Does the 4% Rule Still Work?

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Jim Lorenzen, CFP®, AIF®

Before you can take income from a nest-egg, you have to HAVE a nest-egg; but, getting there takes more than discipline – it takes MOTIVATION!  What motivates YOU?

Here are some thoughts from The Financial Planning Association:

Reality Check

It used to be that Americans could count on a pension plus Social Security to get them through their Golden Years. But traditional pensions only account for an estimated 18% of the total aggregate income of today’s retirees, and Social Security accounts for only about 36%.1 Alas, the responsibility for the bulk of your nest egg now rests with you. Continue reading

Longevity Risk Worries Investors

6a017c332c5ecb970b01a3fcbc2c3d970b-320wiEnter Longevity Insurance – But Look Closely Before You Buy.

You name the fear, the financial industry will come up with a solution to sell.

These days, the fear is outliving our money.  Indeed, we are living longer… and all those extra years cost money.

Enter longevity insurance.  Like all financial products, there are good points and others not so good.  It pays examine the pros and cons in light of your own needs before you buy.

First, what it is:   Longevity insurance is generally nothing more than a single premium deferred annuity with a specified start date for making payments.   For example: A 65 year-old can purchase an annuity today; but the annuity doesn’t begin making payments until age 85. Once payments begin, they continue for life. Continue reading

Are You A Business Owner? Maybe You Should Know About Tax Bracket Planning!

6a017c332c5ecb970b01a73d75677c970d-320wiOwners of closely-held businesses have long understood the value of insurance as a funding tool for executive retention, transition planning, and enhanced retirement benefits; but, tax-brackets can have a significant impact on those solutions!

For example, a corporation in the 15% tax bracket gets to keep 85 cents of every taxable dollar it makes, while an individual in the 35% tax bracket gets to keep only 65 cents of every taxable dollar he or she makes. Since life insurance purchased to fund a buy-sell plan must be paid for with after-tax dollars, it may make more sense to pay the premiums with 85 cent dollars as compared to 65 cent dollars. Continue reading

Common Misconceptions About the Unlimited Marital Deduction

Senior couple meeting with agentDid you know that property transferred in excess of the unified credit equivalent will ultimately be subject to estate tax in the estate of the surviving spouse, meaning that use of the unlimited marital deduction will NOT eliminate estate settlement costs?

The marital deduction eliminates both the federal estate and gift tax on transfers of property between spouses, in effect treating them as one economic unit. Continue reading

Business Owners: Have you done tax bracket planning?

6a017c332c5ecb970b01a51162e90a970c-320wiTax brackets have an impact on your choice of funding insurance solutions to meet the needs of closely-held corporations and their shareholders!

For example, a corporation in the 15% tax bracket gets to keep 85 cents of every taxable dollar it makes, while an individual in the 35% tax bracket gets to keep only 65 cents of every taxable dollar he or she makes. Since life insurance purchased to fund a buy-sell plan must be paid for with after-tax dollars, it may make more sense to pay the premiums with 85 cent dollars as compared to 65 cent dollars. Continue reading