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It’s the giving season. Are you planning to make a donation to your favorite charity this holiday season? If so, you have company. More than 60% of Americans make some type of charitable donation in the last two weeks of the year. The post popular charities are churches, organizations that serve the poor, and children’s charities.1
Regardless of what charity you choose to support, the end of the year is a perfect time to make a donation. You help your favorite charity build their financial reserves for the upcoming year and you may even be able to realize a tax deduction. A cash donation may seem like the obvious way to support your charity, but it’s not your only option. You can also use life insurance to make a donation. If you have a life insurance policy you no longer need or if you are in the market for life insurance, below are a few ways you can use your policy to help the charity of your choice: Name the charity as a beneficiary. One of the easiest ways to use life insurance to support a charity is to name the charity as a beneficiary on the policy. You can name them the sole beneficiary or partial beneficiary. You simply fill out a beneficiary change form with your carrier. When you pass away, the charity files their beneficiary claim and receives their share of the death benefit. This type of donation can be advantageous because it’s convenient and because it doesn’t require a cash donation today. The charity doesn’t receive the money until some point in the future when you pass away. Just be sure to let the charity know that you have named them as a beneficiary. If you don’t, they may not know that they need to file a beneficiary claim upon your passing. Transfer the policy to the charity. You can also transfer ownership of the policy to the charity. In this instance, the charity becomes the new policy owner and usually, the new beneficiary as well. They receive the death benefit when you pass away, but they also assume full control of the policy. For example, the charity controls the cash value. They can withdraw cash from the policy or even take dividends or interest as distributions. They can change the beneficiaries on the policy. They can even surrender the policy and take the cash value as a distribution if they want. If you don’t want to relinquish all control of the policy to the charity, this probably isn’t a good option. However, if you truly don’t have any use for the policy, you may want to consider it. You may even be able to deduct the value of your paid premiums and all future premiums. Use a charitable rider. Some life insurance companies offer a charitable rider. This is an optional feature in which the insurance company automatically pays a small portion of the death benefit to the charity of your choice upon your death. In many cases, these riders have no cost. This could be a good option if you want to leave a modest amount to a charity. The charity isn’t named as a beneficiary, so your other beneficiaries may not even know that the charity was included in your death benefit. You also don’t have to worry about the charity forgetting to file a claim. The insurer automatically makes the donation. Donate your interest or dividends. If you have a permanent life insurance policy, you may receive annual payments from the insurer. On whole life policies, these payments come in the form of dividends. On universal life policies, the payments are interest. You can donate your annual interest or dividends to the charity of your choice. They can then use those funds as they see fit. You may even be able to deduct the donation from your taxes. Ready to review your life insurance strategy? Let’s talk about it. Contact us today at Cornerstone Financial. We can help you review your protection and find the right plan for your needs. Let’s connect soon and start the conversation. 1https://www.worldvision.org/about-us/media-center/survey-majority-americans-donate-charity-end-december 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. 19505 - 2019/11/21
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It’s hard to believe we’re already nearing the end of 2019. This year has flown by and 2020 is almost upon us. If you’re like many people, you use the end of the year to evaluate the past and make resolutions for the future. Your financial strategy might be included in those resolutions.
This year has been a rollercoaster for many investors. While the markets have moved higher and hit new record levels, that growth hasn’t come without a few bumps. Through November 20, the S&P 500 has increased by 24% year-to-date. However, the index also experienced several sharp downturns, especially through the summer.1 If you’re approaching retirement, you may not have the same comfort level for risk that you once did. This may be the time to review your retirement strategy and implement changes that can reduce your risk exposure. Below are a couple of steps to consider as you make your 2020 financial resolutions: Protect yourself from risk. Are you less comfortable with risk and volatility than you were in your younger years? That’s natural. Many people become more risk-averse as they approach retirement. After all, you don’t have as much time as you once did to recover from a market loss. There are a few steps you can take to reduce your exposure to risk. One is to review your allocation and risk tolerance and make sure they’re aligned. Your risk tolerance is your specific comfort level with market volatility. It’s based on your unique needs, goals, and time horizon. As you get older, your risk tolerance may change, so it’s important that your strategy changes along with it. You could shift your strategy to more conservative assets that have less exposure to risk and volatility. You could also utilize financial vehicles that offer growth potential without the chance of downside loss. A financial professional can help you identify strategies that can reduce your risk exposure. Guarantee* your income. Income planning is one of the most important elements of any retirement strategy. Generally, the goal is to generate enough income to cover your expenses so you don’t drain your retirement savings. If you have to withdraw too much money from your savings in the early years of your retirement, you may not have assets left in the later years. Fortunately, you’ll likely receive at least one source of income that’s guaranteed* for life from Social Security. You also may be fortunate enough to receive a defined benefit pension. You can also take steps to convert a portion of your retirement savings into a guaranteed* income stream. There are a number of different financial vehicles available that can be used to create a source of income that is guaranteed* for life, no matter how the market performs or how long you live. You could reduce your risk and protect your financial future by guaranteeing* a portion of your income in retirement. If you’re nearing retirement and haven’t explored options for guaranteed* income, you may want to take that step in 2020. Ready to get back on track for retirement in 2020? Let’s talk about it. Contact us today at Cornerstone Financial. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation. 1https://www.marketwatch.com/investing/index/spx *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. 19504 - 2019/11/21 |
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