Retirement Planning News

The high majority of Americans are familiar with the term 401k as many have and are contributing to one themselves; yet very few have an understanding beyond the term 401k, itself.

Some quick facts:

• A 401(k) is a tax-favored retirement savings account offered by employers
• Individuals can contribute up to $18,000 a year ($24,000 if age 50 or older)
• Some employers offer the choice of both a traditional 401(k) and a Roth 401(k)
• You can contribute to both a 401(k) and an IRA in the same year
• The biggest drawbacks of a 401(k) are plan fees and limited investment options
• If you leave your job, you can roll over your 401(k) money into an IRA

According to recent statistics from the Department of Labor, there were over 638,000 defined-contribution plans in the United States. Of all those plans, 80.4% were 401(k) plans, which covered 88.7 million total participants. About 73.7 million workers were active participants in the 401(k) plans.

Like many of those participants, you may be counting on your 401k to support you during your retirement years. You may also be concerned with just how close those “Golden years” truly are.

Have you ever sat there and asked yourself how much you really understand about your 401k? How it works? Or when you will be able to access your money?

Most Americans believe accessing their funds is not an option at all until retirement and they aren’t entirely wrong. The most common circumstances or situations that allow access to your retirement money, albeit few and far between are:

• Leaving current employer for new job
• Retiring from the workplace
• Getting divorced
• Becoming completely disabled

For many people who may be just a few years away from fully retiring, protecting & preserving their retirement savings is a big concern. Many pre-retirement savers would like to take control of their savings outside of there 401k, to not only protect & preserve but to control those monies in strategies not provided within their current plan. For most, money saved within a 401k will be relied upon for retirement income. If your thinking about retiring yet still have a few more years to go this strategy may be right for you.

With our experience and guidance from retirement-advice-law attorneys – An IRS provision within ERISA guidelines has been discovered that can change your retirement entirely!

It’s called an “In-Service Alternate Rollover” or ISAR – and it is a process which allows people to move current 401(k) savings without tax liability or a 10% penalty. With this newly discovered solution, you can move your 401k money while retaining your employer-matching incentives. Best of all, it is done without you having to change jobs, get a divorce or retire!

If you’re looking to take some of the mystery out of annuities, there’s a new online resource that can help.

Wright Retirement Solutions of Texas will provide consumers with impartial facts about the various types of annuities available and how they differ. Knowing those differences can help consumers make informed decisions about whether an annuity should be part of their retirement savings strategy.

A lot of people avoid annuities based on fear, not fact. The goal of Wright Retirement Solutions of Texas is to give the American consumer a place to learn about annuities without a sermon or sales pitch.

Here's how it works. A consumer can contact WrightRPSTexas.com (by email or phone) with their questions regarding retirement and income planning. They will receive a timely response from an Retirement Planning Solutions consumer contact specialist. That response could be a verbal (or written, if emailed) explanation of annuity features and benefits which would address the consumer’s concerns. The consumer may also be offered free educational literature that can help explain annuities and their benefits in greater detail.

What makes Wright Retirement Solutions of Texas different is that it doesn’t sell anything. The company’s stated goal is consumer education, not pushing products. In fact, annuities are one of a handful of financial products which cannot be sold online. Annuity products can only be purchased face-to-face from licensed life insurance professionals.

Wright Retirement Solutions of Texas is, however, affiliated with hundreds of insurance agents from coast to coast, and all are very familiar with the many types of annuities available. So if a consumer calls with a specific question, Retirement Planning Solutions can refer the caller to one of the licensed professionals in this nationwide network.

If the consumer feels comfortable discussing their unique situation with an annuity specialist, we certainly can put them in contact with one.

We’re here to give people the tools they need to make the best choice for a secure future. Period.

And given the complexity of most annuities, that job could keep Wright Retirement Solutions of Texas busy for a long time.

The idea of leveraging one’s assets and maximizing one’s estate with life insurance is a well-known concept used by many retirees for decades. “If done properly, this concept can be the most significant estate planning tool to own within a portfolio of investments.”

There is a new type of life insurance policy gaining popularity in recent years that provides ‘living benefits’ or ‘accelerated benefits’. It is often referred to as hybrid life insurance because the insured doesn’t have to die to take advantage of the policy’s death benefit.

How it works – the insured’s amount of death benefit is determined by the amount of the one-time deposit, age, gender, and health. Often that single deposit can be multiplied by two or more when determining the policies guaranteed death benefit. This means for a person with average health, commonly a non-smoking female that contributes $100,000 could realistically recognize an immediate $200,000 tax-free death benefit.

In the prior example, the death benefit can be provided to the heirs of their estate probate free as assigned beneficiaries to the policy, allowing the insured to transfer her wealth tax-free and increase the amount her beneficiaries will inherit. Many insurance companies that specialize in this concept provide the option to accelerate the policies death benefit to be used for chronic illness and long-term care expenses.

For the person with bank savings accounts, CDs, money market accounts, brokerage accounts, and even annuities that like the idea of being able to always have access to their money, some of these hybrid policies guarantee 100% return of premium, other policies allow withdrawals of the policies cash value. Many have growth based on either fixed rates of interest or an indexed rate of interest, that can be substantially better than a savings account, CD, or an annuity. For many people, the added benefits make hybrid life insurance an attractive alternative to cash in the bank.

For people over the age of 65, the common misconception is that the required underwriting process is burdensome and requires perfect health to qualify. This is simply not the case, simplified underwriting makes getting qualified…simple. No medical exam or blood test are needed. Advanced underwriting process and technology adopted by insurance carriers expedites approval and only requires a few medical questions to be answered along with a brief telephone interview.

Hybrid life insurance can be a valuable planning tool with favorable tax benefits and guarantees. With every type of investment, there are pros and cons, and it’s important to work with a competent professional with the knowledge and experience to help make an educated decision about this unique estate planning tool.