The deadline for filing your 2018 tax return is right around the corner. Have you filed your return yet? If so, were you satisfied with the outcome? Or were you surprised by how much you paid in taxes last year?
The recent tax law dramatically changed the tax code. For many Americans, the law means reduced taxes. If you don’t plan accordingly, however, it’s possible that you could owe money to the IRS after your filing. It’s also possible that you could pay more in taxes than necessary. Now is a great time to review your strategy and identify action steps that could reduce your tax exposure. If you haven’t reviewed your financial plan recently, you may be missing out on a number of tax-efficient tools and products. Below are a few tips to consider as you review your taxes: Review your deductions. One of the biggest changes of the Tax Cuts and Jobs Act is the elimination and reduction of a wide range of deductions. Most itemized deductions were eliminated, including those for alimony payments and interest on many types of home equity loans. Caps were also implemented for state, local and property tax deductions. The law also eliminated personal exemptions.1 To make up for these changes, the law more than doubled the standard deduction.1 For many people, that means it will be more advantageous to take the standard deduction than to itemize deductions. If you’ve planned your spending based on the ability to itemize and deduct certain expenses, you may want to reconsider your strategy. Those deductions may no longer be allowed under the new law. Check your withholding amount. The law also reduced tax rates across the board and changed the income brackets for each rate level. As a result, many employers adjusted their withholding amounts. Not all did, however. And some may have adjusted their withholdings incorrectly. In fact, according to a study from the Government Accountability Office, 30 million people, or just over 20 percent of taxpayers, are not withholding enough money from their paychecks to cover taxes.2 Are you part of that group? If you’re not sure, talk to your financial professional about whether you should increase your withholdings. Maximize your tax-deferred savings. Tax deferral is a great way to reduce current taxes and save for the future. In a tax-deferred account, you don’t pay taxes on growth in the current year as long as your money stays in the account. You may face taxes in the future when you take a distribution. Many qualified retirement accounts, such as 401(k) plans and IRAs, offer tax-deferred growth. In 2019 you can contribute up to $19,000 to your 401(k), plus an additional $6,000 if you are age 50 or older. You can put as much as $6,000 into an IRA, or up to $7,000 if you’re 50 or older.3 Want more tax deferral beyond your 401(k) and IRA? Consider a deferred annuity. Annuities offer tax-deferred growth. They also offer a variety of ways to increase your assets. Some pay a fixed interest rate and have no downside risk. Others let you participate in the financial markets according to your risk tolerance and goals. A financial professional can help you find the right annuity for your strategy. Develop sources of tax-efficient retirement income. Taxes don’t stop when you quit working. If you’re approaching retirement, now may be the time to plan ahead and minimize your future tax exposure. You can take steps today to create tax-efficient income for your retirement. For example, distributions from a Roth IRA are tax-free assuming you’re over age 59½. You may want to start contributing to a Roth or even consider converting your traditional IRA into a Roth. You can also use a permanent life insurance policy as a source of tax-efficient income. You can withdraw your premiums from your life insurance cash value tax-free. Also, loans from life insurance policies are tax-free distributions. You may want to discuss with your financial professional how life insurance could reduce your future taxes in retirement. Ready to take control of your tax strategy in 2019? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://www.thebalance.com/trump-s-tax-plan-how-it-affects-you-4113968 2https://www.cnbc.com/2018/08/01/30-million-americans-are-not-withholding-enough-pay-for-taxes.html 3https://www.cnbc.com/2018/11/01/heres-how-much-you-can-sock-away-toward-retirement-in-2019.html 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. 18582 - 2019/2/27
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Worried about the direction the financial markets have taken over the past few months? You’re not alone. After nine consecutive years of growth, the markets ended 2018 on a down note. The S&P 500 finished the year down more than 6 percent, the first time it has ever finished a year negative after being positive through the first three quarters.1
In fact, some indexes have already entered bear market territory. The Nasdaq dropped more than 23 percent from its Aug. 29 high. The Wilshire 5000 and Russell 2000 also dropped more than 20 percent from their respective peaks in early September.1 If you’re approaching retirement, these losses could be stressful. When you’re younger and just starting your career, you have time to absorb losses and recover. That may not be the case if you’re only a few years from retirement. You’ll soon need to use your assets to generate income. A substantial decline may force you to delay retirement or make cuts to your planned lifestyle. Fortunately, there are steps you can take to protect your nest egg and your retirement. Below are three tools that can help you reduce your exposure to downside risk. Talk to your financial professional to see how these may play a role in your financial strategy. Fixed Indexed Annuity When it comes to investing, risk and return usually go hand in hand. Those assets that offer the most potential return often come with the highest exposure to risk. Assets that have little risk also offer little potential growth. It’s difficult to find growth opportunities that don’t have downside market risk. There are some tools available, though. One is a fixed indexed annuity. In a fixed indexed annuity, allows your money the potential to grow on a tax-deferred basis. The potential growth comes in the form of interest credited to the contract typically anually. Your interest credited each year is based on the return of a specific external index, like the S&P 500. The better the index performs in a given period, the higher the potential for the interest credits, up to a certain limit. If the index performs poorly, you may receive less or zero interest, but your contract won’t decline in value. Fixed indexed annuities have guarantees* on the value of the contract. That means you’ll never lose premium because of market declines. A fixed indexed annuity could be an effective way to plan for retirement income without exposing yourself to market risk. Deferred Income Annuity Are you concerned about your ability to generate retirement income in the future? Or are you worried that your retirement income isn’t guaranteed*? A deferred income annuity, also known as a longevity annuity, could be an effective option. With a deferred income annuity, you contribute a lump-sum amount and pick a date in the future to begin receiving income. At the specified time, the annuity company will begin paying you an income stream that’s guaranteed* for life, no matter how long you live. Work with your financial professional to project your income and see if a deferred income annuity can help you fill any gaps. Life Insurance You’ve probably purchased life insurance at some point in your life with the goal of protecting your spouse, children or other loved ones. Life insurance is a highly effective protection tool, but it can also do more. Some life insurance policies have a cash value account. Each time you make a premium payment, a portion goes into the cash value. Those funds grow on a tax-deferred basis over time. The growth usually comes in the form of dividends or interest, depending on the policy. You can also use the life insurance policy to generate tax-free income in retirement via loans or withdrawals. If you have a life insurance policy, you may want to explore how you can use it to achieve low-risk, tax-deferred growth and possibly create supplemental income in the future. Or you may want to look at new policies and see how they can help you protect your assets. Ready to protect your nest egg? Let’s talk about it. Contact us at Humphrey Financial. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation. 1https://www.nasdaq.com/article/is-a-recession-coming-heres-how-to-survive-cm1081931 *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. 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. 18412 - 2019/1/16 Volatility on Valentine’s Day: How Couples Can Overcome Disagreements About Investment Risk2/12/2019 Valentine’s Day is supposed to be a day for romance and reconnection. For many couples, however, this time of year could be marked by disagreements about money. Nearly half of all married couples argue about financial issues.1
With the new year just starting and tax season right around the corner, many people use this time to evaluate their spending, earnings and financial performance over the previous year. That analysis could reopen sore spots about money management. The performance of the financial markets over the past few months could also be a source for disagreement among couples, especially those who have differing investment styles. After starting strong for the first three quarters of the year, the S&P 500 finished with an epic meltdown in the fourth quarter. The index ended the year down 7 percent, the first time in history it’s finished the year negative after being positive for the first three quarters.2 Do you and your spouse disagree about investing styles? Does one of you take a more aggressive stance while the other prefers to play it safe? Below are a few helpful tips on how you and your spouse can meet in the middle and get past your investment-related disagreements: Draft an investment policy statement. Many couples disagree about their investment approach because they’ve never developed a formal investment strategy. They generally know they want to save for retirement, but they’ve never discussed their specific objectives or tactics. An investment policy statement does just that. Your investment policy statement is a written document that states your goals, acceptable risks and the steps you will take to reach your objectives. It outlines which types of investments are appropriate for your strategy and which are not. You can use your investment policy statement as a guide for making future decisions. The process of developing the investment policy statement could be beneficial for many couples. You’re forced to share your differing opinions and compromise to reach a strategy. Those conversations could help you work out differences and find areas where you agree, which could diffuse future arguments. Develop a retirement income plan. Often, arguments are fueled by uncertainty about the future. You’re unsure of when you’ll be able to retire or how much more you need to save, so that heightens your anxiety and sharpens disagreements. You may be able to avoid arguments by eliminating the uncertainty. Work with your financial professional to develop a retirement income plan. You can project your future retirement income from sources such as Social Security, an employer pension and even your own savings. You can also build a retirement budget to estimate your spending. These two projections should give you an idea of how close you are to reaching your goals, how much more you need to save and how much risk you should take to achieve growth. Don’t avoid the conversation. Have you and your spouse agreed to disagree about your differing investment styles? Do you avoid the conversation? Or do you go it alone with your individual accounts so you don’t have to discuss issues that may lead to disagreement? While you may not want to disagree or argue, it’s also not helpful to avoid the conversation. If you each have differing styles and don’t have a cohesive plan, you could be missing out on opportunity. For example, assume your spouse is aggressive with his or her investment style and takes on a substantial amount of risk. Perhaps you’re conservative and choose assets that offer little return potential but also have little chance of loss. You may feel that the “go it alone” approach works because you each invest according to your comfort level and you avoid arguments. By avoiding the conversation, however, you may be missing out on opportunities to meet in the middle and achieve better performance. For example, you could find an allocation that has growth potential and reduced risk. You could use tools such as annuities that offer growth without downside exposure. The only way to find these opportunities is to discuss your differing approaches and look for middle ground. Work with a professional. Finally, you may find it helpful to bring in a third party, like a financial professional. They can give objective, impartial feedback and also provide information and analysis that may change your approach. They can also help you develop a retirement strategy and an investment policy statement to guide your decision-making. Ready to overcome your investment disagreements with your spouse? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://nypost.com/2017/08/03/the-reasons-most-couples-argue-about-money/ 2https://www.cnbc.com/2018/12/31/the-sp-500-will-make-history-when-it-ends-the-year-with-a-loss.html 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. 18408 - 2019/1/14 It’s that time again. A new year is here, which means a volatile 2018 is in the rearview mirror. The markets suffered a steep drop at the end of last year after climbing steadily through the first three quarters. A number of factors contributed to the markets’ fourth-quarter tumble, including tariffs, interest rate hikes and trouble in the tech sector.
A new year doesn’t mean those challenges are gone, but it does represent a fresh start. And if history is any guide, January can be a strong month for investors. According to a study from LPL Research, in the 68 years from 1950 through 2017, January has been a positive month for the S&P 500 41 times. It’s been negative 27 times.1 As any investor knows, history doesn’t guarantee future performance. However, there does seem to be a correlation between market performance in January and the rest of the year. How do January returns impact the rest of the year? According to LPL Research, there’s a relationship between January returns and market returns over the remainder of the year. Its research showed that during years in which there was a positive January return, the market had an average return of 12.2 percent over the next 11 months. When the January return was negative, the S&P 500 returned only 1.2 percent the rest of the year.1 If January returns are more than 5 percent, the correlation is even more pronounced. In those years, the market had an average return of 15.8 percent over the next 11 months. In fact, when January has a return of more than 5 percent, the rest of the year is positive 91.7 percent of the time.1 What is the January effect? Why has January been positive more often than not? And why does January’s return seem to impact the rest of the year? There are no definitive answers to these questions, but there are theories. There’s an idea called the “January effect,” which suggests that January returns may be the product of tax strategy. Investors sell stocks in December to harvest tax losses before the end of the year. That depresses prices and creates a buying opportunity in January. Because investors sold at the end of the year, there’s cash on the table to buy in the beginning of the next year. Of course, this is just a theory. There’s no way to conclusively prove whether the January effect is a real phenomenon. Even if it could be proved, it’s never wise to change your long-term investment strategy based on short-term opportunities. If you’re concerned about the volatility in 2018 or the coming year, now is a great time to meet with a financial professional. They can help you review your strategy and possibly make changes that reduce your risk exposure and allow you to take advantage of opportunities. Ready to evaluate your investment strategy? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and goals and implement a plan. Let’s connect soon and start the conversation. 1https://www.thestreet.com/story/14469889/1/stock-market-s-strong-january-performance-bodes-well-for-the-rest-of-the-year.html 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. 18345 - 2018/12/31 A new year is here, and with it comes a flood of year-end tax documents like W-2s, 1099s and others. Before you know it, the April 15 tax filing deadline will be upon us, and it will be time to submit your return.
It’s always wise to meet with your financial professional at the beginning of the year. It gives you an opportunity to discuss the past year, your goals for the coming year and your tax strategy. However, a consultation with your financial professional could be especially helpful this year. The Tax Cuts and Jobs Act was signed into law in late 2017 by President Trump. While some of its changes went into effect last year, 2018 was the first full calendar year under the new law. The return you file in April will likely be the first that reflects much of the law’s changes. Below are a few of the biggest changes and how they could affect your return: Increased Standard Deduction The new tax law impacted a wide range of credits and deductions, from the deduction of medical expenses to credits for child care. Those who itemize deductions may have felt the brunt of these changes. However, the tax law significantly increased the standard deduction. In 2017 the standard deduction was $6,350 for single filers and $12,700 for married couples. The new law increased those numbers to $12,000 and $24,000, respectively.1 Given the changes to itemized deductions and the increased standard deduction, you may want to consult with a financial or tax professional before you file your return. If you’ve traditionally itemized deductions in the past, that may no longer make sense. New Tax Brackets The new tax law also made significant changes to the tax brackets. There are still seven different brackets, just as there were before the passage of the law. And the lowest rate is still 10 percent. The top income tax rate is down to 37 percent, however, from 39.6 percent.2 There are similar cuts throughout the rest of the brackets as well. The law also made changes to the income levels for each bracket. Generally, the bracket levels were increased throughout the tax code, which means you have to earn more before moving into a higher bracket. Under the old tax code, for example, a married couple earning $250,000 would be in the 33 percent bracket. Under the new law, that same couple would be in the 24 percent bracket. A single individual earning $80,000 would be in the 28 percent bracket under the old law but is now in the 22 percent bracket.2 Itemized Deduction Changes As mentioned, the new tax law increased the standard deduction amounts. However, those increases came at the expense of many itemized deductions. The new law eliminated or reduced many common deductions, including those for state and local taxes, real estate taxes, mortgage and home equity loan interest, and even fees to accountants and other advisers. However, there could be other opportunities to boost your itemized deductions above the standard deduction level. Charitable donations are still deductible, as are medical expenses assuming they exceed the 7.5 percent threshold. If you’re a business owner, you can deduct many of your expenses, including up to 20 percent of your income assuming you meet earnings thresholds.3 Ready to develop your tax strategy? Let’s connect soon and talk about taxes and your entire financial picture. Contact us today at Humphrey Financial. We can help you analyze your needs and goals and implement a plan. 1https://www.nerdwallet.com/blog/taxes/standard-deduction/ 2https://www.hrblock.com/tax-center/irs/tax-reform/new-tax-brackets/ 3https://money.usnews.com/investing/investing-101/articles/know-these-6-federal-tax-changes-to-avoid-a-surprise-in-2019 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. 18326 - 2018/12/26 The end of the year is almost here and 2019 is nearly upon us. If you’re like many Americans, you’re planning holiday parties, scheduling time away from work and thinking about gifts for your loved ones. You may be considering resolutions and goals for the new year, including your progress toward retirement. The end of the year is a great time to review your financial strategy and identify areas for improvement in the coming year. Below are a few questions to ask about your retirement plan and your financial future. If you haven’t reviewed your strategy in some time, now may be the right time to do so. A financial professional can also help you look at your strategy with fresh eyes and identify areas for change. Should you increase your contributions? Do you use a 401(k) or IRA? Qualified plans like the 401(k) are an effective way to save for retirement. They offer tax-deferred growth and potential employer contributions. Those two things could help you accumulate retirement assets quickly. Consider increasing your contributions in 2019. The maximum 401(k) contribution increases to $19,000 next year. 1 If possible, look at your budget and see if you can increase your contributions. Even a small increase can have a big impact over time. You can also contribute up to $6,000 to a traditional or Roth IRA.1 That’s in addition to your 401(k) contributions. An IRA can offer additional opportunity for tax-deferred growth, along with other tax-favored treatment. Your contributions to a traditional IRA could be tax-deductible. Withdrawals from a Roth IRA after age 59½ are tax-free. Contributions to an IRA could help you reach your retirement savings goal. Is your allocation still appropriate? Do you feel like you’re becoming more conservative over time? That’s natural. The closer you are to retirement, the less time you have to recover from a market downturn. That means you may feel like you have less tolerance for risk and volatility. Work with your financial professional to see if your allocation is still aligned with your risk tolerance. If you haven’t adjusted your allocation in several years, it may be time to shift to a more conservative strategy. You also may want to consider an annuity as part of your planning. Annuities offer a variety of ways to minimize risk. Some offer downside protection against loss and predictable interest payments. Others offer a guaranteed* lifetime income stream in retirement, regardless of market performance. Your financial professional can help you determine whether an annuity is right for you. Are you exposed to risk? All it takes is one financial emergency or unplanned expense to derail your retirement strategy. You could face disability or significant medical costs. A job loss could disrupt your ability to save. Fortunately, you can use insurance to protect against many risks. Take a look at your protection strategy to see if there are any gaps. Do you have sufficient life insurance to protect your family in the event of your death? Are you protected against long-term disability? If you’re approaching retirement, have you considered how you might pay for future long-term care costs? Again, a financial professional can help you answer these questions and develop a strategy. Ready for your year-end review? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation. 1https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000 *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. 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. 18184 - 2018/10/22 Risk management is at the core of any financial plan. If you’re not protected from risk, it could be impossible to reach your goals. There are a number of risks that could threaten your financial strategy, like premature death, medical expenses, home damage and more. Fortunately, you can usually use insurance to minimize these threats. Many people don’t sufficiently protect themselves from one of life’s biggest risks, though. It’s disability. Contrary to popular opinion, disability is fairly common. The Council for Disability Awareness estimates that 25 percent of working adults will suffer a disability at some point in their lifetime.1 Surprised by that statistic? Disability is more common than you think because it can be caused by such a wide range of issues. Fortunately, you can take steps to protect yourself. Below are some tips and guidance on what causes disability and how it can impact your financial strategy. A financial professional can help you assess risk and take steps to protect yourself. Leading Causes of Disability Many workers believe disability is only caused by workplace accidents. That assumption is usually incorrect. Accidents are a leading cause of disability, but they’re not the only cause. In fact, any illness, injury or other health ailment that causes you to miss work can be a disability. Back pain is a leading cause of disability, as are issues with knees and other joints. Heart attacks, strokes, cancer and other serious illnesses are also leading causes for disability claims. Some disability policies even cover time away from work for addiction and mental health issues.2 As you can see, this list includes a variety of health problems. Some may be the result of an accident, but others are related to illness or are simply the natural result of aging. Even if you’re in a relatively safe job, you’re still vulnerable to disability risk. Costs of Disability Long-term disability doesn’t just hurt your health. It can also impact your bank account. You may have sizable medical bills. You may need to hire someone to provide in-home care, depending on the extent of your injuries. Perhaps most importantly, though, you may lose income due to your inability to work. That could impact your ability to pay your bills as well as save for retirement and future financial goals. You might have to take on debt to support yourself. Your career could be disrupted, limiting your future earnings. The costs related to disability can be substantial. Unfortunately, many Americans aren’t prepared for the risk. While workers’ compensation may be available, that’s only for injuries suffered while on the job. Social Security also provides disability benefits, but the average monthly payment is only $1,197.3 That’s likely insufficient to fund your lifestyle. Disability insurance can be an effective, cost-efficient way to manage a sizable risk. Contact us today at Humphrey Financial. We can help you analyze the risk and develop a management strategy. Let’s connect soon and start the conversation. 1http://disabilitycanhappen.org/disability-statistic/ 2https://www.benefitspro.com/2018/05/17/10-top-causes-of-disability-claims/?slreturn=20180917142631 3https://www.ssa.gov/oact/STATS/dib-g3.html 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. 18185 - 2018/10/22 Estate planning is an important part of any financial strategy. It’s a broad term that covers a lot of issues, but estate planning generally refers to the distribution of one’s assets after death. An estate plan may include a will, trust and other documents that state how your property and other assets should be distributed to your heirs. In today’s digital age, though, estate planning isn’t just for financial assets. You may have virtual accounts and assets that also need planning and protection. For instance, your email may hold important or sensitive information. Your social media accounts may hold photos, videos or other assets with sentimental value. Perhaps you even have online investment accounts or income streams that will need management after your death. Unfortunately, there’s no standard legal process for managing these assets. While a will, trust and other tools are accepted as legal documents to manage financial assets, it’s unclear how these documents can be used with regard to digital accounts. This is a relatively new area of estate planning, so your strategy could evolve over time. However, there are a few basic steps you can take today to protect yourself and your digital footprint. Decide on your wishes for your digital assets. Before you take any action, it’s helpful to sit down and think about your wishes and objectives. Make a list of your important accounts, such as email, social media, photo and file storage, and more. Then consider what you would like to happen to those accounts after you pass away. Are there any compelling reasons why someone would need access to an account? For instance, do you do business through an email or online payment account? Would your family need access to that information? Also consider the sentimental value of your various accounts. Do you have pictures or other memories that you would like to share with your family after you’re gone? Finally, privacy is also a concern. If you give your family access to your email or social media after you pass away, consider that they may be able to see everything you have ever done in those accounts. There may be certain information or communications that you don’t want to share with your children or other loved ones. Learn about your digital vendors’ rules. Since there are no standard rules about posthumous digital management, each company has created its own rules and guidelines. Some email providers are strict and don’t allow any access after an account owner’s death. Others allow access if the account hasn’t been used in several months. Some social media companies will keep your page up as a “remembrance page” with limited access to others. Do some research to see how your primary account platforms operate after a user’s death. They may allow you to designate a backup person to take over your account or access certain information. If they don’t allow that option, you may need to consider alternative strategies. Create written instructions. Theoretically, you could include account management instructions, usernames and passwords in your will or other documents. That may not be a great idea, however, as those documents are often filed as public record. That means anyone could gain access to your accounts. Instead, consider using a password management tool to store login info, and then simply have your estate executor provide that info to the appropriate person. You could also store a document with digital asset instructions along with your other important documents, such as your insurance policy, will and others. Ready to review your estate planning strategy? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your objectives and all your assets, and then develop a plan. 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 Do you have an estate plan? While it may not be pleasant to think about your own death, estate planning is an important part of any financial strategy. Your estate plan provides guidance to your heirs and loved ones on what should happen to your assets, income and other important accounts after you pass away. Estate planning isn’t just for what happens after you pass away, though. You can also use it to address issues that may arise at the end of your life. Specifically, you may want to consider incapacitation, which is the inability to make or communicate your own decisions. It’s usually caused by Alzheimer’s or other cognitive issues, but it can also be caused by other ailments. Incapacitation is too important to ignore, especially if you’re nearing or entering retirement. Without an incapacitation plan, your family could face legal, financial and even personal challenges as your health deteriorates. You may have people making decisions on your behalf whose wishes don’t necessarily align with your own. Below are a few of the biggest consequences that can come from incapacitation if you don’t have a plan in place. Incapacitation may not be a likely scenario, but it is possible, especially if you’re entering retirement. Now may be the time to develop a strategy. Financial Issues The most obvious problem with incapacitation is that you’re not able to make important financial decisions. Even if you’re incapacitated, bills still have to be paid and your investments still need to be managed. Your spouse may be able to handle some of these responsibilities, but he or she could face complications with accounts that are only in your name. If you’re not married, the issue could be even more complex. A grown child or other family member may be responsible for your bills or other financial issues. They may have to work out payment plans with health care providers or make investment decisions on your behalf. They may even have to sell your home or other assets. Fortunately, there are steps you can take to retain control, even if you should become incapacitated. One step is to use joint account ownership when possible with your spouse or a trusted family member. At a minimum, keep your spouse informed about your various accounts, bills and income sources. You also could put certain assets in a living trust. You’d name yourself as trustee and another person as successor trustee. If you ever become incapacitated, your successor trustee takes over management of the trust assets. Legal Your incapacitation could also have legal ramifications. Some health insurers won’t pay for certain procedures without consent from the primary party. If you’re incapacitated, it’s tough to provide that consent. Your family may have to go to court to get a guardianship or power of attorney established on your behalf. That usually requires legal documents, court hearings and more. It can be especially complex if your family can’t agree on who should fill that role. Some advanced planning can eliminate the confusion. A power of attorney is a document that designates another individual as your decision-maker in the event you become incapacitated. That way you know who will be making decisions on your behalf, and you can communicate your wishes to that person. Personal The personal impact of incapacitation may be the most significant cost. Incapacitation is usually a traumatic time for a family. Your loved ones may be struggling with the emotions around the situation, along with the logistics, costs and more. It’s possible that your family members may not agree on the best course of treatment or how your finances should be managed. Multiple people may feel that they should be in charge. Because the issue is already emotional, it’s not difficult for these conflicts to become heated. Probably the last thing you want is for your loved ones to fight or argue because of your health issues. Incapacitation planning can minimize this risk and provide clear instructions to your loved ones. That way they can spend less time arguing about decisions and more time supporting you and one another. Ready to develop your incapacitation plan? Let’s talk about it. Contact us today at Humphrey Financial. We can help you analyze your needs and 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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