How to Bullet Proof Your Family Fortune & Sanity?

Financial Check-up

You understand the importance of protecting your assets and belongings. You insure your homes, cars, computer, iPad, iPhone, etc. Are you really properly protected? Is your most valuable asset (YOU) protected?

What if you die too soon? Who’s going to continue to pay for your family’s mortgage? Your family’s living expenses? Your children’s college tuition? Will your spouse and children be able to support themselves without your income?

What if you become disabled or chronically ill? Where’s your income coming from? How will you pay for your care? Will your family have to quit their job to take care of you?

What if you live a long life? Will your retirement savings be enough to provide for you until you die? Will you still be able to take care of yourself? Will you still be able to work and earn an income? Will your medical expenses increase?

These are all the question that you want an answer to when the time comes.

Replaces your income and provides for your family after you pass,

Provides an endless stream of retirement income you can’t outlive,

Pays for your long-term care when you cannot take care of yourself anymore,

Pays for your medical expenses when you’re chronically or terminally ill.

How to Create an Endless Stream of Retirement Income?

Will you outlive your retirement income?

Before answering that question, we need to first figure out what is your retirement income goal.

The rule of thumb is “twenty (20) times of your current income” is required for a comfortable retirement.

Are you saving enough? Do you have a retirement plan? Do you have a pension plan? Is your social security enough? Can you family or children support and care for you? Can you continue to work?

True story…

The mother-in-law of a friend of mine was recently “fired” from the company she has been working for many years. Of course, there is no pension. She’s always been a good worker. But the company has started picking on her trying to find ways to fire her because she’s older now and slower compared to her younger co-workers. So she made one mistake and she’s fired.

Do you think at age 65, you can easily find another job to support your living, let alone retirement income?

Do you think the story would be have been different if she has a retirement plan in place with an endless stream of retirement income that she can’t outlive?

In that case, she’ll be working because she loves her job so much, not because she HAS to.

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Income for life…

Annuity is an income insurance that guarantees a retirement income stream for as long as you live.

Never lose money…

Indexed annuity has a guaranteed “FLOOR RATE”, so you’ll never lose money even when the stock market tanks 50%.

Beats inflation…

An indexed annuity captures the upside of the stock market so your money grows risk-free, beating the inflation of 3.3% per year.

Beats taxes…

You defer income tax on interest credited to your policy, allowing your interest earned to compound every year until you start withdrawing income.

S.M.A.R.T. Retirement Planning

You CANNOT get a loan for retirement…

You CAN get a loan to pay for a vacation, a new car, a new home, college tuition, private school tuition, plastic surgery…but you CANNOT borrow for retirement. So don’t delay!!!

The 3-Legged Stool of Retirement

Pension

Fewer companies are offering retirement benefits these days – and for those that do, many are scaling back their plans. Will your pension be enough?

Social Security

It started out with 40 workers contributing for one retiree in 1940’s, now it’s 3 for one. Do you think there’s still Social Security when you retire?

Personal Savings

38 millions Americans live paycheck to paycheck. And only 59% of adults says they have savings. Do you have enough savings?

  • maximize retirement savings to at least beat inflation
  • maximize federal income tax benefits,
  • protect your income & assets
  • proper estate planning
Tax now

TAX NOW

Brokerage account

Certificate of deposit

Checking account

Savings Account

 

Tax later

TAX LATER

401k/403(b)

Annuity

SEP IRA

Thrift Savings Plan (TSP)

Traditional IRA

Tax never

TAX NEVER

Life Insurance

Health Savings Account

ROTH IRA

ROTH TSP

Related article: Tax-free Retirement

The rule of thumb is you’ll need twenty (20) times of your current annual income for a comfortable retirement.
Download Saving Your Future!

Long Term Care Insurance

Estate Planning

Final Expenses

Are you also saving for college?

Can You Afford Long Term Care?

Will you need long term care?

Most of you would answer “I don’t know”.

I don’t know either.

If I have a crystal ball that can tell the future, I would give you my honest answer.

Unfortunately, I don’t.

But my best advice for you is “be prepared when the need for long term care does arise in your future”.

Look at your elderly parents, uncles, aunties or grandparents at their current age. Do you think you’ll need long term care when you’re their age?

Long Term Care Need

Let’s see what options are available.

Medicare covers only a portion of long-term care costs up to 100 days; 20 days are provided at no cost and the remaining 80 are at a significant co-pay for the insured.

Long-term disability covers your lost income only, but doesn’t pay for any LTC needs. Oftentimes, when your job ends, so does your coverage.

Health insurance does not cover long-term care expenses. Medigap policies are health insurance and also do not cover LTC expenses.

Medicaid covers long-term care expenses for individuals with countable assets of $2,000 or less and care could be limited to a nursing home. You can no longer just transfer all your properties to your children to be qualified for Medicaid. They look at your assets in the past 5 years. If you sold a house in the last 5 years, they want you to spend down all that proceed until you’re poor enough to qualify.

If you don’t want to spend down all your asset to qualify for long term care…can you afford to pay out of pocket?

Is this a good option for you?

You can always pay for long term care out of pocket. But how deep is your pocket? Do you have the assets to pay for long-term care, and how long can that asset support your long-term care?

Rising Long Term Care Cost

Can your family members take care of you when you can’t take care of yourself?

Even the most responsible family may not be prepared physically, emotionally or financially to care for their loved one. 53% of Americans caring for a loved one lost income due to the demands of providing that care.

Hidden Cost of Long-Term Care

Long-term care insurance provides funding to cover home healthcare, assisted living, nursing home and even family member who takes care of you.

Long term care insurance premium are a lot more affordable than long term care. Besides, stand-alone long term care insurance policy, many life insurance policies offer long-term care insurance as a rider at very affordable rate.

So, can you afford NOT to have long term care insurance? Do you want to use up all your hard-earned asset on long-term care? Do you want to spouse or children to quit their job just so they can take care of you?

Tax-Free Retirement Plan

As a financial advisor, it is my duty to provide my clients with information and strategies on how to accumulate wealth so their money grow safely and be protected from market volatility while maximizing tax benefits.

Impact of Tax and Inflation

I just don’t like sharing my wealth with Uncle Sam, who’s not even my real uncle.

By maximizing your tax benefits, you’re also maximizing your savings. US debt is currently $19 trillion, do you think tax rate will be up or down when you retire. So do you want to pay tax now or later or never?

TAX NOW…

Brokerage account

Certificate of deposit

Checking account

Savings account

TAX LATER…

401k/403b

Annuity

SEP IRA

Traditional IRA

TAX NEVER…

Health Savings Account

Life Insurance

Roth IRA

Roth TSP

 

Max out all tax-free retirement account to reap the biggest tax benefits.

There are many wealth-building vehicles with tax benefits that can be used for personal wealth accumulation, retirement planning, college savings, estate planning, etc. And there are a few that you should pay attention to because of their additional benefits.

The Four Cornerstone Characteristics of a Safe and Sound Investment

4 Cornerstones of Safe & Sound Investment

Let’s see how the common retirement accounts compared with the lesser-known indexed universal life insurance.

IRAs vs IUL

From the table you can see that both Roth IRA and Indexed Universal Life Insurance (IUL) offer great tax-free benefits, which is important when it comes to wealth accumulation.

If you have children planning to go to college, cash accumulation in both life insurance and retirement accounts are excluded as assets when calculating for financial needs.

The IUL insurance, by far, offers the most benefits. Seriously, it is life insurance on steroid. You have all the benefit of a traditional or Roth IRA but none of the restrictions.

You get to accumulate wealth in the cash account protected from loss (no market volatility to worry) with guaranteed growth earning a handsome rate of return up to 15%.

You can also access your money whenever you need during your lifetime tax-free as emergency fund, such as medical expenses, long-term care, vacation, invest in real estate, etc.

Related article: Be Your Own Bank

Not only that, your young family will be taken care of financially if you passes too early. The death benefit pays out to your family tax-free.

It is also the choice for many who has a large asset portfolio and makes too much income to invest in an individual retirement account IRA. An IUL provides excellent asset and wealth protection and there is no limit on your contribution, but certain guidelines do apply.

One drawback of the life insurance is that you need to have good health to qualify. Therefore, start early when you’re still young and healthy.

The Individual retirement account (IRA) is great investment vehicle for retirement savings because of tax benefits.

The Traditional IRA allows you to deduct your contribution on your tax return for the year you made the contribution, reducing your taxable income that year. However, you’ll pay income tax when you withdraw from the account because your contribution is pre-tax money.

Contribution to a Roth IRA, on the other hand, is after-tax money, so you cannot deduct your contribution on your tax return. On the bright side, your money grows tax-free until distribution.

However, there is no guaranteed risk-free growth with the IRAs. Your money is usually invested in stocks, mutual funds or bonds and is exposed to market volatility with no guaranteed growth and requires specialized knowledge in the stock market to make a profitable investment.

Related article: Invest in Real Estate with a Self-Directed IRA

With both IRAs, there is a 10% penalty on early withdrawal before the age of 59 1/2. There are exemptions to the 10% penalty. You can make an early withdrawal if you’re using the money to pay for college tuition, medical bills or down payment for your first home.

Even though you escape the 10% penalty, but the income tax still applies for withdrawal from the Traditional IRA.
There is also contribution limits to the IRAs: $5,500 a year or $6,500 a year if you’re 50 and older.

How do you want to save for your retirement?