![]() Behind on your retirement planning? You’re not alone. A recent study from Gallup found that more than half of Americans worry that they won’t have enough money in retirement.1 For many of those concerned workers, the solution seems obvious. They’ll simply work longer, or they’ll work part time in retirement. A Bankrate study found that 70 percent of workers want to continue working as long as possible. More than 40 percent of those respondents said they’ll have to keep working because they will need the money.2 Working late into life may seem like a reasonable strategy. After all, if you’re working, you’ll have regular income to rely on. You won’t need to drain your retirement savings, and you may even be able to continue contributing to your retirement accounts. Unfortunately, a strategy to work late into retirement age may not be as reliable as you might think. Below are a few reasons why you may want to rethink your plans to work into your 60s or even 70s. While working longer may be a good idea, it may also be wise to have a backup strategy. Disability The Council for Disability Awareness estimates that the average adult has a 25 percent likelihood of becoming disabled.3 However, the risk may rise with age. The Centers for Disease Control and Prevention says 60 percent of all adults age 65 and older suffer some kind of limitation on at least one basic living activity.4 Disability can always have a substantial financial impact, but it can be even more devastating for older workers. If you’re unable to work, you’ll lose out on income and retirement contributions. You’ll also need to take money from your savings to fund your lifestyle and pay for your care. Long-Term Care According to the U.S. Department of Health and Human Services, 70 percent of all 65-year-olds will need long-term care at some point in their lives.5 Obviously, if your health has deteriorated to the point that you need long-term care, you won’t be able to work. However, another possibility is that your spouse may need care. If he or she needed full-time support, would you be able to hire in-home help? Or would you have to quit working to provide the care and assistance? And how would that impact your finances? Again, your desire to work may be in conflict with conditions beyond your control. Job Loss A recent Transamerica study found that 30 percent of retirees stopped working earlier than they would have liked. A majority—two-thirds—quit because of employment reasons, primarily job loss.6 Employment conditions can change quickly. Just because your job is secure today doesn’t mean it will be in the future. Working late into life may be the right decision, but be sure to have backup strategies in the event your job is eliminated. Ready to explore alternatives and backup plans? Let’s discuss it. Contact us today at Financial Solutions Group to start the conversation. We welcome the chance to help you analyze your needs and develop a strategy. 1https://news.gallup.com/poll/210890/americans-financial-anxieties-ease-2017.aspx 2http://www.bankrate.com/finance/consumer-index/money-pulse-0916.aspx 3http://www.disabilitycanhappen.org/chances_disability/disability_stats.asp 4http://www.cdc.gov/nchs/fastats/disability.htm 5https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html 6https://www.transamericacenter.org/docs/default-source/retirees-survey/retirees_survey_2015_report.pdf Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18087 – 2018/10/1
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![]() Every business owner has to make an exit at some point. Some owners leave on their own terms, either through retirement or with the sale of the company. Others, though, exit before they’re ready via disability, health issues or even death. While it may not be pleasant to think about the latter category of exits, it’s important to consider what may happen to your business and your family if you pass away. Estate planning can sometimes be a complicated process, but it can be even more complex if you’re a business owner. You have to consider how to compensate your family for your years of investment and hard work. You also may have business partners to think about. And you probably want to create a smooth transition for your employees, customers and other interested parties. Fortunately, with some discipline and proactive planning, you can create a strategy that meets your goals and protects your family and business. Below are a few common mistakes that business owners make when planning their estate. If you can avoid these, you’ll have a good head start on protecting your legacy. Not planning for probate. Probate is the legal process of settling an estate. After a person passes away, his or her estate flows through the local probate court. During this process, the court and the estate executor settle all outstanding debts, file and pay final taxes, liquidate assets, notify heirs and handle countless other tasks. As you might imagine, probate can be time-consuming and can generate substantial costs. Some assets are exempt from probate, but only if they are titled correctly. For example, IRAs, life insurance, annuities and even trusts are exempt from probate because they have beneficiary designations. Without proper planning, however, your business may have to go through the probate process. That could leave ownership unsettled for months or even years. The court may decide who inherits your business, and it could choose someone you wouldn’t have selected. The legal and administrative fees could also drain your estate assets. You can avoid all this by working with an estate planning professional to develop a strategy. Not having a buy-sell agreement with your partners. You may have a co-owner or partners who have helped you finance and build your business. In fact, it may make the most sense for your partners to take over your share of the business after you pass away. After all, they understand the company and have been intimately involved in its growth. However, that doesn’t mean you should simply leave your share to your partners. You’ll want your spouse, kids and other loved ones to be compensated for your hard work. If you leave your share to your partner, he or she may have no legal obligation to pay your family for your investment. Instead, work with a professional to establish a buy-sell agreement. This tool governs how your share is transferred and how your family is compensated. These agreements are often funded with life insurance, so you can rest easy that your family will enjoy the fruits of your hard work. Not choosing a successor in advance. If you’re like a lot of business owners, you want your legacy to last well into the future. Even after you’re gone, you may want your business to continue providing for your children and grandchildren. And you likely want your company to continue to serve your customers. For business owners, estate planning isn’t just about handling the financial transition of the company. It’s also about putting the right successor owner in place to lead the company for years to come. Take time now to think about who the next owner should be. Should it be a child or other family member? What about a key employee? Maybe a competitor or vendor would be best to take over the business? The earlier you think about these questions, the sooner you can develop and implement a transition plan. It might take years for you to train the next owner. It’s better to start that process sooner rather than later. Ready to develop your estate plan? Let’s talk about it. Contact us today at Financial Solutions Group. We can help you analyze your needs and goals, and then develop a strategy. Let’s connect soon and start the conversation. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 18086 – 2018/10/1 |
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