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Tag: Retirement

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

Working in Retirement in an ‘Encore Career’

Experts labeled the birth of more than 76 million babies between 1946 and 1964 the “baby boom.”[i] It was America’s largest generation, although Millennials are on the verge of overtaking boomers.[ii] More than 65 million are still living today with about 10,000 retiring per day.[iii] The youngest will turn 67, full retirement age, in 2031, when the boomer population is projected to drop to 58.2 million.

What will they be doing?

Most of them will continue working.[iv] In fact, nearly four-fifths of retirees will stay on the job or seek other employment to supplement their retirement income.

More than 60% of people in the United States who have retired said they retired too soon.[v]

How do boomers compare to workers in other generations?[vi]

  • Boomers are hardworking, ambitious workaholics and occasionally tend to complain about younger workers’ seeming unwillingness to pay their dues.
  • Boomers are independent, confident, and self-reliant. As the original anti-establishmentarians, they believe they can change the world.
  • Boomers are usually dedicated, focused on achievement, and goal setting.
  • Boomers are highly competitive and correlate work with self worth.
  • Boomers self-actualize. Boomers were raised in relative middle-class affluence, eschewing traditional values for the sake of self expression.

The boomer’s view of retirement

Unlike members of previous generations, baby boomers have animated the word “encore.” Coined by author Marc Freedman, the term “encore career” describes a person’s second life career in later years.[vii]

Encore careers tend to focus primarily in health care, the environment, government, education, and nonprofits. Encore careers provide retirees with financial advantages, such as higher Social Security credits by delaying receiving benefits. Monthly benefits rise when eligible retirees delay applying for benefits after reaching their full retirement age.

Beyond the monetary advantages, boomers find encore careers provide an outlet to express the passion they’ve gained throughout their professional lives. Connected to a community, working retirees gain a sense of engagement and purpose in their later years.

Boomers also gravitate to a variety of mostly help-related professions, such as teaching, consulting or working for nonprofits. Others pursue work in creative fields, such as music, painting, or drama.

Looking for work?

If you’re interested in pursuing an encore career, here are some tips to help you get started:

  • Start by writing down your goals and interests and think about how you could turn them into satisfying work.
  • Take classes at your local college or lifelong learning center to develop new skills.
  • Think about how much you’d like to work and what kind of environment would interest you.
  • Consider taking a personality assessment and work competency test to learn about your strengths.
  • Look around for job opportunities and let friends, family, and others in your network know that you’re looking.

To learn more about retirement, please visit our website.

If you would like to discuss your current financial plans or retirement strategies, 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.prb.org/justhowmanybabyboomersarethere/

[ii] http://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-baby-boomers/

[iii] https://www.cnbc.com/2017/10/03/health-care-dilemma-10000-boomers-retiring-each-day.html

[iv] https://www.youngresearch.com/researchandanalysis/compound-interest-researchandanalysis/how-many-retirees-will-keep-working/

[v] https://www.bloomberg.com/news/articles/2017-07-10/working-past-70-americans-can-t-seem-to-retire

[vi] https://www.thebalancecareers.com/baby-boomers-2164681

[vii] https://www.investopedia.com/terms/e/encore-career.asp

Tips for Building and Protecting Your Retirement Income

Tips for Building and Protecting Your Retirement Income

The creative team for real estate developers came up with the term “the golden years” in 1959 as part of a pitch to sell homes in the nation’s first large-scale retirement community. Developers of the $2 million golf resort in the middle of an Arizona desert were hoping to sell the idea of “an active new way of life” for people approaching retirement.[i] Their idea worked.

The “golden years” refers to the years of retirement, normally after age 65. Making the golden years truly golden involves having relatively good health, adequate income, and a meaningful life.

While good health and living meaningfully depend on lifestyle choices and sometimes heredity, maintaining or generating adequate retirement income requires prudence and well-laid financial plans.

Risk Management and Growth Strategies for Your Retirement Income

Here are six ways for managing your money in retirement:[ii]

  1. Cut investment expenses and fees. You can potentially increase your income by reducing your outgo. If you have income from mutual funds, look for hidden fees. You may have fees for fund management, transactions, and loads. Get with your financial advisor to examine the lowest-cost options for your investment funds.
  2. Take a look at how your investments are taxed. You may want to consider moving your investments with the highest possible tax liability to tax-deferred accounts and those investments with the lowest taxable liability to taxable accounts. Keep in mind that this may involve transactional fees. Investors should consult with their tax advisor regarding the tax consequences of investing.
  3. Catch-up contributions are one way to build your retirement fund quickly. Annual contributions to tax-deferred accounts are limited, but once you reach the age of 50, you’re allowed to add more into your retirement account. Once you’re 55, you can also make catch-up contributions to your health savings account.
  4. Although Social Security income is only supposed to be part of your retirement income, you can boost your benefits by waiting to apply. Full retirement age, when you’re eligible to receive 100% of your designated benefit, is currently 66 or 67. You get about an 8% increase per year by waiting until you’re 70. For healthy older workers, this is an excellent way to boost your annual Social Security benefit by up to 24%.
  5. Part-time work for retirees is becoming an increasingly attractive option to boosting retirement income. Part-time employment may also improve your quality of life in retirement.[iii]
  6. Paying off your debt before you retire helps to bolster retirement income. Unfortunately, it’s becoming more commonplace for workers to enter retirement with mortgage or credit card debt. If you aren’t retired, you should consider making debt elimination a priority.

If you would like to talk more about your options, please give us a call at 800.929.1001.

Financial & Estate Planning

[i] http://rowleylegal.com/2014/08/03/the-term-golden-years-was-coined-in-1959-as-an-advertising-pitch-for-sun-city/

[ii] https://www.cnbc.com/2018/06/12/4-easy-ways-to-increase-your-retirement-income.html

[iii] https://www.fool.com/retirement/2018/02/04/boost-your-retirement-income-with-these-6-tips.aspx

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