Life insurance is often presented to older, successful investors as a means of saving additional money for retirement. But is this a good option for you?
First, it’s important to understand how life insurance works. Traditionally, you buy a policy for its death benefit.
In other words, it is designed simply so that it will pay a sum to your loved ones upon your death. That sum will cover lost income and/or end-of-life expenses.
But life insurance can also be used for retirement planning.
When it’s working as it should, you buy a policy with underlying investment vehicles, and the cash builds up over time.
Eventually you reach a point where you no longer need to pay premiums. Then, when you retire, you can withdraw cash from the policy in the form of a tax-free loan – a loan you never have to repay.
When you use life insurance for retirement income, the only consequence is a reduced death benefit. Which, depending on your circumstances, you may not be concerned with.
This approach can work for many individuals, but success isn’t guaranteed.
The underlying investment vehicles might not perform as well as expected. And if you go about it the wrong way, your withdrawals can trigger a tax penalty.
So before using life insurance this way, you may want to ensure you’ve exhausted other alternatives first. Have you fully funded all available qualified retirement plans, such as 401(k)s and IRAs? Have you looked into an annuity?
If you do want to consider life insurance as a retirement-savings tool, it’s a good idea to talk to your advisor before you do.
He or she can help you investigate the quality of the underlying investments in the policy you’re considering, ensure that you understand the fees, and monitor the policy for you to ensure it’s performing as intended and that there are no undesired tax events.
Kitchen Talk: A Fun, Easy Way to Connect with Your Kids
For many parents, it can be difficult finding time to spend with their children.
But there is one easy and inexpensive way for parents to connect with their kids in a meaningful way: in the kitchen.
When parents and children cook together, the shared experience can be special. Older children feel valued when asked for their input around the stove, and, for the very young, an invitation to help out in the kitchen will make them feel like a “big kid.”
You can even use baking as an opportunity for kids to learn, in a very real way, about fractions and measuring.
Building memories is as important as learning how to peel vegetables or dress a salad. While it can be especially difficult for parents to connect with their teenage children, dinner prep can help them develop skills that will stand them in good stead when they move out.
As one now-grown tween said: “I knew that someday I’d need these skills. And I still remember cooking with my mom.”
Following are some suggestions for kids’ tasks, ranked from beginner to expert: washing produce and mixing for the beginner; chopping, boiling, and following a recipe for children with some experience in the kitchen; and for your chef-to-be, well, take a chance on letting him or her experiment with tweaking recipes.
Working together in the kitchen is fun; so is eating the results together. Sure, they’ll make mistakes, but aside from overcooked vegetables, you have nothing to lose and everything to gain. And so do they.
Forget Cleaning Marathons: Divvy Up Your Tasks
A home that is always squeaky clean and organized is everyone’s dream. But sadly, when you do find the time to tidy and scrub, the mess seems to come back within 24 hours. Experts say the trick is not to do a big cleaning every few months, but to divide and conquer. Do some tasks daily, some weekly, and some monthly.
Make the beds in the morning. Sweep the kitchen after dinner. Wipe down kitchen and bathroom counters. Before bed, the whole family should do a quick survey of their bedrooms and the living areas, and put their own items back.
Once a week
Once a week, give your house a wipe-down: dust surfaces, clean mirrors, and wipe cabinets and the fronts and handles of appliances. Scrub the toilet bowl and clean the shower walls with a squeegee. Vacuum and mop all floors.
Once a month
Once a month, set aside time for a thorough cleaning. Wipe the tops of shelves, baseboards, etc. Clean out the fridge and freezer; check expiration dates on items and throw away anything moldy. Vacuum upholstered items and turn mattresses over.
Once a year
TidyMom.net suggests you assign yearly chores to certain months. For example, this month (April) wash windows both inside and out. In January, clean out medicine cabinets and check medicines’ expiration dates. Clean hard-to-reach spots (like behind heavy sofas and appliances) in February. In August, sort through drawers and closets. Wash your walls in September. And before each new year, go through all your personal files, sorting and organizing receipts and tax forms.
While this may sound just a bit too organized, consider the alternative. With this checklist, you’ll have a more pleasant and healthier environment for you and your family. And there’s a bonus: getting the kids involved teaches them some good life lessons for the future.
Offset Increased Drug Costs by Shopping Smart
Drug costs are rising – recently the cost of Medicare Part D prescription drug plans increased by 8 percent – but controlling the cost of medications can help offset these premium increases.
The first step is to talk frankly with your doctor, who may not know your financial situation. Explore your drug cost options, including a switch to a generic drug.
If you’re on specialty drugs, your doctor may have coupons for them. Also, many manufacturers of high-cost drugs offer a co-pay waiver plan. Ask your doctor, who also may be able to contact the manufacturer directly on your behalf.
Your health insurer may offer or require use of their partner mail-order pharmacy. When you’ve ensured the medication works, order a 90-day supply to save money.
If you shop at a drugstore, the cost can vary: shop smart with online help and don’t be shy about asking for cash discounts at your local pharmacy.
Many stores offer a reduced price through a membership card, and the Consumer Reports website has an online tool to compare drug costs. Individuals on Medicare with extremely low incomes may qualify for Medicare’s Extra Help program, which reduces their drug spend.
One of the best ways to cut drug costs on Medicare is to shop your prescription drug plan during open enrollment. Plan to consult your insurance agent before the busy open enrollment season next October. Your agent can help you compare your drug costs by plan so you can make the best choice for the medications you’ve been prescribed.
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