but on everyday items? Examine your grocery bill, your utility and insurance payments, and the other smaller expenses.
  2. Postpone the big expenditures. You may want to wait to buy a new car or that big-screen TV. Look into consolidating credit card debt into a single, low interest rate loan.
  3. Talk about your severance package. Many new workers discuss severance packages at the start of employment. It’s still not too late to broach the subject with your former employer.
  4. Use the available programs. The government and community organizations provide assistance for people who have lost their jobs. Take advantage of whatever services are available, especially unemployment compensation and career development services.
  5. If during your search you can’t find your dream job or even full-time employment, take part-time work in the interim. The job will allow you to generate income as you continue looking.
  6. One of the most important habits to develop during this time in your life is proper money management. Getting your finances and your budget in order is important as you look for work and for the future. Proper financial planning will equip and prepare you to maintain a steady course through life.

If you would like to discuss your current financial needs, we’re happy to talk. Please contact us (800) 929.1001 or contact us through our website.

Investment advisory services are offered through CapSouth Partners, Inc., dba CapSouth Wealth Management, an independent registered Investment Advisory firm. Information provided by sources deemed to be reliable. CapSouth does not guarantee the accuracy or completeness of the information.  This material has been prepared for planning purposes only and is not intended as specific tax or legal advice.  Tax and legal laws are often complex and frequently change.  Please consult your tax or legal advisor to discuss your specific situation before making any decisions that may have tax or legal consequences.

This article contains external links to third party content (content hosted on sites unaffiliated with CapSouth Partners). The policies and procedures governing these third party sites may differ from those effective on the CapSouth company website, as outlined in these Disclaimers. As such, CapSouth makes no representations whatsoever regarding any third party content/sites that may be accessible directly or indirectly from the CapSouth website. Linking to these third party sites in no way implies an endorsement or affiliation of any kind between CapSouth and any third party, including legal authorization to use any trademark, trade name, logo, or copyrighted materials belonging to either entity.

[i] https://cardinalatwork.stanford.edu/faculty-staff-help-center/resources/work-related/coping-emotional-impact-layoff

[ii] https://www.thebalancecareers.com/how-employees-respond-to-change-after-layoffs-1918585

[iii] https://www.monster.com/career-advice/article/manage-your-finances-when-unemployed

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