Hi Lee. I can't comment on Hancock's product but these types of Hybrid policies are becoming quite common. If you have an existing life insurance policy with cash value, you may be able to convert that policy to a hybrid policy as well. I suggest you contact a fee only financial planner to help you. The have insurance experts that they can refer you to and help you make the best decision for you. Find one at www.napfa.org.
Lee, that type of product is usually life insurance with an additional cost for a rider added to it that lets you access some of the life insurance death benefit for long-term care costs. These products can be difficult to understand and evaluate. Also since it often gets overlooked in discussions about these hybrid life/LTC products, remember to ask yourself do you actually need life insurance? And if not, is it worth paying for life insurance you don't need to have the ability to buy the LTC rider?
Hassan. Be a little wary of these 'formulas" that state how much you should invest based on your age. Every client situation is different and there is no set number. A qualified planner can better help you determine your allocation based on a thorough analysis for your particular circumstances
Leslie, most states should recognize payable on death or transfer on death ownership structures. Otherwise you can do a Revocable Living Trust to own these accounts so they can pass to heirs without going probate.
Leslie, essentially yes, although on a brokerage account it will probably be called a Transfer On Death or TOD rather than POD.
Hi Leslie. yes, you can set up a POD (payable on death) or TOD (transfer on death) account; however, only do so after a careful analysis of your estate plan. In my experience, this is one of the most overlooked aspects of a financial plan.
Leslie. David's suggestion of a revocable trust is a good alternative to consider.
If you were married to your former wife longer than 10 years and she is at her full Social Security retirement age then she can file to receive a benefit based on your records. I can't remember if you must have begun taking benefits for her to file on yours.
Dave- Yes, she can apply and it will not affect your (or your current spouse's) benefits at all.
Dave, she can and no, it does not affect your benefit or your current wife's benefit. Most of the time, these transactions take place without the former spouse even knowing about it.
If you have reached full retirement age, and you are:
• eligible for a spouse's benefit and your own retirement benefit, you may choose to receive only spouse's benefits.
•eligible for an ex-spouse's benefit and your own retirement, you may choose to receive only the ex-spouse's benefit. Your ex-spouse needs to be 62 but he or she does not have to have filed for benefits.
Every year of earnings is taken times a factor to determine the base benefit amount. Go to www.ssa.gov and test various scenarios for your situation in the benefit calculator.
Hi Jean. Social Security calculates your average indexed monthly earnings during the 35 years in which you earned the most.
Hi Jean. I believe the benefit is calculated based on your highest 35 years of earnings. Earlier years are adjusted for inflation. If I recall, it is a multi step formula for calculating the benefit. Whether or not you should "stick it out" depends on a lot of things that I can't answer here. At age 57, you would benefit from a retirement analysis prepared by a professional. Find one to help you at www.napfa.org.
Many people wonder how their benefit is
figured. Social Security benefits are based on
your lifetime earnings. Your actual earnings are
adjusted or “indexed” to account for changes
in average wages since the year the earnings
were received. Then Social Security calculates
your average indexed monthly earnings during
the 35 years in which you earned the most. We
apply a formula to these earnings and arrive
at your basic benefit, or “primary insurance
amount” (PIA). This is how much you would
receive at your full retirement age—65 or older,
depending on your date of birth.
Jean - Your Social Security Benefits are based upon your higher 35 years of earnings, indexed for inflation. Use the Detailed SSA calculator to model it (it lets you enter earnings year by your) and see how it changes. Assuming that you don't die prematurely, working longer can increase your SSA benefit in the long term, but depending on your earnings history the impact may be smaller or larger.
Jess, if you foresee your income increasing over the years so your tax rates will be higher in future years then a Roth 401K would be the way to go at this time while your tax rates are lower.
Hi Jess. A traditional 401k gives you a tax benefit now, while a Roth 401k gives you a tax benefit upon distribution. Check with your accountant as to what makes the most sense.
Hi Jess. Roth, Roth, Roth. Did I mention Roth? You are young and probably at the lower end of your lifetime earnings. You probably do not need much in the way of current tax deductions but you will really benefit from TAX FREE withdrawals when you retire. I think you should do Roth :)
Jess - if your tax rate now and your tax rate in retirement are the same, it's theoretically a wash. But in practical terms, the Roth is often better for young people just starting out retirement-wise because they may be at a lower tax bracket now than later in life. Having said that, the impact on your paycheck right now will be smaller if you do the traditional. Does your employer offer any matching contributions?
Meg, I am sorry for your loss. Yes, your widow's benefits will be reduced if you take it before your FRA. You might benefit from finding a financial planner who does Social Security Benefits planning. Especially if you have an earnings history that is similar to or higher than your late husband's. The strategy mentioned in the Kiplinger article posted comes to mind but may or may not be an effective approach depending on your earnings history.
For a non-qualified annuity a partial distribution takes the taxable growth out first. If it is annuitized the taxable amount is prorated in each payment.
Lizzie - Maybe. If you are likely to be at this employer long enough to have those contributions vest (meaning you get to keep them, often 3-5 years, but sometimes less), you should try to contribute at least that much. If saving 4% is a financial stretch for you, doing it pre-tax can make it less painful. If 4% or more is not a big stretch, you are effectively saving more by doing the same amount to the Roth because you are also paying the income taxes now, separately.
Lizzie - Also note that whichever route you choose to go, the employer matching contributions will always be pre-tax, not Roth.
@ Lizzie - Which may be good since we never know how the code may or may not evolve in the future.
Sarah. If, by chance, your annuity is an IRA Annuity (which is not too common, but I have seen it happen), then, most likely, all distributions are taxable.
Hi Lee. I can't comment on Hancock's product but these types of Hybrid policies are becoming quite common. If you have an existing life insurance policy with cash value, you may be able to convert that policy to a hybrid policy as well. I suggest you contact a fee only financial planner to help you. The have insurance experts that they can refer you to and help you make the best decision for you. Find one at www.napfa.org.
Lee, that type of product is usually life insurance with an additional cost for a rider added to it that lets you access some of the life insurance death benefit for long-term care costs. These products can be difficult to understand and evaluate. Also since it often gets overlooked in discussions about these hybrid life/LTC products, remember to ask yourself do you actually need life insurance? And if not, is it worth paying for life insurance you don't need to have the ability to buy the LTC rider?
Hassan. Be a little wary of these 'formulas" that state how much you should invest based on your age. Every client situation is different and there is no set number. A qualified planner can better help you determine your allocation based on a thorough analysis for your particular circumstances
Hi, Leslie. This story should help:
