Wealthcare Financial - Florida Financial Advisors

Wealthcare » Archives for September 18, 2021

Archives for September 18, 2021

Finding The Right Insurance Plan

by

Whether it’s life insurance, disability income or long-term-care insurance, we can provide you with feasible options that will provide security for your family.

Life Insurance

Life insurance is something to add to your financial plan if you’re interested in providing a measure of security for those dear to you. Life insurance is the exchange of a relatively small payment each month a premium — for a very large amount of money if you die — a death benefit. This is the main value offered by all sorts of life insurance, and it ensures everyone you care about has financial resources

Term life insurance

Term Life Insurance is a type of insurance that provides coverage for a set period, typically from 10 – 30 years. If you die within the term, the insurance company will pay out the death benefit to your beneficiaries. Term Life insurance is the simplest and most cost effective form of Life insurance.

Whole life insurance

Whole Life Insurance is a permanent life insurance that will not expire if premiums are being paid. Unlike Term Life Insurance, Whole Life offers a savings component that will build cash value over the life of the policy, as well as offering annual dividend payments which can act similarly to an investment account but is uncorrelated to the returns of the market. You can have fully paid-up Whole Life policy which will require no additional premiums. Examples are, 10 pay, 20 pay, and paid up at age 65.

Universal life insurance

Universal life (UL) insurance is a form of permanent life insurance with an investment savings element based on market interest rates. This type of insurance provides more flexibility than other types of insurance policies where the policy holder can adjust their premiums and death benefits.

Variable life insurance

Simplified issue life insurance

Simplified issue means an easier form of underwriting when applying for Life Insurance. Applicants must answer some questions about their health and lifestyle but do not have to take a medical exam. This policy may work well with people who aren’t in excellent health and wouldn’t qualify for the lowest rate with traditional underwriting

Joint life insurance

Life insurance policy for two people – typically spouses or domestic partners – but it only pays a benefit when one of them dies. Joint coverage often tends to be less expensive and can be a term or permanent policy.

Disability Insurance

When individuals think about disability insurance the first thing that comes to mind is a car accident. In fact, about 91% of disabilities are caused by illness and 9% is caused by an accident of some sort. The term disability insurance refers to a policy that provides income to individuals who can no longer work because of a disability. With the average long-term disability claim just under 3 years a disability policy will help protect you from draining your savings or retirement assets.

Long-Term disability insurance

Long term disability insurance replaces part of your income each month if a serious injury or illness prevents you from working. It’s the best way to stay on track with your finances while you focus on your recovery. Long term disability insurance is the most cost-effective way for healthy, employed individuals who want to secure their financial future. The two most common ways you can be covered is, either individually owning a disability policy or being a part of a group disability plan at your workplace.

Total disability insurance types

This phrase is used in the insurance industry and law to determine that a person is unable to work in their own or any occupation due to a sickness or injury. Most insurance companies will pay the full benefit to an individual when they are no longer able to work again.

Any occupation

An any-occupation policy is a type of disability insurance that provides coverage for when the insured is unable to work in a job suitable for them based on education, experience, and age. If you’re still able to work even in a lower paying job, an any-occupation policy will not pay benefits. This is different from own occupation coverage.

Own Occupation

An own-occupation insurance is a benefit that’s added to your disability insurance policy. This benefit will cover individuals who become disabled and are unable to perform most of the occupational duties that they have been trained to perform. The own-occupation benefit is highly recommended for all MD’s/DO’s, attorney’s and dentists. As an example, if you’re surgeon who can no longer perform surgery you can still collect your disability payment and work outside of being a surgeon collecting an income. This makes it ok, to collect both incomes by having the own-occupation benefit on your disability policy.

Short-Term disability insurance

This insurance is typically provided through work and is intended to cover you for a short period of time following an illness or injury that keeps you out of work. While policies vary, short term disability insurance typically covers you for a term between 3-6 months. This type of insurance is typically sought out by individuals going on maternity leave as some policies will pay a benefit while you are out of work.

Social Security disability insurance

Social Security Disability Insurance is a payroll tax-funded federal insurance program of the United States government. It provides monthly benefits to people who have a medically determinable disability that restricts their ability to be employed. The benefit is calculated based on yearly wages or self-employment income.

Private or supplemental disability insurance

Typically offered by an employer, Supplemental disability insurance is a standalone policy you can buy to fill gaps in your existing disability coverage. You can use it to supplement an individual disability insurance, Social Security Disability Insurance (SSDI), or group disability insurance through your employer.

Student Loan Disability Insurance

Student Loan Disability Insurance is a type of benefit that’s added to a policy meant to specifically cover some or all your student loan payments if you can’t work due to illness or injury.

Business Overhead Expense Disability

Business Overhead Expense Disability pays a benefit to your business should you — the owner — become disabled and can’t work. The business can use the money to meet its day-to-day expenses such as paying salaries, utility bills, debts, rent or mortgage.

Workers Compensation

It covers any occupational sickness or accident arising during employment that results in incurring medical expenses and loss of wages regardless of fault.

Long Term Care Insurance

Long term care insurance provides nursing-home care, home health care, and personal or adult day care in the event of a chronic medical condition or disabling condition that needs supervision. Long term care insurance is crucial since the cost of care is expensive and costs are only increasing. This type of insurance is worth it because it will allow you to live in your home longer.

What is disability insurance?

Disability insurance means being able to meet your financial obligations in case you’re unable to work due to a qualifying disability. The three types of disability insurance are Long Term Disability (LTD), Short Term Disability (STDI) and Social Security Disability (SSDI).

What does disability insurance cover?

Disability insurance is designed to replace a percentage of your income if you can no longer work because of an accident, injury, illness, and/or disability. This will help you cover any household expenses, paying bills and providing for your family.

How much is disability insurance?

Disability insurance is designed to replace a percentage of your income if you can no longer work because of an accident, injury, illness, and/or disability. This will help you cover any household expenses, paying bills and providing for your family.

How much disability insurance do I need?

The amount of disability insurance needed should be enough to cover your monthly expenses and any outstanding debts. The maximum disability amount issued by an insurance company is roughly 60% of your income. The average cost of disability insurance is typically between 1 percent and 3 percent of your annual income.

What does life insurance cover?

Life insurance pays a death benefit to the insured’s beneficiaries. Typically, an individual will cover his or her own life to protect their family interests in case they were to pass.

Retirement Planning Services

by

Have questions or need assistance setting up a 401(k), 403(b), or IRA? We have utilized these services for years and set up our clients with the ideal option that fits their retirement goals.

Defined contribution plans (DC)

A defined contribution plan is an employer-sponsored retirement plan where the employee elects how much they want to contribute per pay basis. An employer can choose to contribute to this type of plan, which is often referred to as a match. Two popular types of these plans are 401(k) and 403(b). This plan works best for accumulation, and we always recommend reviewing the investment strategy and tax diversification that the plan offers.

401(k) plans

A 401(k)-retirement plan is an employer-sponsored defined contribution plan that allows eligible employees the ability to save and invest for retirement. Most individuals use this plan to defer taxes on the money they contribute. Depending on your situation, we recommend the Roth 401(k) as an after-tax investment that will be tax-free upon distribution.

403(b) plans

A 403(b) is a retirement plan similar to a 401(k), but for certain employees of public schools, nurses, and non-profit organizations. This is also payroll deducted, and usually, it offers a Roth option for tax-free growth. We always recommend reviewing the fees and expense ratios of this plan.

457(b) plans

457(b) plans are non-qualified, tax-advantaged, deferred compensation retirement plans usually offered by the government and some nonprofit employers. This type of plan offers benefits such as no tax penalties on qualified withdrawals and better catchup provisions.

IRA plans

An IRA is individually owned that allows an individual to save for retirement with tax-free growth or on a tax-deferred basis. IRAs are one of the most effective ways to save and invest in your future. We recommend reviewing both traditional and Roth IRA options to determine which one is right for you.

Traditional IRA

In a Traditional IRA, you make contributions with money you may be able to deduct on your tax return, and any earnings can grow tax-deferred until you withdraw them in retirement. Depending on your adjusted growth income, you might not qualify for the tax deduction.

Roth IRA

With a Roth IRA, you make contributions with money you’ve already paid taxes on (after tax), and your money may potentially grow tax-free, with tax-free withdrawals in retirement. Like a Traditional IRA, depending on your adjusted growth income, you might not be able to contribute to a Roth IRA.

Spousal IRA

A Spousal IRA is a strategy in which a working spouse can contribute to an IRA in the name of a spouse that is not working or has little income. It is a good way to increase your retirement savings in case your household only has one source of income. You must be married and filing jointly to participate in this plan.

Rollover IRA

A Rollover IRA is an account that allows you to move funds from your old employer-sponsored retirement plan (403(b), 401(k)) into an IRA. With an IRA rollover, you can preserve the tax-deferred status of your retirement assets without paying current taxes or early withdrawal penalties at the transfer time. Moving your plan into your own IRA will increase investment options and can potentially reduce fees.

SEP IRA

A Simplified Employee Pension (SEP) plan provides business owners with a simplified method to contribute toward their employees’ retirement and retirement savings in an IRA. This might not be the best choice for business owners with employees as the owner is required to make proportional contributions for each eligible employee if you contribute for yourself.

Simple IRA

A SIMPLE IRA is a retirement savings plan that most small businesses with 100 or fewer employees can use. It is ideal for small business owners who don’t want the fiduciary responsibilities that come with a qualified plan. Employers must contribute a match to this plan at a minimum of 1% and a maximum of 3% of the employee’s salary.

Solo 401(k) plan

Solo 401(k) is a retirement account similar to a 401(k) but designed for the self-employed or business owner with no full-time employees. The contribution limits are significantly high, but to take full advantage of this plan, you must provide proof of self-employment income.

Traditional pensions

A Traditional Pension Plan is a defined benefit plan that provides fixed, monthly lifetime retirement benefits. Pension plans are typically calculated using income and years of service to determine your monthly payout amount. Unfortunately, today not many employers are offering pension plans, so if you’re looking into a new job or career path, it might be worth considering whether a pension is important to you.

Guaranteed income annuities (GIAs)

An income annuity is designed to provide a guaranteed income stream that can help protect against the risk of outliving your savings. The payments will continue for as long as you live, and they’re not subject to stock market performance so regardless of the ups and downs of the financial markets, the amount is set in place.

The Federal Thrift Savings Plan (TSP)

The Thrift Savings Plan, also known as TSP, is a type of retirement plan only offered to federal employees and members of the uniformed services. This plan is a defined contribution plan which is like a 401(k), that is available to workers in the private sector.

Cash-balance plans

A cash balance plan is a type of pension plan that allows for larger contributions with larger deductions. The plan offers guaranteed pension benefits with unique incentives to attract and retain employees. Also, it’s less difficult and expensive to maintain than other plans.

Cash-value life insurance plan

Cash value life insurance is a form of permanent life insurance which has many benefits for the policyholder, including a cash value savings component. The tax-advantaged cash value is available to the policyholder for many purposes, such as a source of loans, cash or to pay policy premiums.

Nonqualified deferred compensation plans (NQDC)

A non-qualified deferred compensation (NQDC) plan typically allows employees to put a portion of their earned wages, bonuses, or other compensation into a trust, which grows tax-deferred. This provides income in the future and may reduce the tax payable on the income.

Common Retirement Questions

How does retirement work?

How much should be saved for retirement?

Depending on your income, aim to save at least 15% – 20% of your income each year for retirement. Most experts agree that your retirement income should be about 80% of your final pre-retirement annual income.

What is a qualified retirement plan?

A qualified retirement plan is designed to provide you with income at retirement. The most common qualified plans are 401(k), 403(b), profit sharing, and Pension Plans.

What is early retirement?

The common definition of early retirement is any age before 59-1/2, mainly because that’s when you can access your 401(k) or IRA’s without any IRS penalties.

What is the Florida retirement system?

Also known as the FRS, you must be employed by the state or local government participating in the Florida Retirement System. To its employees, they offer two retirement options: The FRS Pension Plan and the FRS Investment Plan.

What is the retirement age in Florida?

There’s no set retirement age. If you save and plan properly, you can retire at your desired age. These are the ages that are most important to retirees. At 59 ½, you can now withdraw money from your qualified retirement account without an IRS penalty. Social Security starts at age 62, and Medicare starts at age 65.

How long $1mm last in retirement?

A recent study determined that a $1 million retirement nest egg will last about 19 years on average. To avoid running out of money in retirement, you should pull no more than 4% of your assets annually. If you have $1mm, you should only withdraw $40,000/yr.

Retirement Guides and News