Five Financial Success Strategies for Today’s Busy Woman
Provided by Alicia Eberle, a financial representative with Commonwealth Financial Group, a MassMutual Agency; courtesy of Massachusetts Mutual
Life Insurance Company (MassMutual)
It’s preparing for the unexpected to help protect the lifestyle you have worked so hard to achieve. Women play a pivotal role in our economic vitality, and the future of our society. Not just because of your contributions – whether as an employee, business owner or even “mompreneur” – but because you have worked hard for everything you’ve achieved. Yet, throughout it all, you’ve remained the backbone of your family unit.
You would think that being a member of the most influential segment of the U.S. population would put you in the driver’s seat. Unfortunately, if you’re like many women today, the hard reality you face is that the growing demands on your time can unfortunately distract you from taking appropriate steps to help yourself and your family get – and stay – on track financially. But it doesn’t have to be that way. The following five steps are designed to help you in your journey to greater financial security.
Step #1: Be honest with yourself. Take a good, hard look at where you and your family members spend money and identify whether the expenditure is motivated by a short-term desire or a long-term goal. Adjust your budget and your spending pattern to reflect a vested interest in your financial future – not just the extra stuff that might seem important now, but won’t matter much to you down the road. (Keep some fun money in your budget; however, so you and your family members don’t feel deprived.)
Step #2: Manage your money – and your debt – wisely. If you are overspending on your credit cards and finding yourself paying the minimum balance each month, you should consider getting your use of credit under control. It is critical that you have a good handle on both your budget and your credit score. Be sure to check out valuable consumer-oriented websites, such as http://www.ftc.gov/bcp/edu/microsite /moneymatters/index.html from the Federal Trade Commission. It’s an excellent resource for those who are looking to manage money – and debt –for greater long-term financial security.
Step #3: Plan for the unexpected. Recently, many Americans began to save more when they realized that job security was not something they could rely on – others faced the harsh reality of trying to pay their bills with substantially less income (or none at all), thanks to a layoff or reduced work schedule. Do you have enough money stashed away for a rainy day? It is advised that you should have at least six months of expenses saved in case of an emergency. It won’t take long if you set your mind to it and start saving right away. Start small if you have to, but start now. Tip: Save a set amount from each paycheck, in an account separate from your checking, that is earmarked for emergencies only. Think of it as a regular bill you must pay.
Step #4: Talk about the hard stuff. It is never easy to have difficult conversations. But the unexpected can – and unfortunately, does– happen sometimes. Whether you are married, single, divorced, have children, care for aging parents or a disabled loved one, bringing up the subject of death or disability – or even divorce –can be painful. However, it is important that you think about these life events and how they would affect you or someone you love if they were to occur.Preparing for the unexpected is a good decision; it can help you to protect the lifestyle you have worked so hard to achieve.
Step #5: Start a family finances action plan. With a to-do list a mile long, most families are struggling to keep all together. But despite busy schedules, it’s important to talk to your family about your finances and concerns. Consider setting aside an hour once a week—or every other week at the very least—to talk through your current expense issues, financial goals and savings plan. A weekly or bi-weekly check point can be a good way to start a healthy dialogue about your family’s financial goals. Of course, choosing a knowledgeable, local financial professional can help you and your family
get – and stay – on track financially.
© 2010 Massachusetts Mutual Life Insurance Company, Springfield, MA
CRN201205-133777
Thursday, September 16, 2010
Thursday, September 9, 2010
Conservative Savings… Or Lifetime Retirement Income?
Conservative Savings… Or Lifetime Retirement Income?
Provided by Alicia Eberle, a financial representative with Commonwealth Financial Group, a MassMutual Agency; courtesy of Massachusetts Mutual Life Insurance Company (MassMutual)
If you are approaching retirement, a key element of your retirement strategy may involve choosing the best way to secure a predictable source of retirement income; one that’s guaranteed to be there when you need it, for as long as you need it. As you explore ways to achieve your income goals, you may have considered a variety of conservative financial vehicles designed to protect your retirement nest egg, such as bank savings and money market accounts, certificates of deposit (CDs) or deferred fixed annuities.
Each of these investment vehicles is considered a conservative choice and each offers unique advantages. But only the deferred fixed annuity is specifically designed to provide guaranteed retirement income for your lifetime.*
All conservative accumulation products are not created equal
Let’s start with a few basics.
A deferred fixed annuity is conservative retirement vehicle that is designed to help you accumulate and protect your assets until you are ready to receive them as guaranteed income during retirement. Most deferred fixed annuities allow you to choose whether to receive guaranteed income for a specific period of time, or for your lifetime. Earnings accrue tax deferred until they are withdrawn, allowing your contract value to take full advantage of the impact of compounding interest. Once the annuity benefit is paid, the portion attributable to earnings is taxed.
Certificates of deposit are designed to be a savings vehicle, a conservative way to save and preserve assets when your investment horizon (the amount of time you expect assets to be invested) is relatively short. An example might be saving money for a down payment on a house. CDs typically are short-term vehicles and may not be as efficient at meeting long-term retirement needs. Although the interest from a CD can be used as income, it’s generally necessary to hold the CD until it reaches maturity before you can withdraw the funds without penalty. What’s more, any earned interest is taxable for the current year on an annual basis.
Insured vs. guaranteed – what’s the difference?
Both fixed annuities and CDs are considered low-risk financial vehicles because they guarantee a positive rate of return. However, these guarantees work in different ways:
• CDs are generally backed by banks and are insured for up to $250,000 for each depositor by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).
• Fixed annuities are guaranteed by the issuing insurance companies, with no maximum. They are not FDIC insured.
Be sure to ask your financial professional about an insurance company’s ratings and financial strength if you plan to purchase an annuity, because payment of lifetime income is contingent upon the claims-paying ability of the issuing company or companies.
What if you need some of your money before you retire?
Many fixed annuities allow the contract owner to withdraw a certain percentage of the contract value (typically up to 10% on an annual basis or accumulated interest) without incurring any surrender charges, although tax penalties may apply. Amounts withdrawn in excess of the specified percentage are often subject to surrender charges or adjustments. These charges generally decline each year and expire at the end of a specified number of years. If withdrawals are taken prior to age 59 ½, a 10% federal income tax penalty may apply.
Although some CDs may include interest withdrawal provisions, investors generally must wait until the CD matures to avoid early withdrawal charges.
Ask a trusted financial professional
Remember, not every conservative savings vehicle is the same. Fixed annuities offer many of the same features that make other conservative products so popular. In addition, fixed annuities offer other unique advantages that may be beneficial to you. Your financial professional can help you to choose the vehicle that best meets your retirement income objectives and investment needs.
© 2010 Massachusetts Mutual Life Insurance Company.
* Guarantees and payment of lifetime income are based on the claims paying ability of the issuing company.
Annuity products are issued by Massachusetts Mutual Life Insurance Company, Springfield, MA and its subsidiary, C.M. Life Insurance Company, Enfield, CT.
CRN201112-128691
Provided by Alicia Eberle, a financial representative with Commonwealth Financial Group, a MassMutual Agency; courtesy of Massachusetts Mutual Life Insurance Company (MassMutual)
If you are approaching retirement, a key element of your retirement strategy may involve choosing the best way to secure a predictable source of retirement income; one that’s guaranteed to be there when you need it, for as long as you need it. As you explore ways to achieve your income goals, you may have considered a variety of conservative financial vehicles designed to protect your retirement nest egg, such as bank savings and money market accounts, certificates of deposit (CDs) or deferred fixed annuities.
Each of these investment vehicles is considered a conservative choice and each offers unique advantages. But only the deferred fixed annuity is specifically designed to provide guaranteed retirement income for your lifetime.*
All conservative accumulation products are not created equal
Let’s start with a few basics.
A deferred fixed annuity is conservative retirement vehicle that is designed to help you accumulate and protect your assets until you are ready to receive them as guaranteed income during retirement. Most deferred fixed annuities allow you to choose whether to receive guaranteed income for a specific period of time, or for your lifetime. Earnings accrue tax deferred until they are withdrawn, allowing your contract value to take full advantage of the impact of compounding interest. Once the annuity benefit is paid, the portion attributable to earnings is taxed.
Certificates of deposit are designed to be a savings vehicle, a conservative way to save and preserve assets when your investment horizon (the amount of time you expect assets to be invested) is relatively short. An example might be saving money for a down payment on a house. CDs typically are short-term vehicles and may not be as efficient at meeting long-term retirement needs. Although the interest from a CD can be used as income, it’s generally necessary to hold the CD until it reaches maturity before you can withdraw the funds without penalty. What’s more, any earned interest is taxable for the current year on an annual basis.
Insured vs. guaranteed – what’s the difference?
Both fixed annuities and CDs are considered low-risk financial vehicles because they guarantee a positive rate of return. However, these guarantees work in different ways:
• CDs are generally backed by banks and are insured for up to $250,000 for each depositor by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).
• Fixed annuities are guaranteed by the issuing insurance companies, with no maximum. They are not FDIC insured.
Be sure to ask your financial professional about an insurance company’s ratings and financial strength if you plan to purchase an annuity, because payment of lifetime income is contingent upon the claims-paying ability of the issuing company or companies.
What if you need some of your money before you retire?
Many fixed annuities allow the contract owner to withdraw a certain percentage of the contract value (typically up to 10% on an annual basis or accumulated interest) without incurring any surrender charges, although tax penalties may apply. Amounts withdrawn in excess of the specified percentage are often subject to surrender charges or adjustments. These charges generally decline each year and expire at the end of a specified number of years. If withdrawals are taken prior to age 59 ½, a 10% federal income tax penalty may apply.
Although some CDs may include interest withdrawal provisions, investors generally must wait until the CD matures to avoid early withdrawal charges.
Ask a trusted financial professional
Remember, not every conservative savings vehicle is the same. Fixed annuities offer many of the same features that make other conservative products so popular. In addition, fixed annuities offer other unique advantages that may be beneficial to you. Your financial professional can help you to choose the vehicle that best meets your retirement income objectives and investment needs.
© 2010 Massachusetts Mutual Life Insurance Company.
* Guarantees and payment of lifetime income are based on the claims paying ability of the issuing company.
Annuity products are issued by Massachusetts Mutual Life Insurance Company, Springfield, MA and its subsidiary, C.M. Life Insurance Company, Enfield, CT.
CRN201112-128691
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