​The coronavirus pandemic is impacting every corner of American life and most sectors of the economy. For the life insurance industry, the pandemic presents a two-sided threat. In many cases the fallout is being passed onto potential life insurance buyers.
 
The risks for life insurance companies are twofold. On one hand, the epidemic presents heightened mortality risk for insurers, especially among older policyholders and those with existing medical conditions.
 
On the other hand, the financial fallout from the pandemic has driven many people to a more stable asset, which has pushed the yields for 10-year treasuries down to less than 1%. That’s problematic for life insurance companies because they traditionally invest 70% of their assets in long-term bonds and treasuries.1
 
With life insurers facing lower returns and greater risk, they’re changing their offerings. Penn Mutual Life Insurance has stopped selling policies to those 70 and older and those in poor health. Prudential has raised premiums and halted sales of 30-year term policies. Other insurers are limiting their sales of certain types of policies, particularly universal life policies that have guaranteed* death benefits and interest rates.1
 
If you have a need for life insurance or estate planning protection, what are your options? Below are a few steps to consider:

​If you can’t get the life insurance policy you need right now, it’s even more important that your estate planning strategy is appropriate for your needs. A will can help you direct assets to the right beneficiaries after your passing. More advanced tools, like a trust, can reduce taxes, probate costs, and other expenses so you can maximize your legacy for your loved ones. A financial professional can help you develop your legacy strategy.

​Life insurance isn’t the only asset that you can pass to beneficiaries. Your 401(k), IRA, annuities, and other qualified accounts all have beneficiary designations. Of course, those designations have to be correct for the assets to go to the correct person.
 
Now is a good time to review those designations and make sure they’re up to date. It’s common for people to forget to remove a former spouse or forget to add a new child to a beneficiary account. If you pass away, it may be too late to correct the mistake after you’re gone.
 
This also may be a good time to find ways to maximize these accounts. For example, if you have a traditional IRA, you may want to consider a conversion to a Roth. This strategy isn’t right for everyone, but it could potentially help you pass on those Roth assets to your beneficiaries tax-free, maximizing your legacy.

Life insurance companies may be tightening their rules and guidelines, but policies are still available. A financial professional can analyze options from a variety of carriers to find the policy that is best for your needs and your budget. They can also help you determine exactly how much coverage and what kind of policy is right for you.
 
Ready to implement a strategy for your legacy needs? Let’s talk about it. Contact us today at Cornerstone Financial Associates. We can help you analyze your goals and develop a plan. Let’s connect soon and start the conversation.
 
1https://www.wsj.com/articles/some-americans-are-being-turned-away-trying-to-buy-life-insurance-11589103002
 
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.
 
*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. 20096 - 2020/5/19

​The economic fallout from the coronavirus pandemic continues, even as states start to reopen restaurants, retail stores, and other businesses. The crisis brought an end to the bull market that started in 2009 and threatens to usher in a recession.1
 
What does the future hold for the stock market and the economy? When will the economy recover? And how will this crisis impact your retirement and your financial future?
 
It’s impossible to definitively answer those questions. In many ways, this event is unprecedented. We don’t know how long the virus will present a threat, so it’s impossible to predict how or when the economy may recover.
 
However, it is possible to make adjustments to your strategy to minimize risk and take advantage of potential opportunities. It’s also helpful to keep in mind the long-term nature of the economy and the financial markets. Nothing lasts forever, including recessions and bear markets

 The financial markets have been a rollercoaster since the onset of the pandemic. On February 19, the S&P 500 closed at 3386. On March 23, it closed at 2237, a drop of 33.93%. Since that time, the market S&P has climbed to 2863 as of May 15.2
 
It’s important to remember that the stock market isn’t the same as the economy. A drop in the stock market doesn’t necessarily signal a recession, just like a rise doesn’t necessarily spell an economic recovery.
 
It’s also helpful to remember that bear markets are a natural part of investing. They aren’t always caused by global pandemics, but they do happen. There have been 16 bear markets since 1926. On average, they last 22 months and are followed by a 47% gain in the year following the market’s lowpoint.3 We can’t predict when the market will hit its low point, or if it already has, but if history is any guide, the market will recover at some point. 

While the stock market has bounced back somewhat since its March decline, the overall economic news continues to be negative. More than 36 million people have filed for unemployment since late March. In 11 states, more than a quarter of the workforce is unemployed.4
 
In the first quarter, the economy contracted for the first time since the 2008 financial crisis. GDP declined by an annualized rate of 4.8%. That’s not as steep as the GDP decline of 8.4% annualized decline in 2008. However, it’s possible the economy could face a greater decline in the second quarter. Consumer spending, which accounts for 70% of GDP, fell by an annualized rate of 7.6% in the first quarter. That’s the steepest drop for that metric since 1980.5
 
While states may be starting the reopen process, there is still significant uncertainty surrounding the crisis and the economy’s future. The good news is you can take action to minimize risk. Contact us today at Cornerstone Financial Associates. We can help you analyze your goals and needs and implement a strategy. Let’s connect today and start the conversation.
 
1https://www.cnn.com/2020/03/11/investing/bear-market-stocks-recession/index.html
2https://www.google.com/search?safe=off&tbm=fin&sxsrf=ALeKk01UjyvpIcf62vDAgyulZ3dZuL1GWg:1589832165005&q=INDEXSP:+.INX&stick=H4sIAAAAAAAAAONgecRowi3w8sc9YSntSWtOXmNU5eIKzsgvd80rySypFBLnYoOyeKW4uTj1c_UNDM0qi4t5FrHyevq5uEYEB1gp6Hn6RQAAItD1MEkAAAA&sa=X&ved=2ahUKEwikycWrmr7pAhWWU80KHfhUBrcQlq4CMAB6BAgBEAE&biw=1536&bih=754&dpr=1.25#scso=_JerCXv0o9o70_A-NwLLYBg1:0
3https://www.fidelity.com/viewpoints/market-and-economic-insights/bear-markets-the-business-cycle-explained
4https://www.nytimes.com/2020/05/14/business/economy/coronavirus-unemployment-claims.html
5https://www.npr.org/sections/coronavirus-live-updates/2020/04/29/847468328/tip-of-the-iceberg-economy-likely-shrank-but-worst-to-come
 
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. 20093 - 2020/5/19

What’s your strategy for retirement? Is it based on your unique needs and goals? Or is it based on general ideas and conventional retirement wisdom?
 
There are plenty of “experts” online offering retirement wisdom for the masses. In fact, if you search “retirement” on Google, you’ll find more than 880 million results with retirement tips and strategies.
 
The problem with retirement advice for the masses is that it’s not customized to your unique goals. There are plenty of pieces of conventional retirement wisdom that aren’t right for every person or situation. Below are two examples of common retirement income rules and tips that may not be right for you:

You should plan on taking 4% withdrawals from your savings to fund your retirement. 

There are many “back-of-the-napkin” formulas meant to simplify retirement planning. One of the most common is the idea that you can take 4% of your assets as income in retirement. The idea is that if you withdraw 4% each year, your assets will last at least 25 years.
 
There are a few problems with this idea. The first is that not everyone will spend money the same way in retirement. You may want to travel or pursue other activities in the early years of retirement. Some people may need to provide support to children or grandchildren. And some will face costly healthcare issues. Not everyone’s spending is the same.
 
This rule also doesn’t account for inflation. It’s unlikely that your spending will stay the same year after year, making it unlikely that you can take the same withdrawal each year.
 
A better approach is to develop a custom budget and spending plan and then implement a strategy to meet your income needs. You also may want to consider financial vehicles like annuities that can provide guaranteed* income to help you meet your goal.
​
You will spend less in retirement than you do now. 

Another common piece of retirement advice is that your spending will go down after you retire. Perhaps you’ve heard the idea to plan on spending 80% of your current spending in retirement.
 
Again, the problem with this advice is that your spending will differ from others. Many retirees see their spending increase after they stop working. They fill their free time with travel, shopping, dining out, and other activities that cost money. In the later years of retirement, you could see your medical expenses rise as you face healthcare issues.
 
You may see your spending in certain areas decline after retirement, but that doesn’t mean your overall spending will go down. Consider building a retirement budget that is specific to your goals and your plans. That will give you a better idea of how much you may spend in retirement.
 
Ready to develop a retirement income plan that is specific to your needs and goals? Let’s talk about it. Contact us today at Cornerstone Financial Associates. We can help you estimate your income need and implement a strategy. Let’s connect soon and start the conversation.
 
 
 
*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. 20024 - 2020/4/22

You may see a new figure on your 401(k) statement soon. In December of last year, President Trump signed the SECURE Act, which stands for Setting Up Every Community for Retirement Enhancement. The bill’s goal was to make it easier for Americans to save for retirement.
 
One of the provisions in the bill changes the way 401(k) administrators report account balances to participants. At some point soon, your statement will not only include your account’s balance, investment performance, and other traditional information, but it will also include a projection of your future monthly income.
 
The change is designed to give you another perspective on your progress toward retirement. It’s often difficult to estimate your readiness by looking at a lump sum amount. However, if that lump sum is translated into monthly income, you may get a better idea of whether you’re on track to meet your goals.If you aren’t on track, the good news is you can take action. Below are two steps you can take to enhance your retirement income:

Increase your contributions. 

In 2020, you can contribute up to $19,500 to your 401(k). If you are age 50 or older, you can contribute an additional $6,500, bringing your total potential contribution to $26,000.1
 
Of course, you may not be able to contribute that much this year. Even a modest increase can have an impact on your savings and your future retirement income. One strategy is to gradually increase your contributions over time. Start by increasing your contribution by 1% each year. Eventually, you’ll be contributing the maximum amount.

Guarantee your income. 

Another strategy you could implement is to strategize with products that provide guaranteed income in retirement. The SECURE Act makes it easier for 401(k) plans to offer annuities as a strategy option. These vehicles often provide guarantees on retirement income.
 
For example, you may be guaranteed to withdraw a certain amount of income for life, regardless of how the markets perform or how long you live. That could help you minimize risk and protect your cash flow in retirement.
 
Ready to boost your retirement income? Let’s talk about it. Contact us today at Cornerstone Financial Associates. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
 
1https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500
 
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. 20021 - 2020/4/22
 
 
Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.  Annuities are long-term, tax-deferred vehicles designed for retirement and contain some limitations.

Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC.

Thinking of launching your next career after you retire? You’re not alone. The phenomenon has become so common that it’s inspired its own name - the “second act.”
 
Over the past three decades, the amount of people working past age 65 has doubled. Nearly 20 percent of adults over age 65 work in some capacity. By 2024, the Bureau of Labor Statistics expects 13 million people in that age group to be in the workforce.1
 
Some of those individuals are working because they need to financially. However, others are doing it because they’re simply not ready to retire, at least in the traditional sense. Fidelity estimates that the average 65-year-old man will live to age 87, and the average woman will live to 89. That’s more than two decades in retirement for many people, which could be plenty of time to have a fulfilling second career.2
 
In order to launch a successful second act, though, you’ll need to have a stable financial foundation. Below are a few tips to make sure you’re on solid ground before you start the next chapter:
 
Take care of healthcare.
 
Often in a second act, the reward is personal fulfillment, not necessarily financial compensation. While you may get compensated for your time, it’s possible that your new career may not come with benefits like health insurance.
 
Fortunately, if you prepare in advance, you may not need health insurance from your new pursuit. Start by estimating your healthcare needs. You become eligible for Medicare at age 65. However, there are many different types of Medicare options, especially in Medicare Advantage. As you approach retirement, start exploring the different options and find the one that best aligns with your budget.
 
Also, consider out-of-pocket expenses. Many services and treatments aren’t covered by Medicare. Even those that are covered often require copays and deductibles. Fidelity estimates that the average 65-year-old couple will spend $285,000 out-of-pocket in retirement.3
 
You can prepare for health care costs by putting away money today. One effective way to do so is with a health savings account (HSA). You can make tax-deductible contributions to an HSA and then allocate the funds according to your needs and goals. All growth is tax-deferred, and withdrawals for medical expenses are tax-free. By having a solid healthcare plan in place, you can give yourself the freedom to find the role that is most fulfilling for you rather than the one that provides the best healthcare.

Guarantee your income. 

Again, this is about having the flexibility to find the role that is right for you without having to worry about financial issues. If you have sufficient income in retirement, you can focus on charting the path you want.
 
 You’ll likely get Social Security in retirement. Maybe you even have a defined benefit pension or other income sources. You also may have to rely on your savings to generate income.
 
However, there are risks associated with taking retirement income from your savings. What if you live longer than expected and run out of money? What if the market suffers a downturn and threatens your retirement income?
 
One way to minimize these risks is to create a guaranteed stream of income. You can use financial vehicles like an annuity to create additional sources of lifetime income, which could reduce risk and uncertainty in retirement. That certainty could give you the flexibility you need to pursue your second act.
 
Ready to prepare for your second act? Let’s talk about it. Contact us today at Cornerstone Financial Associates. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://www.aarp.org/work/employers/info-2019/americans-working-past-65.html
2https://www.fidelity.com/viewpoints/retirement/longevity
3https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/press-release/healthcare-price-check-040219.pdf
 
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. 19958 - 2020/3/31
​

Every two years, Fidelity releases its Retirement Savings Assessment, a deep analysis of Americans’ readiness for retirement. Overall, the 2020 report showed that Americans have improved their retirement readiness. As a whole, Americans are ready to replace 83% of the income they will need in retirement. That’s up from 62% in 2006.1
 
However, there was one group that hadn’t made positive progress. It’s Generation X. It’s easy to forget about Generation X amid the ongoing social media war between Baby Boomers and Millennials. While Generation X isn’t as sizable as those groups, it is still sizable with 66 million members between the ages of 39 and 54.2
 
According to the Fidelity assessment, Generation X’s readiness has actually declined in recent years. Generation X had a readiness score of 80, down from 83 in 2016. They were the only generation to decline in readiness.2
 
There are a few possible reasons for Generation X’s decline in readiness. One is that they lag other groups in savings rates. Generation X saves an average of 8% of annual income, while Boomers and Millennials save 10%. Generation X also more mortgage debt and personal debt than other generations.2
 
The good news is Generation X still has time to catch up. Even the oldest members of Gen X have a decade or more until retirement. Below are a few steps you can take to get back on track:
 
Increase your contributions. 

The simplest way to boost your retirement savings is to increase your contributions to your 401(k) and IRA. In 2020, you can contribute up to $19,500 to a 401(k) and up to $6,000 to an iRA.3
 
However, if you are 50 or older, you can contribute even more. Starting at age 50, you can make something called a “catch-up contribution,” which is simply an extra amount of money you can put in a qualified account each year. In 2020, you can contribute up to an additional $6,500 to a 401(k) and an additional $1,000 to an IRA.3
 
Even if you can’t contribute the maximum, it’s still helpful to increase your contributions. Try increasing by a small amount every year or even every six months. If you gradually increase your contributions over time, it may not put as much pressure on your budget.

Create a health care strategy. 

Saving more for retirement is always helpful, but you can also improve your retirement readiness by reducing future costs. One of the biggest costs you’ll face in retirement could be health care.
 
Fidelity estimates that the average 65-year-old couple will spend $285,000 out-of-pocket in retirement.4 That figure includes a wide range of costs, like deductibles, premiums, and expenses not covered by Medicare.
 
You can prepare for health care costs by putting away money today. One effective way to do so is with a health savings account (HSA). You can make tax-deductible contributions to an HSA and then allocate the funds according to your needs and goals. All growth is tax-deferred, and withdrawals for medical expenses are tax-free.
 
You can also protect yourself against excessive health care costs by investing in your health today. Stay active. Watch your diet. Get annual physicals and other preventive services. The healthier you are, the less care you’ll need, which will reduce your out-of-pocket costs.

Protect your income. 

For many people, the point of saving for retirement is to create income in the future. Yes, you will likely have income from Social Security and possibly a defined benefit pension. But if you’re like many Americans, you’ll have to generate much of your retirement income from your retirement savings.
 
How do you determine how much income to take each year? What if you live longer than expected and run out of money? What if you spend too much in the early years of retirement and don’t have enough left for the later years? What if the market suffers a downturn and threatens your retirement income?
 
One way to minimize these risks is to establish guaranteed streams of lifetime income. You can use retirement income vehicles like an annuity to create additional sources of lifetime income, which could potentially help reduce risk and uncertainty in retirement. A financial professional can help you determine if this is a good strategy for your needs.
 
Ready to take back control of your retirement? Let’s talk about it. Contact us today at Cornerstone Financial Associates. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://www.marketwatch.com/story/this-is-the-only-generation-less-prepared-for-retirement-than-they-were-even-two-years-ago-2020-01-30
2https://www.pewresearch.org/fact-tank/2018/03/01/millennials-overtake-baby-boomers/
3https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500
4https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/press-release/healthcare-price-check-040219.pdf
 
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. 19954 - 2020/3/30

​Do you have a retirement budget? A budget can be a powerful tool to help you manage your expenses and stay on-track to reach your biggest financial goals. If you don’t have a budget, you’re not alone. A recent study found that a third of all Americans don’t use a budget.1
 
Of course, a budget has to be accurate. If you forget to include certain expenses in your budget, it won’t be a very effective planning tool. That’s what makes it so hard to budget for retirement. You can’t predict the future, so how can you know what your expenses will be when you retire?
 
You may not be able to make a precise projection, but you can estimate your spending based on your goals, objectives, and current spending levels. Some expenses may be obvious, like groceries, utilities, housing, and more.
 
But not all retirement expenses are quite so easy to predict. In fact, there are a few potentially sizable expenses that may not even be on your radar. Below are a few such expenses. If you haven’t budgeted for these costs in retirement, now may be the time to do so.

Taxes 

That’s right. Just because you stop working doesn’t mean you’re done paying taxes. You could still face taxes in retirement on a wide range of income sources, including:

• Social Security
• Defined Benefit Pension benefits
• 401(k) distributions
• IRA distributions
• Annuity distributions
• Investment income
• Business income
• And more

 
You could also face property taxes, sales taxes, capital gains, and other forms of taxation. A financial professional can help you analyze your potential tax liability and build those costs into your retirement budget.

Health Care and Long-Term Care 

Think Medicare will cover all your health care costs in retirement? Think again. While Medicare is a valuable resource, it doesn’t cover every treatment. Even when something is covered by Medicare, the coverage is often partial. That means you’ll likely have copays and deductibles in addition to your monthly premiums.
 
In fact, Fidelity estimates the average retired couple will pay $285,000 out-of-pocket on premiums, deductibles, copays, and for services not covered by Medicare.2 Assume you live 25 years in retirement. That’s more than $10,000 per year in out-of-pocket healthcare costs.
 
That $285,000 doesn’t include a major health-related expenses - long-term care. Long-term care is ongoing assistance with daily living activities like cooking, bathing, getting dressed, and even basic mobility.
 
So how much will you spend on long-term care? It’s hard to say. The U.S. Department of Health and Human Services estimates that 70% of retirees will need long-term care at some point. However, there’s wide variance in just how much care each person will need. Twenty percent of seniors will need care for more than five years. A third of seniors will never need it at all.3
 
The average man is expected to need long-term care for 2.2 years, while the average woman needs it for 3.7 years.3 That care can come in many forms. It could be provided by a family member or a part-time caregiver. It could involve adult daycare. Or it could mean moving to assisted living or even a nursing facility.
 
Every year, Genworth studies average long-term care costs around the country. In 2019, the average monthly costs were as follows:
 
Adult Daycare - $1,625
Assisted Living - $4,051
Full-time Home Health Aide - $4,385
Private Nursing Home Room - $8,517
 
You can’t predict what kind of care you will need or how long you will need it. However, it’s easy to see how those costs can add up if you need months or years of support.

“Other” Housing Costs 

Will your mortgage be paid off before you retire? If so, that will likely free up a large chunk of cash in your budget. Even without a mortgage, though, you will still likely face housing costs like:

• Property taxes
• Homeowners insurance
• Repairs
• Maintenance

 
How much will these items cost you in retirement? It’s hard to say. The average homeowner spent $1,200 on insurance in 2019.4 They also spent an average of nearly $5,000 on repairs and maintenance.5 Of course, those figures depend on the size and value of your home. Downsizing is one possible way to keep these costs under control in retirement.

Inflation 

Possibly the most difficult cost to budget for is inflation. That’s the gradual increase in prices for goods and services. Inflation varies from year-to-year but is usually minimal. However, over time, even a minimal amount of inflation can significantly increase prices.
 
Does your retirement strategy account for inflation? How will you grow your assets and income to keep up with rising prices?
 
Ready to develop your retirement budget? Let’s talk about it. Contact us at Cornerstone Financial Associates. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://www.prnewswire.com/news-releases/fewer-americans-are-budgeting-in-2019----although-they-think-everyone-else-should-300824384.html
2https://institutional.fidelity.com/app/item/RD_13569_42402/retirement-planning-health-care-costs.html
3https://longtermcare.acl.gov/the-basics/how-much-care-will-you-need.html
4https://www.policygenius.com/homeowners-insurance/how-much-does-homeowners-insurance-cost/
 
 
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.
 
19631 - 2020/1/10

​Do you make any sacrifices for lent? Perhaps sweets or some other unhealthy favorite food? Or are you trying to kick a more serious habit, like smoking or drinking? No matter what you’re giving up, lent is a great time to make a small sacrifice in your life and practice discipline.
 
Sacrifice and discipline are also important for retirement planning. It takes a significant amount of savings to fund a long, enjoyable retirement. In order to accumulate those savings, you may need to bypass some spending today.
 
A budget is always a helpful tool to manage spending. Unfortunately, many Americans don’t use one. According to a recent poll, a third of all Americans don’t use a budget.1 If you’re among that group, now may be the time to make a change.
 
Budgeting isn’t the only way to save money though. By making some sacrifices in your current lifestyle, you may be able to reduce your spending and put more money away towards retirement. Below are a few examples of things you could give up to boost your retirement savings:

Large Home 

If you’re like most people, your home is probably one of your largest expenses. It comes with a mortgage payment, but that’s not all. You also have insurance, property taxes, maintenance, repairs, and more.
 
When it comes to housing, bigger isn’t always better. Yes, a bigger house may offer more space and may be nicer, but a larger and more expensive home also usually leads to higher costs. The more your home costs, the higher the insurance and taxes are likely to be. A larger home often generates higher costs for maintenance and utilities.
 
If you’re in the market for a home in the near future, consider staying well under budget. By simply moving down to a lower price range, you could save yourself thousands not only on your mortgage, but also all the other associated costs.

Travel, Shopping, and Dining Out 

Going out to eat and shop is always fun, as are the occasional vacations. While the cost of a night out may not seem that significant as a one-time expense, those costs can certainly add up over time. A budget can help you manage your spending in these areas and more.

One way to manage these expenses is to simply cut down on the frequency. For example, if you go out to a nice dinner twice a month, try cutting back to once a month and putting the savings into your IRA. Instead of going on a few big trips a year, try taking one large vacation and some smaller trips over a long weekend. You don’t have to cut these items out of your life altogether. However, reducing the frequency of these discretionary types of spending could help you boost your savings.

Yearly Raises 

Do you get an annual raise at your job? Does the raise make an impact on your finances or does it seem to just disappear?
 
One way to make that raise more impactful is to put it in your 401(k) or other retirement savings plan. As you get a raise, simply increase your contribution to match the raise amount. The increased salary will go straight into your retirement rather than into your pocket. Over time, those contributions could compound and add up to a substantial amount of additional savings.
 
Ready to develop your retirement budget? Let’s talk about it. Contact us at Cornerstone Financial Associates. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://www.prnewswire.com/news-releases/fewer-americans-are-budgeting-in-2019----although-they-think-everyone-else-should-300824384.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.
 
19634 - 2020/1/13

Tax time is almost here again. Are you one of those filers who wait until the last minute? You’re not alone. Unfortunately, procrastination can be costly, especially in retirement when every dollar count. If you wait, you may rush and that may cause you to miss valuable deductions, credits, and other strategies.
 
The good news is you still have time to prepare. Below are five actions you can take today to get prepared for tax time and possibly save yourself some money. If you haven’t gotten started on your tax planning, now is the time to do so.

Get organized early. 

Time is a valuable asset, especially when it comes to tax planning. Take time now to organize all your receipts for major purchases, especially for things that may be deductible like business expenses or health care costs.
 
You should also use this time to get all your 1099s, W2s, and other income documents in order. If you haven’t received some yet, call the appropriate administrator and ask for one. The earlier you can ballpark your total income for the year, the sooner you can start analyzing possible deductions and credits.

Track your medical expenses. 

Did you have major medical expenses in 2019? If so, those expenses could save you tax dollars. You can deduct medical expenses that exceed 10% of your adjusted gross income in 2019.1
 
Of course, you need to know how much you had in medical expenses and be able to document those costs to take advantage of this deduction. Track down all statements and receipts to find a total. You also may want to contact your health care provider for documentation if necessary.

Make a retirement contribution. 

Do you have a traditional IRA? If so, you still have time to make a contribution and potentially realize a tax deduction. In a traditional IRA, your contributions are tax-deductible, assuming you meet certain income restrictions. Growth is tax-deferred and your withdrawals in retirement are taxed as income.
 
You can make a deduction up to April 15 and count it as a 2019 contribution. In 2019, you can contribute up to $6,000, or $7,000 if you are 50 or older.2 If you haven’t yet met the maximum, you can still do so and possibly see a deduction on your upcoming return.

Take your RMD. 

If you’re age 70 ½ or older, your tax issues may not involve contributions but rather withdrawals. At age 70 ½, you are required to start taking minimum distributions from your 401(k), IRA, or other qualified accounts. These required minimum distributions (RMDs) amounts are based on your account balances and your age.
 
What happens if you don’t take your RMD? You could face a penalty of up to 50% of the required withdrawal amount.3 Fortunately, you have until April to take your RMD for 2019. If you haven’t done so yet, now is the time to make that distribution.

Think about the future. 

Tax planning isn’t just about your upcoming return. It’s also about your long-term future. What steps can you take now to reduce your tax exposure ion future returns?
 
For example, perhaps you could create tax-efficient income in retirement. Maybe you can take advantage of additional deductions and credits by planning ahead. You may be able to reduce your taxable income by delaying your Social Security filing. A financial professional can help you explore these options and develop the right strategy for your needs.
 
Ready to take control of your taxes this year? Let’s talk about it. Contact us at Cornerstone Financial Associates. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 
1https://turbotax.intuit.com/tax-tips/health-care/can-i-claim-medical-expenses-on-my-taxes/L1htkVqq9
2https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-contributions
3https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions#9
 
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.
 
19562 - 2019/12/16

Retirement is supposed to be a joyous occasion. After all, this is the time when you get to leave the constraints of a busy career behind. You’re free to set your own schedule and spend your time as you wish. There’s no boss to report to. No clients to manage. No big projects to complete. You’re free to do whatever you like.
 
So why is retirement so difficult for many people? Very often, new retirees realize that this new phase of their life isn’t all they had expected. They miss socializing with their colleagues at work. Without a job, they feel a lack of purpose. They have trouble transitioning to life at home. In fact, a recent study showed that retirees were twice as likely to suffer from depression as those who are still working.1
 
The good news is you can take steps to ease into retirement and pave the way for a smooth transition. Below are a few tips to consider as you leave the working world:

Structure your day. 

During your career, you likely had a set schedule. You had tasks, obligations, and goals you wanted to achieve. You may have even had a to-do list.
 
Just because you’re retired doesn’t mean you have to abandon that structure. If you get comfort from having a list of tasks or objectives, keep doing it in retirement. Set a schedule for the next day. Instead of focusing on work-related tasks, you can pursue a new hobby, meet with friends, or even do something nice for your grandchildren. A structured day could help you fulfill your need for productive activity.
​
Set short-term goals or milestones. 

At work, you’re always looking forward to the next milestone. Maybe it’s landing a new client or finishing a big project. In retirement, you may not get that same feeling of achievement or success.
 
In retirement, you may feel depressed or anxious without a similar set of goals or objectives. Just because you’re no longer working doesn’t mean you can’t have goals. Plan a big vacation for you and your spouse. Take up a new activity or hobby and set goals for yourself. You could even volunteer for a favorite charity and take on a big fundraiser or similar project. You could coach your grandchild’s sports team. By setting short-term goals you can give your retirement a sense of purpose.
 
Make new friends. 

Maybe you think of your coworkers as friends or maybe you think of them as merely colleagues and acquaintances. Either way, they may play a major role in your social life. They’re a source of adult interaction and socialization. After you retire, you may find that you miss your coworkers and the daily conversation you have with them.
 
Socialization isn’t just important for your mood and happiness. It’s also important for you health. A recent study found that retirees with large social networks had a 26% lesser chance of developing dementia.2
 
Look for opportunities to make new friends in retirement. You could pursue a hobby or join a group of like-minded people. You could volunteer. Many community centers offer outings and activities for retirees. Be proactive in expanding your social circle. It could make your retirement happier and even healthier.
 
Ready to plan your transition into retirement? Let’s talk about it. Contact us today at Cornerstone Financial Associates. We can help you analyze your needs and develop a strategy.
 
1https://www.usatoday.com/story/money/2019/06/11/depression-during-retirement-how-cope-and-prepare/1416091001/
2https://brainworldmagazine.com/friends-with-benefits-socializing-to-fight-alzheimers/
 
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.
19535 - 2019/12/10