Tips to Help you Protect (and increase) Your Retirement Income

July 28, 2015


When planning financially for retirement at any age, it must be considered, “How can I guarantee that my hard-earned, retirement assets will be there for me if an event occurs that causes a cash emergency or crisis?”  We can’t see everything on the horizon that is potentially a financial threat, but we can be prepared.

Are you prepared?  Most of us have insurance for automobiles, homes, boats, even jewelry; as well as health coverage for ourselves and our families.  We have policies for cancer, disability, long-term care, teeth, vision and on and on.

But many overlook the value of insuring their retirement, and most don’t really realize what a valuable role LIFE INSURANCE plays across ALL stages of an individual’s life.


Life Insurance is truly at the center of any sound financial plan for retirement.  If you don’t have a retirement plan, then there is no better time than the present.  Life insurance is the basic, tried-and-true financial solution to avert life’s risks because it provides security for your loved ones, and the ability to build up cash value.  In retirement, it can be used a tax-free source of income while you are alive.

How much life insurance does one need?  A simple formula is to carry a life insurance policy with a death benefit equal to the amount of your retirement assets.  Another approach is to determine how much income you would like to receive from the policy at some point in the future, and then design your plan around these goals.

Is there really a more important financial consideration than your retirement assets?  Isn’t the desire to retire the ultimate reason we work?  Yes, we work to put bread on the table and clothes on our backs, but also so that someday we will eventually be able to stop working.

If the protection of your retirement assets is at the top of your list of priorities, then a life insurance policy may be worth a look.  Contact L & A Services for custom retirement solutions that will give you peace of mind.


Getting Bit by Taxes?

March 26, 2015


Now is the time!  Don’t let the IRS bite you again for not making contributions into your tax-qualified IRA.  Reduce your tax liability and save for your own retirement by putting up to $5500 ($6500 if 50 years and older) into an individual retirement annuity offered by L & A Services, Inc.

This limit does not include rollovers from old retirement accounts, such as 401(k) plans, into your own personal retirement account.  Stop paying fees and start enjoying guarantees!

You only have until April 15th to make your 2014 contributions, so do not delay or you will miss out on this tax deduction.

Contact our office at 602-996-6010 if you would like to put more of your hard earned money in your own pocket, and less in the pocket of Uncle Sam.

How NOT to Outlive Your Money in Retirement

January 30, 2013

Everyone has his or her own idea of what retirement looks like.  This is typically a vision of an ideal scenario.  Sadly, many fail to plan for the unexpected events and costs that can have a lasting impact on the retirement we imagined.

Furthermore, many underestimate the costs associated with retirement, especially those we have not control over:  Taxes, inflation, home & car repairs, and [especially] medical care, to name a few.  What if I end up living to age 110?  What is the cost of living going to be at that time, and do I have enough to guarantee I can afford to live that long?

There is good news…if you are not 110 years old, you still have time to plan for it.  Dr. Shelby Smith recently wrote an article that describes it best, and what you can do to protect yourself.  I have included the article below for your enjoyment.  I hope this will open up discussions about YOUR plans for the future, and if this is important to you, please call me for assistance.

Benjamin Rosky, RHU

January 2013

The greatest fear of most retirees is the risk of longevity: outliving their money. The meltdown of retirement accounts, rising medical costs, uncertain entitlement programs and higher taxes have added to the risk. Facing 30 years of retirement living on past savings and Social Security benefits is a scary reality. What can be done?

To handle other unaffordable risks you buy insurance. The same companies that protect your home, life, health and auto can also protect you from the risk of longevity. The basic principle of all insurance that makes coverage affordable is “pooling of risks”. Since the greatest fear of retirement is outliving your money and your remaining life span is uncertain, the solution is to insure the unaffordable risk. Let’s see how this is done.

Insurance companies issue fixed annuities, which can be turned into guaranteed lifetime incomes. You can accumulate your retirement money in an annuity over time, or you can fund the annuity lump-sum. Fixed annuities are backed by the assets of the insurance company, guaranteed to give you a positive rate of return which is free of income taxes until the earnings are withdrawn, and offer you numerous other choices. At the date you select, you can turn your annuity into a lifetime of monthly checks you cannot outlive. The insurance company guarantees you a lifetime of income, regardless of how long you live. You can later change your mind, stop the income and take your money lump-sum. If you die prematurely, your heirs are paid the balance of your account.

Let’s look at a hypothetical example that most insurance companies offer. Let’s say you are age 57, have $350,000 in an IRA account and plan to retire at 65. Parenthetically, you can put money in an annuity at any age and can start immediately to take an income. You’ll get the following by moving your IRA money to an annuity: (1) a 10% premium bonus that boosts your income account to $385,000; (2) a guaranteed growth in your income account of at least 8% annually; (3) the right to start a monthly income at any time after 591/2; (4) an annual lifetime income equal to 5.5% times your income account value at age 65; (5) the right to withdraw your money lump-sum if you change your mind; (6) no taxes on the annuity earnings until you start withdrawals; (7) no fees or commissions except 0.40% annual premium taken from earnings for the lifetime income guarantee. At age 65 and retirement what can you expect?

At age 65 the income account will be at least $712,608 since you were guaranteed at least 8% annual growth on your initial annuity premium plus the 10% bonus. Your annual guaranteed lifetime income will be $39,193 (5.5% of your $712,608 income account balance). If you should die prematurely, your account balance, if any, will go to your beneficiaries. If you change your mind, have an emergency, find a better value or whatever you can take your remaining money lump-sum. There are no medical requirements or other hassles. You are now insured against the risk of longevity and cannot outlive your money.

Insurance companies charge for their services and make a profit; thus, retirees that die too soon will subsidize those that live too long. The same as those whose homes were not damaged subsidizes those whose homes were damaged. Your retirement objective of a guaranteed lifetime of income was insured at a reasonable cost by pooling your longevity risk with that of other retirees. Combine your guaranteed lifetime income with Social Security benefits, and you have a comfortable and safe retirement with very little planning. Ask your financial advisor today about a fixed annuity with a Guaranteed Lifetime Income Benefit Rider.

Shelby J. Smith, Ph.D.
January 2013

Financial Checklist for New Parents

January 13, 2012

New Baby Financial Checklist

Baby’s coming, so it’s time to get your finances in order.  Here are a few things that will save you time and money for your family’s future:
  1. Health Insurance for baby – If Dad or Mom have health insurance when baby is born, rest assured your baby will be automatically covered for the first 31 days of life under either parent’s plan.  However, it is important to contact your insurance company ASAP to find out what they require…sometimes it’s automatic, but other times you must send in a new enrollment form (such was the case with my family insurance).
  2. Lower health insurance costs – ask your agent or broker to check into individual health insurance costs for dad and baby, especially if it’s your first child.  This can often lead to lower premiums than a group plan.
  3. Savings – During an airplane emergency, we are taught to take the oxygen for adults first, and then assist our children.  The same applies to your savings…make sure you do what you need to do for yourself first – reduce expenses, pay off debt, fund your IRA.  This will establish a solid foundation so you are better equipped to help your child.
  4. Life insurance – no one likes this subject, but who is going to pay for your child’s care if mom or dad die prematurely?  Plan on adding 20 more years of insurance now.   It’s the best gift you can give your family.
  5. Disability insurance – equally scary is the possibility mom or dad lose their ability to earn a living, because of an unexpected accident or illness that keeps them out of work for a period of time.  Ask your agent to review your income replacement plan for anyone working to put food on the family table.

These are the top 5 financial considerations among young parents, from my experience.  If you have questions or need help with any of these areas, our office  is here to assist you.

Getting Ready to Retire Checklist

November 21, 2011

Getting Ready to Retire Checklist

Determine if you are on track for your retirement goals
• Evaluate your expenses, both essential (those things you must have) and discretionary (those things you can do without).
• List all sources of predictable income, including Social Security and pensions.

Consider ways to boost your savings
• Contribute as much as you can to your 401(k) or IRA.
• If you are age 50 or older, take advantage of catch-up contributions.
• Work longer or consider part-time work in your early retirement years.
• Think about delaying Social Security payments.
• Evaluate your anticipated lifestyle and trim some expenses.

Understand key Social Security factors
• It could make up a substantial portion of your guaranteed income; when you start collecting impacts your total benefitt amount.
• Know the four key factors that could affect your payments (see reverse).

Evaluate your portfolio and create a plan
• Consider what your retirement risk tolerance is: conservative or aggressive?
• Consolidating old 401(k)s into an IRA can make it easier to manage your overall financial picture.
• Create a detailed retirement income plan.

Research health care options
• Health care expenses in retirement can be unexpected and higher than planned.
• Consider options such as long-term care insurance and supplemental health care options.
• Understand the Medicare application process, including timelines and premiums, which can be impacted by your age and Social Security.

Protect your retirement plans
• Have an emergency fund you can access for unexpected events or costs during retirement.
• Pay off high-interest debt to reduce your expenses as you enter into retirement.
• Regularly conduct a portfolio review.
• Ensure you have updated your beneficiary information, will, and estate plan.


Material Courtesy of Fidelity