Growing your estate without undue market risk and taxes
Often we see older investors shift gears near retirement and beyond. Many become risk-averse and move their assets into fixed income type investments. Unfortunately, this often results in the assets being exposed to higher rates of income tax and lower rates of return – never a good combination.
Or maybe the older investor cannot fully enjoy their retirement years for fear of spending their children’s inheritance.
The Estate Bond financial planning strategy presents a solution to both of these problems.
How does it work?
- Surplus funds are moved out of the income tax stream and into a tax-exempt life insurance policy.
- Each year a specified amount is transferred from tax exposed savings to the life insurance policy.
Many investors over the age of 60 find themselves in a quandary regarding investments that they intend to leave to their heirs. The primary concern involves the desire to conserve the investments they are bequeathing while at the same time earning a reasonable rate of return. As we all know, the volatility of the equity markets can be cruel and this can be most detrimental when investments do not have time to recover after a downturn. As a result, many mature investors choose to accept low rates of return in order to avoid loss in the funds they wish to leave to family members.
If you share these concerns, then Segregated Funds (also known as Guaranteed Investment Funds) may be the solution. Segregated Funds are similar in performance and cost to Mutual Funds but come with some very attractive advantages. Since Segregated Funds are offered by life insurance companies, they contain guarantees both at maturity and at death. Read more
When it comes to most forms of insurance, many people understand the importance of having coverage. Whether it’s your car, your home, or other valuable possessions, having insurance means that you’re financially protected should disaster strike. One of the first things you do when you buy a new car is to make sure it is protected before you drive it off the lot. Why? Because if you are involved in an accident chances are good you would suffer financially.
But, what about life insurance?
Although this form of protection works the same way as all other types of insurance, many are reluctant to open the conversation. Perhaps one reason is that life insurance involves the planning for the worst-case scenario – your death. The truth remains however, that if someone, your family or your business for example, would suffer a financial loss due to your death, life insurance is the answer. In fact, life insurance is one of the smartest ways to provide for both yourself and your loved ones.
For today, take stock of your current situation and consider these important reasons why life insurance is needed: Read more
Now that the kids are out of the house, you should be shifting your focus on retirement. Since your money isn’t going towards feeding, clothing, and supporting your children (hopefully), you should be figuring out the best way to maintain your quality of life once you retire.
One of the biggest variables in this scenario is the fact that it’s impossible to know how long your money will have to last. Whether it’s 20 years or 40 years can make a huge difference, particularly if you’re not earning money from various investments.
With that in mind, we want to discuss how retirees (and soon to become retirees) can use insurance to help provide for their health and well-being well into their golden years. You don’t want to be left in the lurch because you failed to plan. Here’s what you can do. Read more
The total net value of your estate represents what you will leave to your family when you die. It may include the following:
- Your residence;
- Cottage or other recreational property;
- Investment real estate;
- Stocks, bonds, mutual funds and commodities
- Life insurance;
- Any other assets you wish to leave to your heirs.
After paying off any liabilities, taxes arising at death, last expenses etc., what is left over is what your family will use to maintain the lifestyle that you created for them.
Two easy ways to make sure debt and investment losses do not impact the estate you leave for your family Read more