Monthly Archives: September 2018

Let’s look at making the case for life insurance. Life insurance isn’t about YOU. It is about your loved ones. When a spouse/partner dies unexpectedly, many times their loss is catastrophic to their family’s financial stability. Many households are two income families; the sudden loss of one’s income can be insurmountable for their family to overcome. No one ever wants to talk about the need for life insurance. It is an uncomfortable subject and most people view it as “the only purchase I hope I never need”. Unfortunately, the reality is by the time one realizes they or their partner should have purchased life insurance, it is often too late.

Making the Case for Life Insurance – Objections

One of the objections I hear often is “We are young and healthy, I do not see a need for it right now”. Wrong. The best time to look at purchasing insurance is when you do not have any medical issues. Once you receive a serious medical diagnosis, it can be very difficult and sometimes even impossible to secure coverage for yourself. Rates are also much more favorable for a younger, healthy person. Another response I hear often is “but I have coverage through my employer, why do I need my own policy” Unless you can guarantee that you will work for your current job until you either die or no longer need insurance, you are taking a gamble that you will have coverage when it is needed. 

Making the Case for Life Insurance – Types

There are different types of insurance that offer different benefits and purpose. Some will simply provide a death benefit for a specific dollar amount and are guaranteed for a set number of years. Their payments are typically fixed for the duration of the contract. There are other insurances that can provide coverage “for life”. The premiums may be fixed or variable, depending on the specific coverage you are looking for. Some contracts are strictly designed to provide a death benefit, while others have cash value benefits as well.

Making the Case for Life Insurance – Expertise

 It is important to sit down with an insurance professional who can help you determine how much coverage you should consider having and what type of insurance would best suit your specific needs. At Victory, we use a specialized program that helps our clients determine how much life insurance they should consider purchasing based upon their current needs and lifestyle. It is important to be well informed of your needs so you can properly protect your family for years to come.

People always ask me “How Much Should I Contribute to My 401K?”, but many Americans are still not contributing anything to their company’s 401k plan. Of the employees who actually have access to a company sponsored retirement plan (only about 55% currently contribute) about 35% of these are still not contributing anything at all to their retirement. The grim reality is that for most, the only savings they will have at retirement will come from a company sponsored retirement plan. Those who do contribute are probably significantly underfunded. Many Americans have no idea how to even begin to project what current deferral rates they should be targeting.

So How Much Should I Contribute to My 401K?

A good rule of thumb for anyone to use is saving 10% of salary for 30 years. However, most employees are still living paycheck to paycheck, making 10% off the table, at least to get started. What should you do? I recommend to my clients to start off with ANY AMOUNT POSSIBLE to at least get themselves into the plan. Most people say if they never see it, they do not even miss it out of their check. If you are contributing to a tax deferred account (like a 401k, SIMPLE IRA or SEP) remember that your check is taxed AFTER your deferral so you will be missing less than the amount you are saving.

If your employer offers a match and you are not maximizing that, you are literally leaving money on the table that your employer is trying to give you for retirement. Once you start saving for retirement, the next goal is to defer just 1% more than the year before until you hit the 10% goal (or possibly more depending how close you are to retirement and how underfunded you are). 1% more each year can have a significant impact on your retirement balance at retirement.

Example:
An employee who earns $15 per hour during a 40 hour work week could save an additional $30,714 over 30 years by just increasing their deferral rate by 1% more each year. It is noteworthy that this 1% would amount to about $9.60 per bi-weekly pay going into their retirement account. That is just a few coffees or a pack of cigarettes!

Saving for retirement does not have to mean a huge change in habits, just a commitment to making small but powerful changes over time. We can offer you a complimentary full scope review to determine if you are currently underfunded for retirement. We will help you develop a plan to get back on track by using our retirement readiness program.

– Ashley Rosser AIF