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Article by; Hazel Bridges
Crunching the Long-Term Care Numbers
At this point in your life, you might be the healthiest you’ve ever been, but aging comes with its own set of health obstacles. Seniors are at a higher risk of developing arthritis, respiratory illnesses, osteoporosis, and Alzheimer’s disease, as well as experiencing falls. As a result, one day you or your spouse may arrive at the point where assisted living or a nursing home is the best and safest option, but will you be able to afford it?
Unfortunately, you can’t predict the future, so it is best to plan ahead now, no matter how fantastic you feel. Statistics provided by The Wall Street Journal say that as many as 70 percent of Americans age 65 and older will need some form of long-term care. Furthermore, once you reach age 65, you have a 40 percent chance of entering a nursing home. With these statistics in mind, here are a few ways you can fund your assisted living stay should the need arise.
Leverage Your Life Insurance
Typically, a life insurance policy is a safety net for a spouse and children should your untimely demise leave them in a tough spot financially. However, now that the children are grown and independent, you might consider leveraging your life insurance policy to pay for assisted living. While this will decrease the amount your heirs will receive, it will certainly help pay for long-term care expenses. To do so, you must purchase a long-term care rider, which allows you to use a portion of the death benefit. Be sure to shop around for riders, and read all the rules and conditions as some allow you to tap into a greater portion of the death benefit than others. Additional options include switching to a lump-sum combination policy (life insurance/long-term care insurance combo) or selling your life insurance policy altogether.
Consider a Reverse Mortgage
You’ve likely heard of a reverse mortgage, but at the time, you didn’t give it a second thought. Now that you are planning for long-term care, it’s an option that deserves some thought. A reverse mortgage is a loan taken against your home’s equity, with payments made to you as a solitary lump sum, monthly payments, or a line of credit. This option is best for married seniors where only one spouse (not both) needs assisted living since the loan becomes due when the last borrower moves or passes away. However, before you jump right in, it is best to weigh the pros and cons since every situation is unique and can have implications for your estate and loved ones. While a reverse mortgage can be a tad bit confusing, the law requires that you meet with a mortgage counselor to ensure you are making the right decision.
Purchase Long-Term Care Insurance
For many seniors, long-term care insurance is a safety net and a backup, especially when you consider the fact that Medicare will only cover a short or limited stay in an assisted living facility. While you might think to wait to buy it when you need it, the cost will be less if purchased when you are young and healthy. Prior to purchasing, do some research on what the plan covers in regards to assisted living or nursing home care. Some have certain requirements, such as 24/7 care or a particular number of beds. Speak with a financial advisor as well to ensure you are in a good place financially to pay the premiums and reap the future benefits.
Take Advantage of Your Veteran Status
What many veterans and their spouses don’t realize is that they can utilize the veterans Aid and Attendance (A&A) pension to help pay for the costs of assisted living. Many families don’t think about using it if the veteran remains independent but the spouse is ill. The pension comes in a monthly benefit ranging from about $1,800 to $2,900 depending on if the monies will be used for a veteran, spouse, sick spouse, surviving spouse, or two married veterans.
No one knows the future, but you can plan for it. Age brings the likelihood of needing long-term care, but this comes at a price. Know your options now so that you can get the care you need.
Ask Tony about:
Qualified vs. Non-Qualified Plans Under the TCJA
The Tax Cuts and Jobs Act of 2017 (TCJA) will bring substantial changes to all areas of federal taxation, including the new qualified business income deduction rule contained in the new IRC section 199A. As a result, qualified and non-qualified retirement and pensions will be impacted.
As you may know, the IRS designates certain retirement and pensions plans as “qualified” and “non-qualified.” In the past, qualified pensions and retirement funds have been the more popular vehicle for savings over non-qualified plans in America.
Popular qualified plans may include:
- SEP Plans
- Defined Benefit Plans
A retirement or pension plan is considered “qualified” if it meets the federal standards promulgated by the Employee Retirement Income Security (ERISA).
Non-qualified plans, on the other hand, do not meet the ERISA requirements. For this reason, non-qualified funds offer more flexibility for employers but also limit the tax benefits. However, under the TCJA, there are new methods in which business owners and employers may further mitigate their tax burden using a non-qualified plan.
These strategies may include:
- Deferred Compensation Plans
- Split Dollar
- Premier Bonus Plans
These opportunities have become available because, under the TCJA, business owners may be taxed at a lower rate:
Contact us to speak with our non-qualified benefit specialist and find out more
Anthony J Sandroni EA, LUTCF
Sandroni Tax & Financial Services
Here is a link to an article that explains Indexed Universal Life (IUL) aka Indexed Universal Fund (IUF) in a concise manner. Contact us today for more information.
27 Oct Use Indexed Universal Life in a College Fund
As tuition prices continue to rise, families must plan to put away more money for their children’s and grandchildren’s future education needs. According to the College Board’s “Trends in College Pricing, 2015,”1 the 2013-2014 average total costs (including tuition, fees, room and board) was $18,391 for in-state students attending four-year public colleges and universities and $31,701 for out-of-state students. Students who attended four-year private colleges and universities incurred average costs of $40,917. Additionally, the cost to attend college increases at an average of around 5% to 8% per year.
These costs have created an unfavorable outlook for students looking to apply for college. Seventy-five percent of students get in to their first choice college, according to the Cooperative Institutional Research Program’s (CIRP) publication “American National Norms, Fall 2013.”2 Unfortunately, more and more students are not attending their first choice school in large part because of cost. In 2013, 57% of students chose not to attend their first choice school, according to CIRP. Among those students, 62% said they could not afford to attend it. Another survey, conducted by the Huffington Post in 20133, found that 62 percent of respondents believe most people are not able to afford the cost of a public college education.
Life insurance is an essential piece of almost every family’s financial plan. It provides client’s peace of mind knowing that their families are protected in the event of an untimely death. But there are other methods by which families may utilize this product. The premiums paid toward an Indexed Universal Life insurance policy can serve two purposes. The same policy that protects loved ones may also build accumulation value that can be used for a variety of needs, including education funding. As tuition prices continue to rise, families must plan to put away more money for their children’s and grandchildren’s future education needs. Some fund this need using mutual funds, CDs, or 529 Education Savings Plans.
However, an IUL policy may be a viable dual-purpose alternative that:
- Provides Tax-Deferred Accumulation Value
- Protects money from risk Minimizes tax burden while building Accumulation Value
- Provides downside protection in bad economic conditions
- Allows control of the of the accumulation value and whether to take policy loans
- Is not a “countable asset” when child applies for college financial aid
- Allows access to tax-deferred accumulation value for education funding
- Guarantees a generally tax-free death benefit to ensure reaching education goals
Indexed Universal Life
As you may already know, an IUL policy is a type of permanent insurance. IUL policies mimic a specific stock index, such as the S&P 500, and provide returns based on market performance. Once the cash value has built up to a substantial level, the client can begin taking tax-free withdrawals/loans to supplement their education funding needs.
Those looking to purchase an IUL policy must note that only the premiums that are not used towards life insurance coverage are used to build tax-deferred cash value. And since an IUL is used for life insurance, as well as a cash accumulation tool, the owner’s age and overall health can have a huge impact on premium costs, which would ultimately hurt the accumulation. However, the added death benefit of the IUL, pays tax-free dollars to the designated beneficiaries should the owner die prematurely.
Although IULs can generate a considerable amount of cash value, this product must be well-funded by the owner making the maximum allowed premium payments. If the policy loans become too great, and the policy underperforms, the policy could ultimately lapse.
Allowing the policy to lapse can actually leave the policyholder with a large tax bill, so the owner should be advised that this is a long-term planning strategy with potentially significant penalties if the policy is surrendered or lapses. Ultimately, a person who wants to purchase this type of product should consider all their options and seek the advice of an independent financial or insurance professional to decide which method is right for their personal situation.
Photo Credit: Unsplash
ARTICLE BY: Sara Bailey
How to Create a Strong Financial Plan for You and Your Family
As a parent, you are constantly thinking about how to create the most secure environment for your children. That being said, it may seem like there just isn’t enough money to ensure long-term financial security. Day-to-day expenses might make it difficult to pay-off debts, save for a home, or create a college fund. Here’s the good news: By creating a financial plan, you can save money, pay debts, and set yourself and your family on the path of financial freedom. Keep reading to learn how to get started.
What are Your Goals?
Tangible, achievable goals are the cornerstone of a successful financial plan. If you want to achieve financial security, be sure to write down your goals and develop steps to achieve them. If you want to pay off your car, create a plan for how you can pay it off in the smallest amount of time. While you are thinking about your goals, consider why a certain goal is important to you. For example, “The interest rate on our car loan costs $61 per month. When the 48-month lease is up, the interest will have cost us $3,000.” As a parent, it might help to consider what else this money could be used for -- maybe your child has always wanted to join a swim team and that $61 could pay for the registration fee.
Know What You Owe
Did you know that approximately 37 percent of Americans underestimate their credit card debt? If you want to escape the debt trap, start by making a list of who you owe, how much, and what you are paying in interest. Consider what you owe in each consumer debt category -- car loans, unpaid bills, student loans, mortgages, outstanding medical expenses, credit card debt, etc. Knowing what you owe can help prioritize payments and reduce interest fees. Additionally, knowing exactly what your debts are can prevent you from developing a false sense of financial security.
Know What You Have
In addition to being honest about how much you owe, make sure you know how much you have. Calculating your assets will give you a clear picture of your total net worth including stocks, bonds, savings, and valuable material assets. While calculating your assets, be sure to spend time analyzing what your home is worth. If you are considering taking out a line of credit, refinancing your home, or negotiating property taxes, you will need to know what your home is worth. In addition, knowing what others would pay to purchase your home can help you make informed decisions about when to sell and how much to list for. There are numerous online resources to help you determine the true market value of your home, as well as online asset calculators to help determine your net worth.
Be Honest About Spending
According to the Center for Financial Services Innovation, approximately half of Americans spend their entire paycheck each month. Not only is overspending linked to financial insecurity, it is also linked to higher levels of anxiety and stress. Being honest about how much your family spends is an integral component of achieving financial freedom. Savvy spenders often use budgeting apps, keep and track receipts, monitor credit card statements, and use spreadsheets. No matter what method you use, make sure you are getting a complete picture of where your dollar is going. Knowing what you are spending will help you identify potential savings and create a budget.
If you want financial security for yourself and your children, start by creating a meaningful financial plan. Being honest about your debts, knowing your net worth, and monitoring spending can help you achieve your long-term goals while reducing stress and anxiety in the present. Creating and following a financial plan doesn’t require advanced financial literacy or a substantial time commitment -- just sit down, be honest, and create a plan that will put you on the path to financial freedom.
“Life insurance is a powerful tool that when used properly can improve and protect your financial situation.”
Tax Benefits of Life Insurance
The Need for Life Insurance
Life insurance products accounted for more than 20 percent of long-term savings in the U.S. during 2013, according to an article by the Milwaukee Journal Sentinel. Furthermore, on average life insurance companies paid out more than $1.5 billion every day and the life insurance industry directly supported around 2.5 million American jobs throughout 2013, according to the article.
Yet, based on a 2013 study by the Life Insurance and Market Research Association (LIMRA), up to thirty percent of U.S. households had no life insurance at all. Furthermore, only 44 percent of homeowners had individual life insurance, according to LIMRAs study.
Although the study shows there is a lack of insurance ownership within the U.S., it still suggests that a majority of consumers are aware of the importance of life insurance. Around 50 percent of U.S. households, roughly 58 million, identified as needing more life insurance, according to LIMRA’s study.
On the other hand, less than 40 percent of those surveyed in the 2013 LIMRA study indicated that using life insurance coverage for premature death and funeral costs and leaving an inheritance was their top financial priority.
Over the past decade the median cost of an adult funeral in the United States has increased approximately 35%, according to the nation Funeral Directors Association.
The nation median cost of a funeral was $7,045 in 2012.
Obviously the life insurance industry plays a massive role in both the U.S. economy as well as the lives of those who wish to build savings and financial protection for their loved ones.
Fortunately for policy owners, life insurance can generate a large sum of money that is payable to the owner’s heirs in the event of their death. An even greater advantage is the proceeds for the death benefit will be income-tax-free for the beneficiary.
Nonetheless, premiums paid towards a policy by an individual for insurance on the life of his or her spouse are considered nondeductible personal expenses of the individual.
Policy owners should be weary as to who is receiving their death benefit. Death benefits that are paid into the deceased’s estate are subject to estate tax, which runs between 35 and 55 percent. When death benefits go directly to a beneficiary who is not their spouse, such as a child or sibling, the money is included in the deceased’s taxable estate.
However, most relatively simple estates do not require the filing of an estate tax return unless “the combined gross assets and prior taxable gifts exceed $5,340,000,” according to the IRS.
To determine your current net estate, add your assets then subtract your debts. Insurance policies in which you have any “incidents of ownership” are included in your taxable estate.
One method in avoiding the taxation of a life insurance death benefit is to use a trust owned life insurance policy. Since you don’t personally own the insurance or have any incidents of ownership, it will not be included in your estate.
The trust then pays the premiums, and the death benefits go to whomever you name as the trust’s beneficiaries. With this arrangement, there’s no federal estate tax on the death benefits, and there’s no federal income tax either.
However, an irrevocable life insurance trust (ILIT) may not be the best policy depending on what the policy owner is looking to get from their policy. These types of policies do not have flexibility when it comes to changing the policy. Additionally, the beneficiaries must rely on a fiduciary to properly manage the policy.
Managing a life insurance policy may be a complex task that requires continual revision and upkeep. A fiduciary or trustee of a policy must hold themselves and their management policies to a certain standard in order to provide their client or principal with the best service.
Unfortunately, Data from a 2005 survey by The Journal of Financial Service Professionals indicated, “Approximately 74 to 79 percent of trust companies could obtain a larger death benefit for the same premium.”
Furthermore, up to almost 35 percent of trust companies “could obtain a greater death benefit while reducing the premium outlay from 55 to 82 percent,” according to the survey. An existing policy can be transferred into the irrevocable life insurance trust, but the IRS imposes a three-year waiting period before recognizing the transfer. Should the client die within the interim, the full death benefit would revert to the decedent’s taxable estate.
Nonetheless, using irrevocable trust assets to purchase permanent life insurance can provide greater amounts to heirs while minimizing both estate and income taxes.
Ultimately, a person who wants to buy a life insurance should consider all their options and seek the advice of an independent insurance professional to decide which method is right for their personal situation.
Contact us today for more information.
Call #2282076225 or
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ASK TONY about…. Indexed Universal Life (IUL)
College tuition costs continue to rise creating an unfavorable outlook for students who wish to attend. Most students do not get to go to their first choice college simply because of the tuition, book fees and room and board. Students even with a loan and certainly their parents, who wish to provide the education for their child to succeed, may not have planned for the actual cost of a four year education. There just isn’t enough money.
Life insurance should be the essential building piece of a family’s financial plan. It provides the peace of mind knowing that their family will be provided for and have the funds for final expenses of the deceased loved one. However, there are other methods in which families can utilize IUL insurance policies. The same policy that protects your loved ones can accumulate value. This value can be used for educational funding as well as other financial needs.
Indexed Universal Life
- Provides tax deferred accumulation value
- Allows for accumulation cap and the ability to get a loan against the value
- Allows for tax deferred accumulation value for educational purposes
- Generates a generally tax free death benefit that can help ensure educational goals etc.
Contact us today.
#ajstaxsolutions.com #tax and #financial #solutions #business #accounting #indexed #universal #life #benefits #tax #deductions #educational #funds and #planning #strategies #tonysandroni
Question: What's a great wealth and estate planning tool?
Answer: Single Premium Indexed Universal Life.
"If you have funds parked in low interest CDs or Bonds we have an alternative. For some time now I have shown folks how to move low, taxable, interest earning accounts to Single Premium Fixed Indexed Universal Life Contracts."
"The contracts have Fixed account options and S&P 500 Indexed account options available all in one contract. You make a one time deposit into a this account and start earning better returns, TAX DEFERRED. The account also provides a death benefit that is always higher than the money you have in the contract. It is even possible to take cash out TAX FREE. If you are tired of taxable low CD and Bond rates and looking for an alternative, give us a call for additional information and free consultation."
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“The Tax Cuts and Jobs Act (TCJA) of 2017 will bring substantial changes to all areas of federal taxation, including the new qualified business income deduction rule contained in the new Internal Revenue Code (IRC) section of the 199A. As a result qualified and non-qualified retirement and pensions will be impacted.”
SOURCE: Advisors Resource.com
Qualified Plans vs Non Qualified Plans
Qualified Plans (QP)
Qualified Pensions Plans have been the more popular vehicle for pensions and retirement funds. These strategies include: 401s(K) (Employer sponsored plan), 403s(B) (Tax Shelter Annuity), Simplified Employee Pension (SEP) and Defined Benefits Plan (DBP)
Non-Qualified Plans (NQP)
Some NQP do not meet the Employment Retirement Income Security Act (ERISA) Requirements but this allows for more flexibility for employers but may also limit the tax benefits. However, under TCJA there are new methods in which business owners may further mitigate their tax burdens by using a non-qualified plan.
These strategies may include: Deferred Compensation, Split Dollar and Premier Bonus Plans.
Contact us to find out what might work better for your business.
Go to the website
Call #2282076225 or
#ajstaxsolutions.com #tax and #financial #solutions #business #accounting #deduction #planning #tax #benefits #tax #deductions #retirement #funds and #planning #stategies #tonysandroni
I have been selling life insurance for 35 years and I feel this product is revolutionary in the industry.
The "Easy Term Product" we have available has so many coverage options, that it solves several important family protection needs bundled into one easy contract!
Check this out.
*10, 20 & 30 year level term life options for life insurance. (No Exams in most cases).
*"Real" Disability Income Protection Rider. Up to $1,500 per month for two years. (No Exams in most cases).
*Critical Illness Rider available up to 100% of the life insurance amount purchased.
*75% of your money back after the level term life period, (return of premium rider).
This plan can provide many important parts of a families overall protection at great price. If you are on a tight budget and need to protect your family against your death, disability and/or critical illness, coverage can be obtained with one simplified issue product. Please contact us for a quote.
Call #2282076225 or
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Call Tony About Whole Life Insurance Protection
Phone: 228-207-6225 Fax: 228-233-3233
Unlike car or home insurance that may be required by law or your mortgage company, life insurance is the only insurance required by love.
We know that life ends. But the love we have for our spouse, kids, and grandkids will never die. The best way to make sure that your love lives on is by purchasing a:
A permanent, whole life insurance policy.
Funeral and cemetery costs are on the rise.
Did you know that the average funeral now costs is $8,508?
- Use your policy to pay for long term continuous confinement costs in a nursing facility 3.
- Use your policy to enjoy your time with loved ones if diagnosed with a terminal illness3
- Enough money to your cover final expenses ... from $1,000 up to $50,000 in life insurance protection
- Plans available to fit almost every American, young and old (ages 0 - 85)1
- Only a few health questions to determine plan eligibility Competitive rates that never increase with protection that never decreases
- Peace of mind knowing most of our claims are paid within 24 hours.
Free insurance protection for your children and grandchildren ...up to$5,000 upon their death4
Additional fees for a traditional service such as cemetery, monument, flowers, & obituaries can increase this cost to $14,858²
...so, do you have it?
Plus, you may not realize that Social Security will only pay $255* toward your burial if you qualify.
¹2015 NFDA General Price List Survey.
*According to Social Security Rules and Regulations 404.390
Insurance policy issued from Settlers Life. For you. For them.
"Americo's HMS Plus Payment Protector is a Decreasing Term product that pays the death benefit in a
Lump Sum or
MONTHLY income payments."
This product is perfect for Mortgage Life Insurance Family Protection!
DO YOU NEED DENTAL AND OR VISION INSURANCE? CLICK THIS LINK & SIGN UP NOW!
Altrua Health Share Plan
So, If you are in good health and don't smoke this "Health Share" plan can cover you AND is "Obama Care" qualified! The monthly contribution is 1/3 the cost of "Obama Care" plans. The plan has high quality Coverage with in & out of network cost share.
These plans are "Faith Based" and similar to Co-op's in that they pool the healthy, non-smoker folks together and pay out "shares", (claims), when submitted. The plan has been in existence for over 20 years and has paid out all qualified "shares" as they arose, bar none. Maternity is included! Please call or email for more information. (Rates)
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SURVIVOR INCOME Protector
Social Security Income Replacement Solution
What happens to your Social Security benefit when your spouse passes away?
Many married couples rely on both of their Social Security benefits to provide monthly income, but when one spouse passes away, the surviving spouse will only receive the higher of the two Social Security benefits. Some people buy two traditional life insurance policies to help offset this loss of income. However, a traditional lump sum benefit solution can be expensive. Survivor Income Protector can be a more affordable alternative to help in the transition period of having less income.
Survivor Income Protector, offered by Americo Financial Life and Annuity Insurance Company, is a whole life insurance product with a Joint Life Rider designed to provide a benefit paid in monthly income payments to the surviving insured. This benefit can help offset the loss of income when a spouse passes away.
Who Should Consider Survivor Income Protector?
Survivor Income Protector may be a good fit if you:
î Are receiving Social Security benefits
î Are on a fixed income
î Want an income replacement stream instead of a lump sum death benefit
CALL TODAY - Phone: (228) 207-6225
Want to know how to pay your mortgage from the grave?
A new life insurance product can now allow your mortgage to be paid if your breadwinner dies.
The Payment Protector coverage works like traditional life insurance, but without the expensive premiums or arduous examination. With Americo’s Payment Protector a family can pay a premium every month in addition to their mortgage payment and if there is a death to the insured, the premium stops and the death benefit payout for the lifetime of the mortgage. This variation of insurance allows for a higher death benefit than lump sum payments at an affordable monthly cost. Best of all, the coverage is portable, so if you move or refinance, it stays with you. It is also available in many States up to age 70 for those who qualify!
Want to see what it would cost to protect your mortgage? Simply fill out the quote request form below and I’ll generate a quote for you. Have any questions? Just hit reply and email me, or my phone number is up top.
Americo Financial Life and Annuity Insurance Company is authorized to conduct business in the District of Columbia and all states except NY and VT. HMS Plus Payment Protector (Policy Series 303) is underwritten by Americo Financial Life and Annuity Insurance Company(Americo), Kansas City, MO, and may vary in accordance with state laws. Some products and benefits may not be available in all states. Certain restrictions and variations apply.
Top 3 Things to do for a Medicare Consult
1) You must initiate the call to us! By Law, we can NOT call you about your Medicare.
2) You must sign or otherwise record a Scope of Appointment agreement, (SOA).
3) Annual Election Period, (AEP), is just recently turned age 65, Initial Enrolment Period, (IEP).. No changes can be made outside of the AEP unless you qualify for a Special Election Period, (SEP), or you
Once you call us, sign or record an SOA we can discuss your Medicare Options. It is no more difficult than that! We look forward to hearing from you this AEP!