Category: Retirement Planning
Estate Planning and the Importance of Drafting a Will
Often, the prospect of writing a will brings up feelings of discomfort. And yet, devising a will is one of the most important factors in estate planning, one that should promote feelings of security. Doing so means that heirs will be provided for and your distribution wishes will be met. Like many people, have you postponed the task of writing a will? Or, is it time to review a will drafted years ago? A will is a formal, legal document instructing your survivors in the settlement of your estate. A qualified, experienced, legal professional can help ensure your will is properly written and contributes to the overall success of your estate plan.
Composing a will helps to ensure that you control how your estate is divided. An estate that is not covered by a will (also known as an intestate estate) will bring into effect your state’s intestacy rules. These rules govern how your estate will be divided and by whom. Some people may believe their estate is too minor to need a will, but even if you believe this is the case, you should consider writing one anyway. The reason is simple: If you die without a will, you automatically forfeit the chance to direct the dealings of your estate. In addition to facilitating bequests, a will is an opportunity for you to designate your own executor, guardians for minor children, and other fiduciaries.
If you have decided that you would like your estate to pass to personal friends or charity, a will is the primary means of fulfilling these wishes. Without a will, the courts will have no way of knowing your preferences and will seek relatives—however distant—for distribution purposes. For those who have life partners and are not married, wills are a means of helping to ensure that these loved ones will be included. In addition, a will offers the opportunity to designate a secondary beneficiary in the event of the primary beneficiary’s death.
Even those who have shifted the majority of their assets into trusts or who use joint ownership should draw up a will. While these methods are designed to bypass probate (the judicial process that establishes the validity of a will), they are not able to cover all assets. A will, however, does have the potential to cover all assets, leaving no property unaccounted for and no stone unturned.
Wills are a means of providing security to you and your loved ones. The topic may be emotionally challenging, but when the many advantages are considered, they far outweigh temporary discomfort. Careful estate planning is the best way to identify how your assets will be divided, who is to be named executor, and who will receive benefits according to your wishes. Consult a legal professional for specific guidance.
Copyright © 2011 Liberty Publishing, Inc. All Rights Reserved.
Why Many Millionaires Don’t Feel Rich
The term “millionaire” once inferred that a person was part of society’s upper crust, able to enjoy luxuries most only dreamed of, including vacation properties and early retirement. The Gilded Age of the 1980s was all about flaunting excess, as echoed in the movie “Wall Street” and television series like “Dallas” and “Dynasty.” Back then one was perceived to be “rich” if he or she had an income around $100,000, according to a USA Today article released on May 22, 1987. By 1989, American millionaires had become quite common: there were about 1.5 million of them. That number has boomed. As of 2009, there are 7.8 million millionaires living in the United States, according to Spectrem Group. (Making this dream come true takes work, but it’s well worth the effort. See 10 Steps To Retire A Millionaire.)
TUTORIAL: Retirement Planning
The Millionaire Outlook
However, being a millionaire today doesn’t get a person so far as it once did, and the millionaires themselves are painfully aware. Fidelity Investments recently released the findings of its Fidelity® Millionaire Outlook survey, which looks at “investing attitudes and behaviors of more than 1,000 millionaire households,” according to the Fidelity media release. This year’s study revealed that 42% of millionaires surveyed do not feel wealthy; 46% said the same thing in 2009.
Why are American millionaires lacking such self-confidence toward their own success? It may have something to do with relativity. In wealthy West Coast cities like San Francisco and Palo Alto, home to the mega rich like PayPal co-founder and venture capitalist Peter Thiel, and Facebook CEO Mark Zuckerberg, being a millionaire isn’t enough to launch you into a life of luxury – or even make you stand out from the pack. In 2007, Match.com founder Gary Kremen, explained to the New York Times that “you’re nobody here at $10 million,” referring to the concentration of money in Silicon Valley.
Increased Cost of Living
In addition to the surrounding competition, the cost of living in millionaire-dense areas is enough to chip away at anyone’s net worth. The ACCRA Cost of Living Index, published by The Council for Community and Economic Research, lists cities in New York and California among the top 10 most expensive places a person can reside. Manhattan is the most expensive, indexing at 207.9.
Another reason millionaires might not feel so rich is that from a day to day standpoint, they’re not actually living much differently than the rest of us. Being coined a millionaire once led to the conclusion that one did a lot more play than work, a stigma that no longer applies to millionaires in 2011. According to Spectrem Group, the average United States millionaire is 62 years old. Just 1% of millionaires are under the age of 35, and 38% of millionaires are 65 and older. West Coast millionaires skew slightly older.
Further, a large number of individuals in the Mountain States and Texas never plan to retire, and millionaires in the Northeast and West Coast make up the largest percentage who don’t have plans to retire for at least 10 more years.
Living on Less
According to “The Millionaire Next Door: The Surprising Secrets of American’s Wealthy” by Thomas J. Stanley and William D. Danko, frugal living may also contribute to the insecure self-perception millionaires have regarding their wealth. Their research found that the average millionaire lives on less than 7% of his or her wealth, wears inexpensive suits and drives American-made cars that are not the current year’s model. Throw the lagging housing market and volatile stock market into the mix, and it looks like millionaires may not be any better off than the rest of us when it comes to the ability to rest on our financial laurels.
Given all these factors, what will take millionaires to feel rich again? Those surveyed by Fidelity pinpointed $7.5 million as the investable asset level that would make them feel back on top. (Becoming a millionaire is not as hard as you might think – it just takes time. Check out 6 Simple Steps To $1 Million.)
And why pay attention to the millionaire “woe is me” findings? They could truly be the key to your own financial future. While millionaires’ confidence level in the economy is negative, their outlook for a recovery is at the highest level since 2006, the year Fidelity began keeping tabs on them. Of those surveyed, 43% said they plan to return to stock market investing within the next 12 months. In a Fidelity-released media statement Michael R. Durbin, president of Fidelity Institutional Wealth Services®, explained that “millionaires’ outlook could be seen as a leading indicator of the direction of the economy, especially since the last time we conducted this survey in early 2009, they forecasted improvement in all aspects of the U.S. economy at the beginning of 2010.”
The Bottom Line
Whether you envy millionaires or shake your head in awe at their lack of financially secure feelings, you can stand to benefit from following their lead, whether you choose to get back into the market, scale back your spending, or continue to live just as you do. One day, you just might be a millionaire, too.
This article was posted on April 13, 2011 in the online magazine, Financial Edge, by Investopedia.com
You Do It For L-O-V-E
What do love and life insurance have in common? More than you might realize. The main reason you buy life insurance is because you love someone. Think of it as the ultimate act of selfless love. Life insurance isn’t glamorous or sexy, but it is essential to protecting you, the ones you love, and/or your business.
In my book, life insurance is a product of love. It may sound a bit sappy, but the toughest of us will wish we had it when our family most needs it. It’s your choice. Choose to leave a positive and lasting legacy, not a burdensome reminder of you being gone, along with your missed income.
Having a sound financial plan requires knowing which insurance and investments products to buy. But there are literally thousands of insurance policies, annuities, etc. from which to choose. That’s where a qualified insurance professional can help. Contact me today for your free insurance/estate analysis and review.
This video drives home this very powerful concept.
Here’s a free resource guide: “What You Need To Know About Life Insurance”.
http://www.lifehappens.org/pdf/printable-consumer-guide/life-insurance-pcg.pdf
Listen Up Hawaii: Ignore LTC Planning at Your Peril
Check out this article that appeared in the NY Times:
Ignore Long-Term Care Planning at Your Peril
You may never need long term care, but if you do, you’ll know that you’re prepared for whatever life may bring.
Most of us realize the fact that it’s going to be more expensive for us to take care of ourselves down the road, and we need to budget accordingly. Prior to making any decisions, make sure you talk to your advisor or agent about how to handle any proposed increases or changes in policy structure.
Consider this: In a recent Financial Planning Association blog, Ira L. Barnett, LUTCVF, said, “There are two possible mistakes someone can make in deciding to obtain LTC insurance: 1. Buy the coverage and never have a claim (loss of premium paid, lost income potential, etc.). 2. Not buy the coverage and have a claim. Personally, mistake #1 is a lot more attractive!”
So when is the best time to buy long term care insurance?
Answer – Of course, most of us need to balance our investments and expenses carefully, and long term care insurance has to be factored in with many other responsibilities. But it is important to note that long term care insurance is generally less expensive for younger buyers than for older ones. In addition, it is smart to buy long term care insurance while you are relatively healthy. Unfortunately, once a person’s health declines, he or she may become ineligible for long term care insurance.
The simple answer is this: the right time to buy long term care insurance is when you can afford it, and before you need it. We can work with you to help create a policy that meets your needs and suits your budget. Call me for a FREE needs analysis and informational booklet, (808)216-4147.
Betty White supports “Life Settlements”
First of all, I would expect nearly everyone in America to be familiar with Betty White. After starring in 2010’s wildly popular Snickers Super Bowl ad, this Emmy Award-winning 88-year-old Hollywood icon is clearly a major part of our pop culture. I can say with certainty, that the same cannot be assumed about the life insurance industry’s much less recognizable product: “Life Settlements”.
While this superstar could get top dollar endorsing practically any product or service she wanted, White felt so strongly about the value of life settlements and the need to create consumer awareness of the option, that she is endorsing life settlements. We that are in the industry really thank you, Bette White! Because of her, many older Americans who may know little about life settlements, and may, therefore, be wary of them are now being educated on its merits as a valuable financial product for seniors.
So, what are life settlements? Well, a life settlement, according to Wikipedia, “is a financial transaction in which the owner of a life insurance policy sells an unneeded policy to a third-party for more than its cash value and less than its face value.”
In basic terms, a life settlement, or “senior settlement”, as they are sometimes called, involves selling an existing life insurance policy to a third party—a person or an entity other than the company that issued the policy—for more than the policy’s cash surrender value, but less than the net death benefit. While Life settlements can be a valuable source of liquidity for people who would otherwise surrender their policies or allow them to lapse—or for people whose life insurance needs have changed, they are not for everyone.
Life settlements may make sense for people who no longer need or want their insurance policies, and would otherwise surrender their policies or allow them to lapse. But even then, you should proceed with caution. Consult with your broker or other “trusted” financial services provider. And finally, make sure that you are dealing with properly licensed entities who are aware of the confidentiality policies of the parties involved and understand the tax implications of the transaction.
“What is Your Greatest Asset?”
Without hesitation, many people believe that their greatest asset is their home, or their retirement savings. Neither is correct. To be clear, your greatest asset is your ability to earn an income, that is, to make money and bring home a paycheck.
In a nutshell, my job is to help my clients protect their paycheck. My role is to solve a problem, and in this case, risk is their problem. We facilitate the transfer of risk. As I tell my valued clients, “let’s face it, your greatest asset desperately needs to be protected…” It is the foundation on which all of their hopes, dreams and aspirations are built. Without this type of “paycheck protection” coverage, it leaves them vulnerable financially. Continue reading
Top 10 Reasons to Buy a Long Term Care (LTC) Insurance Policy
Perhaps Dorothy, in “The Wizards of Oz”, said it best: There’s no place like home! That’s why many Hawaii residents who need LTC prefer to receive it in their own homes. The ability to live independently is critical to maintaining quality of life. Remember, long-term care is not just about nursing homes anymore. Ultimately, coverage gives you the freedom of choice.
Here are my top ten reasons to buy LTC insurance coverage:
1. You will have an experienced professional available to plan for your care at home, providing all types of services related to your particular illness, injury, or condition.
2. Your family can be part of the care plan, but will not have to be the planners.
3. You will have the money to pay for long term care (according to PBN, Hawaii ranked 7th most expensive in the nation for home care services, with a median annual rate of $51,480 in 2010) without having to deplete the family nest egg.
4. Your loved ones can carry on a more normal life rather than being subject to your everyday (“activities of daily living” like bathing, dressing, eating, toileting, etc.) needs.
5. Your family will be able to attend to your needs out of love rather than obligation.
6. Because you’ll have the funds, you will be able to choose your own facility or choose to stay at home longer rather than prematurely entering a nursing home.
7. You will be able to leave some of what you have to your family rather than using up a large portion of their assets to pay for needed care.
8. You will be able to stay with your children or other loved ones without depending on them for all your care.
9. You can feel good knowing that all of the money you worked so hard to attain won’t be used up in a few short years (PBN reported that Hawaii’s nursing home costs have a median annual rate of $114,975, compared to the national average of $75,190).
10. Finally, there will be less friction between family members; one member won’t be stuck with the responsibility of caregiving.
M. Garrett Wheeler is a long-term care specialist with Guardian in Honolulu, Hawaii. He’ll be glad to explore your options for coverage that suits you best, so that if you ever need it, you’ll have the freedom to choose the care setting that is most appropriate for your circumstances. He may be reached at gage@successhawaii.com or by phone at (808) 216-4147.
Not Suprisingly, Hard Times Are Tough On Relationships
Relationships really seem to suffer when the economy is in the tank. According to John Ingrisano, author of The Back to Basics Book of Money! A Couple´s Guide to Financial Peace,
“marriage is an economic partnership. Money may not be the sole factor in its success or failure, but it is one of the top three.”
So, when couples run into financial challenges, Ingrisano says that it can impact every other aspect of their relationship. “It can turn your life and your home into a domestic battleground.” What can you do?
Here are just some recommendations from Ingrisano, who is also director of the Family Finances Conference Center.
- Keep the channels of communication open. Talk about your fears and concerns. Exchange points of view.
- Share money decisions and responsibilities. Pay bills together. Discuss purchases. Most of all, discuss your options if finances become tight. Do you reduce spending (cancel a vacation, dine out less often, give up gym membership)? Take a second job? Sell assets? Map out a strategy for getting through this together … and do it together.
- Keep thinking long-term. Identify mutual goals … and put them in writing. Where would you both like to be one year, two years, and ten years from now? In a nicer home? With children who are debt–free college grads? Retired in comfort at age 60? If you have trouble reaching agreement, look for compromises.
At The Wheeler Group LLC, we believe that the best way for you to learn about life insurance and the other financial services products we offer is to consult one of our professionally trained, licensed agents. Simply call us at (808) 216-4147 or easily email: gage@successhawaii.com to request a no-obligation, no–cost consultation with us.
*Why I Purchased Life Insurance at 24
When I was a 24–years old, I became a life insurance policy owner. At the time, I was a single individual, with some disposable income and no dependents.
Why did I do this? Well, the process began at my workplace. After asking a friend and colleague, Steven, about his retirement future, he shared how he intended to plan for it. He rattled off the usual, in no certain order: a 401(k) plan, Roth IRA account, personally–held stocks and bonds, a money market account. And, guess what? Life insurance.
By all means, I was surprised by that last one. Why was life insurance a part of his financial portfolio? My understanding was that we received annually renewed, term life insurance through our employer; so, basically, we were covered I thought. And of course, like many others’, I did not view life insurance as a part of any financial strategy at all.
The Wheeler Group Participates in First-ever Personal Finance Expo in Honolulu
Over this past weekend, we at The Wheeler Group LLC participated in the first-ever Personal Finance Expo here in Honolulu. The nonprofit Hawaii Council on Economic Education and the Hawaii Event Group hosted this well-received event. The two-day expo took place on Aug. 15 and 16 at the Neal S. Blaisdell Center and featured more than 30 seminars and a variety of exhibitions from both private companies and the government. The goal of the expo was to educate people of all ages about topics such as debt management, investments, retirement plans, employment and entrepreneurship and even the basics of starting a new business.
In my estimation, Kristine Castagnaro, and her team at The Hawai`i Council on Economic Education exceeded event expectations and did a wonderful job for bringing together participants and exhibitors as resource providers. We were fortunate to meet numerous people interested in learning more about our programs designed to help them with retirement accumulation–saving tax-deferred, as well as distribution planning through tax-advantaged programs. As we shared with visitors to our booth, we believe that annuities and insurance are the essential foundational elements of a diversified portfolio, and we believe in safety through guarantees and asset allocation.
SEA Financial Hawaii 