Investment Vehicles
How important is saving for retirement
Saving for retirement is crucial for ensuring financial stability and independence during one’s post-work years. With advances in medicine and healthcare, people are living longer than ever before, and the cost of living continues to rise. Therefore, it is essential to have a reliable source of income to meet one’s daily needs, cover medical expenses, and enjoy a comfortable retirement.
Furthermore, social security benefits, which were intended to provide financial support for retirees, are not always sufficient to cover all expenses. By saving for retirement, individuals can supplement their social security income, ensure that they can maintain their desired lifestyle, and protect themselves from financial insecurity or poverty in their later years.
In summary, saving for retirement is a necessary practice that helps individuals to secure their financial future and maintain independence during their post-work years. With careful planning and consistent saving habits, people can enjoy their golden years without worrying about financial stress or instability.
Diversify your portfolio
Understanding the difference between qualified, non-qualified, and tax-free money is important when planning for retirement.
Qualified money refers to funds that have been contributed to tax-advantaged retirement accounts, such as 401Ks, IRAs, or 403(b) TSA. These contributions are made pre-tax, meaning they are deducted from an individual's taxable income in the year they are made. The earnings on qualified money grow tax-free until withdrawal, at which point they are taxed as ordinary income. It is important to note that early withdrawals from qualified accounts may result in penalties.
Non-qualified money refers to funds that have been invested outside of tax-advantaged retirement accounts. These funds may come from sources such as after-tax income. Money can be accessed at any time without penalty or required minimum distributions.
Tax-free money refers to funds that are not subject to federal income tax, such as those held in Life Insurance Policies (IUL) and Roth IRAs. Contributions to IUL Policy or Roth IRAs are made with after-tax dollars, and the earnings on these contributions grow tax-free with access to the money at any time without penalty.
Power of Life Insurance 100% Tax-Free
Life insurance is a powerful tool that provides financial protection for loved ones in the event of an unexpected death. It offers a lump sum payment to beneficiaries, providing financial support to cover costs such as funeral expenses, outstanding debts, and living expenses.
Life insurance can also help to secure the financial future of the surviving family members, including children or a spouse. This may include covering costs such as education, healthcare, and day-to-day living expenses. Additionally, life insurance can be used to pay off a mortgage or other debts, providing peace of mind to loved ones during a difficult time.
Moreover, life insurance policies can also serve as an investment vehicle. Permanent life insurance policies such as whole life or universal life insurance can build up cash value over time, which can be accessed by the policyholder while they are still alive. This cash value can be used to supplement retirement income, pay for unforeseen expenses, or even as a source of collateral for a loan.
7 Secrets of annuity
Americans Have Invested Over 3 trillion Dollars into Annuities
1. Safety - Insurance companies are forced to set aside $1 for every $1 invested in annuities. Banks often fail because they take $1 and make $10 in loans that go bad. Annuities don't do this. A banker I used to work with had a huge penny on her desk. She used to tell bank customers that the penny was more than anyone ever lost in a fixed annuity.
2. Guaranteed income for life - Annuities can fill in the gaps when social security, pensions, and other retirement accounts don't provide enough retirement income. Annuities allow you to take a lump sum today and create a steady stream of income paid monthly, quarterly or yearly.
3. Reasonable returns - Traditional fixed annuities provide a safe alternative to bank CDs and savings accounts. Some uncapped index annuities have earned 7-17% in specific years. You earn a portion of the market upside without risking your principal. Some of the gains, none of the losses.
4. Tax-deferred growth - Annuities offer triple compounding on your interest. Earn interest on your principal, interest on your interest, and interest on the money normally lost to taxes.
5. Long-Term Care Benefits - Some annuities offer 200-300+% of your initial deposit in long-term care benefits with an optional rider. There is no cost, and everyone qualifies regardless of health.
6. Leave a Legacy - You can leave a loved one a monthly, quarterly, or annual check. This can be especially beneficial if you think they might not spend it wisely.
7. No fees - Many fixed, indexed, and income annuities have no fees whatsoever.
Bonus Reason - Some annuities offer upfront bonuses on deposits up to 10%. Example, invest $100,000 and receive a $10,000 bonus. Bonuses are usually attached to longer-term products, which may or may not be suitable for your situation.
Drop us a line below to request a free annuity comparison review.