These are the most common excuses I hear for NOT planning smart for retirement.

Reason #10: “I’m too busy”

I can’t tell you how often I hear this excuse. So many people want to plan for a better retirement, but they don’t have time. They think they’ll take care of it tomorrow or the day after that… and before they know it, several years have gone by. The best advice I can give you is to stop procrastinating and start planning today.

Reason #9: “It’s too soon”

I don’t know how this happened, but many people have adopted the notion that you don’t have to start plan-ning for your retirement until you’re almost there. This is totally incorrect. The truth is, the sooner you start planning, the better chance you stand of having the kind of retirement you want. It’s never too soon. Many people start planning in their early twenties!

Reason #8: “It’s too late”

If you’re already near or past your retirement eligibility date, you may think that whatever you’ve got is what you’re stuck with and it’s too late to do anything about it. Think again. If you’re unsure of what your options are, speak to a professional. Even if you’ve already retired, it’s important to consider how you’re receiving income and how long it will last. It’s never too late to revise your income distribution strategy.

Reason #7: “I don’t need to”

I’ve heard this excuse many times and it always baffles me. Many people think that because they’ve been diligent about contributing to a savings account, they’re all set. While saving for retirement is good, you also need a plan for income distribution once you enter retirement. Are you certain that what you’re saving will be enough? Have you considered your distribution plan? What about taxes? What about inflation? And are you sure your money will be properly invested? There may be other, better options for you and it may prove worthwhile to look into them.

Reason #6: “I don’t have enough money to get started”

This excuse seems marginal at first glance, but there is some truth behind it. You need to have money to save or invest money. However, unless your bills are exactly equal to or greater than your net income, you DO have enough to get started. Starting small is better than not starting at all, and if you plan well, you’ll eventually have more to work with.

Reason #5: “My finances are a mess”

This all the more reason to seek out an advisor who can help you sort through and understand your assets. Perhaps you have a 401(k) or several 401(k)s from former employers that has not been rolled over, a couple of savings accounts, a trust from a deceased relative, some stocks that your parents bought in your name when you were younger … a circumstance like this can be confusing, but leaving it as it is won’t improve the situation. Consider speaking with an advisor who can look at your complete financial picture, help you to understand it, and help you to develop a plan to make your “financial mess” work for you.

Reason #4: “The Government will take care of me”

The bottom line is this … there’s a chance Social Security may not be available when you retire, and even presuming it is, it may not be enough to provide your ideal retirement income. If you’re planning to retire on Social Security alone, I would advise you to create a back-up plan at the very least.

Reason #3: “Between my savings and my 401(k), I’ll be fine”

Saving for retirement without an income distribution plan can be a mistake. How will you use that money once you have it? And while you may think you’ll have everything you’re going to need, have you considered inflation? Taxes? And furthermore, some people are living past 90. Will your assets last that long? If you outlive your income, what then? It’s a good idea to look ahead and plan lifelong income.

Reason #2: “I don’t want to think about it”

Many people procrastinate simply because the thought of discussing financial matters (or growing old) is unappealing. I can certainly understand that. But consider this … if you bite the bullet now and put a firm plan in motion, you may not have to think about it again for quite some time.

Reason #1: “I don’t know how”

If you knew everything there was to know about financial planning, you’d probably be a financial advisor yourself. While it is possible to do everything on your own, that generally involves a great deal of research and a huge ongoing time commitment. If you’re putting off retirement planning because you don’t know how, consider speaking to an advisor at Joshua Cumrine Financial who does.

There are three parties to a life insurance contract. First, there is the insured. This is the person whose life is being insured under the policy. Next, there is the insurer. The insurer is the insurance company who underwrites the risk. And third, there is the owner. The owner and insured are not necessarily one and the same. Someone can buy a life insurance policy to insure the life of someone else, such as their spouse.

The person who buys the policy is the owner, and the person whose life the policy is based on is the insured. When the owner and the insured are different people, premium payments are the responsibility of the owner.

Every life insurance contract also has a beneficiary. This is the person who receives the proceeds from the policy in the event of the death of the insured, and is assigned by the owner. There are two types. An irrevocable beneficiary can not be changed unless the beneficiary gives his or her permission; if it is revocable, the owner can change it at any time.

The policy is subject to certain terms and conditions. There are usually certain exclusions that apply, depending on the person being insured. But with almost every policy, death as the result of suicide during the first two years of the policy term is excluded from coverage.

Also, during the first two years of the policy, often referred to as the contestable period, the insurance company retains the right to not immediately pay out, even if the death is caused by a condition that is covered in the policy. The company can order an investigation into the death of the insured, to make sure that the death was not deliberate or the result of homicide.

The amount paid to the beneficiary is called the face amount. The maturity date is reached upon either the date when the insured deceases or reaches a certain age. Life insurance is most often used to provide income protection to the spouse of the deceased.

Regardless of the reason for buying the insurance, the owner (if not the same person as the insured), must have an insurable interest. In other words, the owner of the contract must have a reason for wanting to insure the life of that person, otherwise the contract is void.

When the person covered by the policy dies, the insurance company requires proof of death before paying the claim. A notarized death certificate is the most commonly accepted form of proof. The benefit is paid out either as a lump sum or as an annuity that is paid out over time.

Any annuity can be a good way to receive the benefits. It is possible for the beneficiary to set up a lifetime annuity, which would guarantee that person a certain amount of monthly income for the rest of his or her life.

There are two basic types of life insurance, temporary and permanent. Temporary insurance is known as term life. An example of a term policy would be a 20-year term life, which means that the policy will pay a death benefit if the person dies within the next twenty years.

Permanent insurance includes whole life and universal life. Whole life provides for a payout no matter when the person dies, but premiums have to continue to be paid, usually right up until the insured reaches the age of 100. Universal policies are somewhat similar, but they allow for greater premium flexibility. Universal insurance is somewhat complicated; you should consult with an advisor at Joshua Cumrine Financial before buying it.

I hope this information has helped you become acquainted with life insurance. You should sit down with your spouse and talk about buying a policy. Then, call Joshua Cumrine Financial and make an appointment to discuss your objectives. Use the information that was presented here to help you make intelligent choices so your family will be protected in the event that something happens to you.

Most places of employment will offer a variety of retirement plans you can choose to make use of. Two commonly asked questions are whether a Roth 401(k) is the same as a Roth IRA retirement account and is either one better than a traditional 401(k) plan.  While there are significant differences, any type of IRA & retirement plan investing is a great idea; for the past 10 plus years the average American actually had a negative savings rate!

The Roth IRA

A Roth IRA and a Roth 401(k) are two very different savings instruments. Both have the same concept however. Basically, you make contributions to plan for retirement. There are no tax deductions for these contributions. Yet, upon your retirement, you can withdraw your contributions and additional earnings tax-free. While it would be wonderful to have a simple answer to these common questions, one type is not necessarily better than the other. It will greatly depend on your personal preferences and circumstances. The right choice for you will depend on your specific situation and expectations.

The Traditional 401(k)

With a traditional 401(k), the employee will contribute a specified percentage of their salary to a plan that is employer-sponsored. Many companies will make contributions to your account, and some companies will even offer a match of up to 100% of your contributions. No contribution that is made to the traditional 401(k) is counted as taxable income. All of the gains that are accumulated in the account are tax-deferred. Upon withdrawal, the amount is taxed as if it were ordinary income. The traditional 401(k) is similar to a traditional IRA account and account owners will have to begin taking withdrawals at age 70 1/2.

Roth 401(k)

When dealing with a Roth 401(k), the contributions that are made by the employer are kept separate. These contributions will receive the same tax treatment as a traditional 401(k).

A Roth IRA does not have a withdrawal requirement. You will never be required to make mandatory withdrawals from the account. Roth 401(k) accounts do have a withdrawal rule, and owners will be required to begin withdrawing when they reach 70 1/2. One way to avoid the mandatory withdrawal rule is to rollover the Roth 401(k) into a Roth IRA retirement account. Keep in mind that Roth 401(k) accounts are available to every worker, while Roth IRAs have an income restriction.

The Roth 401(k) plan has a maximum contribution limit. In 2009, the limit is $16,500. However, there is a $5,500 catch-up contribution that is allowed for workers who are over the age of 50. Combined, employees can contribute up to $22,000 per year into their account.

Contribution Limits: Roth IRA & 401(k)

IRAs have a very significant difference from a 401(k). With an IRA retirement account, the contribution limits are lower. This is because these accounts are not sponsored by your employer. For 2009, Roth IRA contribution limits are set at $5,000. Employees are allotted an additional $1,000 for catch-up, totaling $6,000 for the year if you are over 50. It is possible to have more than one type of retirement account. If you have an IRA and a 401(k), you can contribute the maximum amount to both accounts. Now, the question remains, what’s better, a 401(k) or a Roth IRA?

Choosing Roth 401(k) or Roth IRA

An analysis conducted by William Urban from Bingham, Osborn and Scarborough, indicates that the Roth 401(k) plan “might be the better choice for more people than commonly understood.”

The popular belief is that a Roth 401(k) makes more sense, especially if you are planning to be in a higher tax bracket upon retirement. The analysis showed that if your tax bracket falls in retirement years, the accumulation in the Roth might make that the better choice. This is usually the case if employees can afford to contribute the maximum amount allowed. Many times, younger workers are in the lower tax brackets. This minimizes the immediate tax benefits of the traditional 401(k), making the Roth fund a better choice. 

Regardless of your decision, going with any tax advantaged savings account is critical to save for retirement. More and more people file for bankruptcy because they did not have a large enough savings when a financial emergency occurred such as a sickness, loss of a job, or death in the family.

The price of a life insurance policy is a life insurance company’s calculation of the amount of cash necessary to gather from each member of the life insurance pool. The price is always dependent on the mortality tables and the calculation of the size of the risk the life insurance company is taking on by being the insurer of your life insurance policy.

2. How does a life insurance company assess their risk in insuring an individual?

When somebody applies for a life insurance policy, the company will inquire about their health status and often require a medical exam. The life insurance company will use information gathered to determine if and how they want to insure the individual.

This determination of “if” and “how” is referred to as “underwriting.” There are not many limits on the type of information underwriters can take into consideration.

3. Do all life insurance companies require a medical examination?

Often companies will require a physical medical examination prior to agreeing to insure an individual. Generally, they have a company doctor that will conduct this examination. This doctor or medical technician may have their own office or may even come to the potential insured party’s home for their convenience. The insurance company should not charge the potential insured party for this exam.

4. What types of questions will the life insurance company ask when applying for a policy?

It is common for life insurance applications to ask the following questions:

Do you regularly use tobacco or tobacco products? Life insurance companies strongly believe that smoking or using tobacco products in any form can make an individual’s life shorter and will charge higher premiums for smokers.

Do you have AIDS, cancer, heart disease, or are you HIV+? Depending on the severity of any health conditions such as these, a life insurance company may sell you a policy at the normal rate or possibly charge you a more expensive price. If the health problem is extremely severe, most life insurance companies will directly reject your application.

Do you have a hazardous career? With more dangerous jobs, companies tend to charge a more expensive price for a life insurance policy. If your job requires an above average amount of risky, life threatening behavior, expect a higher cost for life insurance.

Does your immediate family have a history of fatal diseases or death at a young age not due to an accident? The life insurance company is not barred from questioning you about you and your family’s health history. Diseases that commonly run in the family that are fatal, such as heart disease, Sickle Cell Anemia, or cancer may cause a company to reject your application or charge you a higher rate.

5. What other questions can I expect to be asked?

A life insurance application may ask seemingly unrelated health questions to asses high risk behavior.

Some of these questions may include the following:

In the past seven to ten years have you ever been arrested for driving under the influence? Diagnosed or medically treated for cancer, AIDS, HIV, chronic lung disorder, heart disease, diabetes, stroke, or liver problems? Recommended by a medical professional to cease or reduce drinking alcohol?

Are you currently or have you ever been disabled or forced to retire due to an illness or injury?

Answering “yes” to any one of these inquiries may result in getting a life insurance application denied, it is far better than answering dishonestly and then having a claim refused later down the line. This outcome could result in your beneficiaries getting nothing if you should die.

6. Can life insurance companies use genetic testing to determine whether or not they want to insure someone?

Life insurance companies often use genetic testing to learn as much as possible about their potential clients. By administering a blood test, companies can determine not only what diseases you may currently have, but ones you may get in the future as well. Some states do not permit this kind of testing for health insurance purposes, but generally for life insurance, genetic testing is permitted.

1. Income for Dependents
If people in your life depend on your income for financial support, having a whole life or term life insurance policy in place will protect them in the event of your death. Life insurance can replace your income for your dependents so they aren’t left bearing the financial burden of an income lost through death. This applies most often to parents with young children, but is also applicable to couples if the death of one spouse would leave the survivor financially stricken. If your parents, adult children, or siblings are your dependents, life insurance can also provide replacement income to benefit them. And, if your surviving spouse’s government or employer-sponsored benefits will see a reduction after your death, having life insurance to replace your income can definitely be useful.

2. Coverage for Final Expenses
Funeral and burial costs can be expensive, but your life insurance can cover the costs. Carefully planned life insurance will also provide funds to cover mortgages and other expenses. Debts and medical expenses not covered by health insurance can also be covered by your life insurance. Life insurance offers protection to the dependents you leave behind, since it can sometimes be utilized as a cash resource.

3. Create Inheritance
Life insurance can allow you to create an inheritance for your immediate relatives or heirs. Even if you don’t have any other significant assets to pass on to your surviving family or loved ones, you can create an inheritance by naming your heirs as beneficiaries in your life insurance policy.

4. Pay Estate Taxes
Rather than leaving your surviving family to take a smaller inheritance or do away with some assets, have a quality life insurance policy in place so the benefits can pay estate taxes. Life insurance plans provide tax free benefits that can be used to pay estate taxes and death duties.

5. Create Source of Savings
Your life insurance can become a sort of savings plan since some types of insurance can create a cash value that is available for withdrawal upon the owner’s request. Another benefit of this “forced” savings plan is that the interest credited is tax deferred, and if the money is paid as a death claim, the interest can be tax exempt (www.iii.org).

6. Make Charitable Contribution
By naming a charity as a beneficiary of your life insurance, you can make a larger contribution than if you donated the cash equivalent of your policy’s premiums. Donating a term life insurance policy allows you to deduct the cost of the premiums from your taxes. And, if you donate a whole life policy, you can deduct the cash value of the policy and the cost of the whole life insurance premiums. In both cases, after you die, the charity you select gets the insurance policy proceeds.

Plan ahead and ensure that you have a quality life insurance plan in place to protect your family.

Savings Plan: Common sense calls for one. Decide what portion of your earnings you would like to save for needs like a college fund for your children, your own house, a health plan to meet any emergencies etc. The idea is not to reserve funds for every possible event, but to ensure that the inevitable is provided for, while also gearing up to deal with surprises.

Wealth Management: Follow a simple strategy – examine your spending, reduce your debt, save, invest in tax deferred savings, determine your long term goals and assess your risk tolerance. Diversify your investments and employ techniques such as ‘dollar cost averaging’ which will reduce impact of market fluctuations. If you have debts outstanding, then managing them is vital to comprehensive financial planning. We recommend to find all the information you need about managing loans of all kinds.

Tax Plan: Taxes often change with successive governments. You cannot foresee all changes, but stay alert to news of tax increases, cuts and exemptions. If you are smart with your moves, taxes will never get the better of you. Tax planning is important both from a personal and business point of view.

Retirement Plan: Start early, plan ahead, invest accordingly. Consider options like an Individual Retirement Account (IRA); if you’re switching jobs, rollover your pension fund from the previous establishment and most important, resist withdrawing prematurely. Look at the product line of to know all you need about the 401(k) rollover plan and other retirement schemes.

Cash Management: Holding on to your cash to meet unforeseen expenses and current obligations, or maximizing investment in liquid instruments may offer comfort, but cash at hand is an idle asset which earns nothing. Good cash management involves accurate budgeting and forecasting of cash flows, borrowing short term when required and investing surpluses as they arise. This applies equally to business. Create a trading budget covering sales, production, material, labor and other costs. Optimize cash flow by balancing credit terms on sales and purchases, financing working capital expenditure and making adequate provision for taxes. Bank overdrafts and short term loans could be used to raise additional funds when needed.

Estate Management: Managing your property investments well is crucial to good financial planning. Although the type of property may differ, depending on whether it belongs to you or the business, you should still look at it as a financial asset. Critically analyze what it cots you to maintain, and whether you can make an income from it, such as leasing it out. Unless it’s a home that’s been in the family for generations, you should always keep your options open to selling property when the market is on a high. Again, wait for cyclical downturns before making a purchase. And finally, ensure you have insured your property against the usual risks. Books on could help clear all your doubts about the legal aspect of managing your estate finances.

Investment Advice: Experts don’t exist for nothing, use ‘em. A diverse financial portfolio is pivotal to comprehensive financial planning. Managing such a portfolio on one’s own is tough. This responsibility should be entrusted to reputed investment advisors who could manage your portfolio, diversify investments, minimize risks and most importantly, personalize it to suit your financial goals.

Risk Management: This is a crucial aspect of comprehensive financial planning. Everyone is looking to maximize returns, and therefore, will have to deal with the higher risk. Making allowances for losses on investments is an absolute must in the financial planning process, whether it is for an individual or a company. A diverse portfolio including stable investments like government securities and other risk weighted options will optimize the risk versus return equation. For risk management solutions refer to

Comprehensive financial planning, as you can clearly see, requires you to examine every aspect of your finances, be it your personal expenses, those of your enterprise or your dependants. Paying close attention to these details will reflect in your finances.