Insurable Interest Canadian Insurance Blog

Now, you can see what assets are left and create a plan to mitigate or eliminate future tax burdens. Include: Reducing RMDs (required minimum distributions): Explore options to minimize tax liabilities associated with distributions from retirement accounts. Roth conversions: Convert traditional IRA assets to Roth IRAs strategically to manage tax obligations. Investment location optimization: Allocate investments across taxable, tax-deferred, and tax-exempt accounts for tax efficiency. Estate planning: Utilize tax-efficient strategies to transfer wealth to heirs and minimize estate taxes. Proactive tax planning maximizes retirement income and preserves assets for future generations. Step 4: Legacy and Gifting Planning for the transfer of wealth and leaving a legacy involves thoughtful consideration! Steps 3 and 4 go hand in hand. How can we reduce taxes and pass money to their heirs and charities in the most efficient way? Gifting strategies: Determine when and how to gift assets to heirs or charitable organizations. Trusts: Establish trusts to manage and distribute assets according to specific wishes. Life insurance in estate planning: Use life insurance policies to provide liquidity for estate taxes or as a means to transfer wealth efficiently. Charitable giving: Explore charitable trusts or foundations as a tax-efficient way to support philanthropic causes. By addressing tax planning, legacy, and gifting early on...

What You Need to Know Many owners over 60 have no idea about how to retire. One problem: What would happen to their company? Another problem: The best workers are leaving for employers with retirement plans. Growing up, I watched my father, a former Mexican migrant worker, work hard to create a thriving business from nothing. This experience left me with an appreciation for the many hats hard-working business owners must wear to address the variety of challenges they face. I also learned that business owners can’t do it alone. While they are likely skilled at running the business they built, they often need assistance from experts who can bring specialized solutions to address opportunities that go beyond day-to-day operations. Today, many American business owners have concerns about the state of the American economy according to a new survey from the Nationwide Retirement Institute, which sheds light on what’s keeping them up at night — and opportunities for financial professionals to step in with specialized solutions to address some of their biggest challenges. The majority of small business owners (72%) and mid-market business owners (51%) rate the current condition of the U.S. economy overall as ‘poor’ or ‘fair.’ It’s not...

In other words, the policies will die before the insureds! Choices While retirement income planning frequently targets funding only to 90 or 95, there are many opportunities along the way to adjust the plan based on the health of the individual as they age. Retirement planners have many levers that can be pulled to adjust the plan, such as: working longer, saving more, lowering spending and investing more aggressively. Additionally, some income sources like Social Security, pensions and life annuities continue regardless and represent some floor level of income no matter how long one lives. An underfunded life insurance policy offers little flexibility in planning, while an overfunded policy offers a lot. If an insured’s health deteriorates to such an extent that longevity is unlikely, the ongoing premium amount can be reduced accordingly. But for an underfunded policy, when the realization hits that the policy is underfunded due to the insured’s good health and longevity, the additional premium required may well be unaffordable. Additionally, if the policy is, in fact, no longer wanted or needed, the well-funded policy will likely have greater potential value on the life settlement market. How much does it cost to fund a policy on a...

What You Need to Know Survey participants came from households with annual income between $50,000 and $199,000. A quarter envision doing some form of paid work in retirement. Only 15% of middle-class savers have annuities, and 34% have life insurance. Only a fifth of middle-class Americans say they are very confident in their ability to fully retire or maintain a comfortable lifestyle throughout their retirement, according to a new study from the nonprofit Transamerica Center for Retirement Studies in collaboration with Transamerica Institute. The study broadly defines the middle class as people with an annual household income between $50,000 and $199,000. “The middle class symbolizes the American dream,” Catherine Collinson, chief executive and president of Transamerica Institute and TCRS, said in a statement. “In today’s chaotic environment, what are the middle class’s hopes, dreams and retirement prospects? What support is needed from policymakers to help ensure they can retire with dignity? Our new report seeks to answer these pressing questions.” The Harris Poll conducted an online survey on behalf of Transamerica Institute and TCRS between Sept. 14 and Oct. 23 among a nationally representative sample of 10,002 adults, including 5,726 with a household income between $50,000 and $199,999.  Middle-Class Finances...