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  • Home
  • About Us
    • Meet our Team
    • Client Testimonials
    • Refer a Friend
    • Insurance Carriers
  • Blog
  • Service
    • Policy Review
    • Update Contact Info
    • Life Insurance Application
    • Request a Free Consultation
  • Individual
    • Life Insurance >
      • Term Life Insurance
      • Whole Life Insurance
      • Final Expense Insurance
      • Individual Life Insurance
    • Medicare
    • 529 Plan Alternatives
    • Social Security
    • Disability Income Insurance
    • Annuities
  • Business
    • Life Insurance Options for Businesses
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our Blog

5 Things about Social Security You Probably Didn't Know

3/5/2021

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Social Security is the backbone of most retirement plans, but there are still a lot of misconceptions about it. If you don’t understand Social Security in its entirety, or have unrealistic expectations for it, you could end up disappointed (and unprepared) in the long run. 

Below are the top five things about Social Security a lot of people don’t know. We hope that by clearing up this information, you can work with your financial advisor in NJ to create a robust retirement plan that meets your needs and goals. 

Social Security is not meant to be your primary source of income. 

Many people in New Jersey rely on Social Security to get them through their retirement years, but this isn’t what these benefits are meant for. Social Security was meant to replace about 40% of pre-retirement income for average earners. The purpose of this money is to cover necessities rather than an entire lifestyle. 

Heard that Social Security is going bankrupt? Changes are being made to prevent this from happening. 

It’s estimated that the Social Security trust fund reserves will be depleted by 2034. Fortunately, the government is working on making changes to the program to prevent this from happening. While nothing is set in stone, several solutions have been proposed such as: 

  • Raising the full retirement age 
  • Raising the amount of income subject to Social Security tax 
  • Raising Social Security tax 
  • Reducing cost-of-living adjustments 
  • Reducing benefits 

The age you start taking your benefits makes a difference. 

Many people are surprised to learn that the age they start taking their benefits matters. You become eligible for Social Security at 62 years of age, but you won’t receive your full benefits until you are 66 or 67, depending on the year you were born. If you start taking your benefits at 62, you will receive reduced payments. If you want to maximize your benefits, it’s best to wait until you’re closer to full retirement age. 

Social Security is more than a retirement program.

Aside from providing retirees with supplementary income, Social Security also supports veterans, widows and dependent children of deceased or disabled workers. If you believe that you are eligible for any of these benefits, contact your local Social Security office. This program can be used strategically for various situations. 

The average Social Security benefit is $1,503 (in 2020).

For the average American, receiving a monthly check from Social Security leaves them with just $18,036 in annual income. That’s only about $5,000 above the federal poverty level for a single person - and certainly not enough for most retirees to live off of. Most financial experts suggest having 70% to 80% of your final salary to maintain your quality of life. This is why saving for retirement early on is crucial. 

Are you surprised by any of these Social Security facts? To learn more about your benefits, when to take them and how to continue saving for retirement, contact Leonard Financial Solutions today. 
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How Can I Start a Retirement Plan?

3/4/2021

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Are you ready to start saving for retirement? Knowing where and how to start is overwhelming for most people. But unless you are independently wealthy, you’ll need to build a retirement fund. The Social Security Administration says Social Security benefits are expected to be depleted in 2034, so it’s unclear how well these benefits will cover the cost of living. 

Fortunately, you can start a retirement plan pretty easily these days. Working with a financial advisor in New Jersey is helpful as they can help you create a retirement plan that reaches your needs and goals. In the meantime, here are some basic tips on starting a retirement plan.

Start Small 

You don’t need any more than $250 to $500 in savings to start a retirement fund. The key is to establish good habits that start preparing you for the future. There are many brokers that offer no-minimum, no-fee retirement accounts, so discuss these with a financial advisor who specializes in retirement planning in NJ. 

When you meet with your financial planner, you’ll go over what you have in your savings, how much you’ll need to retire comfortably and how much you can afford to put away each month. Don’t worry - a good advisor won’t ask you to scrape together cash for last-minute contributions. The best approach is to put a little away each month. 

Consider Your Investment Options 

When you know what you should be putting away every month, you can then choose the best avenues to reach your goals. If you have a 401k, take advantage of it. This account allows you to grow your savings without paying income tax upfront. 

If you don’t have a 401k, your financial advisor may recommend an IRA instead. There are two types of IRAs - Roth and traditional. You’ll probably benefit from one over the other. For example, people who are just starting their careers often benefit more from a Roth IRA. 

Build and Maintain Good Credit 

At Leonard Financial Solutions, we take a holistic look at our clients’ finances. Saving is important, but there are other things to keep in mind. We tell our clients to build and maintain good credit scores because this helps secure better loan rates and terms. This way, you’ll pay out less in interest rates and have more money to put toward retirement. 

Keep an Emergency Fund 

You should maintain at least a six months’ salary in a regular savings account. By having this money put away, you can make rational decisions when you’re faced with a crisis, such as a job loss or unexpected illness. Without these emergency savings, you’ll have to rely on credit cards or take out a personal loan, both of which make it harder to save for retirement. 

Saving for retirement starts with good habits. You do not need to be rich to start a savings plan. And with the uncertain future of Social Security benefits, it has never been more important to protect yourself. To discuss starting a retirement plan that makes sense for you, contact Leonard Financial Solutions today. 
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Tips for Starting a Retirement Fund in Your 20s and 30s

1/26/2021

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Financial security in retirement doesn’t just happen because you’ve worked hard all your life. It’s something that you need to plan for and work towards. This is a hard concept for a lot of young people because they’re not making a lot of money and struggling to pay their current bills. How can they save for retirement? 

The truth is that retirement planning in NJ doesn’t have to disrupt your quality of life. By putting away a small amount of money today, you can build up your savings, grow your financial security and retire when you want. Below are some tips for starting a retirement plan you can live with. 

Start Small, But Stick to Your Goals 

Saving money is a rewarding habit, so it’s important to make it a priority. Start small and try to increase the amount you save over time. The sooner you start saving, the longer you’ll have to grow your money. Ask our financial advisors in NJ about your options for no-minimum, no-fee retirement accounts. 

Know Your Retirement Needs 

Experts estimate that Americans need 70 to 90 percent of their pre-retirement income to maintain their current standard of living. If you’re not sure how much money you’ll need to retire, you can use a retirement calculator or work with your financial planner in NJ to get a better idea. As you get closer to retirement, these numbers will be more accurate. 

Contribute to Your Employer’s 401(k) Plan 

Many employers offer some type of retirement savings plan such as a 401(k) plan. Sign up for this plan and contribute what you can. Even though your paycheck will be smaller, your taxes will be lower, your company will kick in more and the deductions are automatic. You’ll be getting paid every month while putting money toward your retirement. 

Learn about Your Employer’s Pension Plan

Your employer may offer a standard pension plan as well. Ask for an individual benefit statement and speak with your financial advisor about whether or not this plan is right for you. There are pros and cons to using a pension plan to save for retirement. 

Put Money into an IRA

If your employer doesn’t offer a 401(k) plan, consider opening up an individual retirement account (IRA). You can put up to $6,000 a year into an IRA and even more if you are 50 or older. IRAs also provide tax benefits, allowing you to keep more of your money. There are two options for IRAs - a traditional IRA and a Roth IRA. Talk to your retirement planner about which one is right for you. 

Build an Emergency Fund 

Another important thing to do is create an emergency fund so that you don’t have to rely on credit cards or your retirement savings if something goes wrong. Ideally, you’ll want to have six months saved up, but anything is better than nothing. Setting up automatic deposits is the best way to ensure your money is going to the right places. 

You don’t need to have a high-earning career to retire rich. All you need is to start saving your money at a young age. This gives you plenty of time to grow your savings, make more aggressive investments and get used to automatic deposits. To learn more about retirement planning in New Jersey, contact Leonard Financial Solutions today. 
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New Year, New You: Why it's Never Too Late to Start Saving for Retirement

1/25/2021

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If one of your New Year’s resolutions is to save more money for retirement, rest assured that it’s not too late. Having enough money to retire is important for your physical and mental health, so even a few steps in the right direction can make all the difference when you do retire. 

Below are some of the best ways to start saving for retirement, even if you’re older than 50. Be sure to contact Leonard Financial Solutions for more ways to maximize your savings. With our retirement financial services in NJ, you can live comfortably and tax free! 

Increase Your 401(k) Contributions 

If your workplace offers a 401(k) or similar plan, now is a good time to increase your contributions if you’re not already doing so. Not only are these plans an easy and automatic way to invest your money, but also you can defer paying taxes on that income until you use it for retirement. 

Plus, many people earn the most money during their 50s and 60s, which can move them into a higher tax bracket. By putting money into your 401(k), you’ll pay out less in taxes. Each year, the maximum amount you can contribute changes. Currently, you can contribute up to $19,500 if you’re under 50 and up to $26,000 if you’re 50 or older. 

Consider Adding an IRA

If you don’t have a 401(k) plan available through your work, or you’re already funding yours to the max, you might want to consider adding an individual retirement account (IRA). The maximum you can contribute in 2021 is $6,000 and an additional $1,000 if you’re 50 or older. 

There are two types of IRAs: a traditional IRA and a Roth IRA. With a traditional IRA, the money you contribute is generally tax deductible upfront. With a Roth IRA, you get your tax break in the form of tax-free withdrawals. 

Be Aware of the Money Coming to You 

Don’t forget that you will have money coming to you when you retire - you’re not completely at the mercy of what’s in your savings accounts. For example, you might be getting a pension from your work. If so, be sure to request an individual benefit statement every few years to see what benefits you’ve earned. 

Also, if you contributed to Social Security for 10 years or more, you’re also eligible for Social Security payments. You can start collecting these benefits as early as age 62, though waiting until full retirement age will get you a bigger benefit. And if you can wait until 70, the benefit is even larger. 

Retirement can feel overwhelming, especially if you feel like you’re already living paycheck to paycheck. But, there are many ways to maximize what you have so that you can retire when you want. To discuss your financial standing and how to prepare for retirement, contact Leonard Financial Solutions today. 
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Retirement Planning: 3 Things Everyone Should Do

10/30/2020

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Retirement means something different for everyone. Maybe your dream is to retire on the beach, travel the world or spend more time with family. Whatever your passion is, you’ll need a nest egg and ways to protect it. Your savings will allow for fun things like dinners out and vacations, but you’ll also need this money to fall back on for healthcare, property taxes and other essentials. 

Being proactive pays off when it comes to retirement planning in NJ! Here are three steps you can take to ensure you are financially ready to retire. 

1. Determine When to Collect Social Security 

Most people can start collecting Social Security once they turn 62, but this isn’t necessarily the best option. If you collect Social Security before your full retirement age, you’ll only get a portion of your benefits. If you can wait until your full retirement age (around 66 years), it’s probably best. This way, you’ll get 100% of your benefits. 
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Of course, we realize that not everyone can wait that long to claim their benefits, nor is that the right decision for everyone. There are many factors that play into this, so it’s helpful to sit down with a financial advisor in NJ who can help you determine what’s best. The Social Security Administration website also has a handy calculator you can use. 

2. Know What Health Coverage You Need 

It’s likely that your health insurance will change when you retire. Medical bills can add up quickly, so make sure that you have the right coverage at the right time. Missing important deadlines can leave you without insurance for an extended period of time. 

Most people are automatically enrolled in Medicare when they turn 65 and get Social Security benefits. But in addition to Medicare, you may also want to consider supplemental insurance in NJ. Medicare supplemental insurance is private insurance that will help pay some of your remaining healthcare costs like coinsurance, copayments and deductibles.
 

Other options worth looking into are being added onto your spouse’s policy, participating in your employer’s retiree plan or obtaining temporary coverage through COBRA. 

3. Decide Who’s Going to Manage Your Finances 

When you leave your job, you’ll have several options for your 401K plan. For instance, you can leave your money in the account or roll it into an individual retirement plan (IRA). You won’t be taxed for moving your money over to an IRA and you may be able to grow your savings because you have more control for diversifying your investments. 
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In addition to your retirement account, you should also think about the funds in your Health Savings Account (HSA). You can use some of these funds to pay for your healthcare needs. Because this can be confusing, it’s best to work with a financial advisor in New Jersey who can gain a holistic picture of your retirement accounts and how to maximize them.

Leonard Financial Solutions is here to help you navigate your retirement planning! Contact us today for an appointment and let’s get the ball rolling on a robust wealth management strategy that will allow you to retire with confidence! 

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What are the Pros and Cons to Long-Term Care Insurance?

9/15/2020

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Is long-term care (LTC) insurance in NJ a smart investment? That’s the million dollar question! On one hand, long-term care insurance protects your retirement assets and picks up healthcare costs not covered by health insurance. On the other hand, an LTC policy is expensive and has a relatively strict qualification process. 

Purchasing long-term care insurance is a personal decision, but you are more likely than not to need it. Below our financial planners in New Jersey share the pros and cons to having an LTC insurance policy. 

What is Long-Term Care Insurance? 

Long-term care insurance covers long-term support services such as assisted living, adult daycare, respite care, hospice care, memory care, etc. These insurance policies reimburse you for long-term care costs, up to a predetermined limit. This way, you can get the quality services you need when you need them. 

Long-term care insurance is a great option for many people. But with high premiums, strict requirements and some limitations, an LTC policy may not make sense for everyone.

Pros of Long-Term Care Insurance 

Here are the advantages of taking out an LTC policy: 
  • Peace of mind. LTC insurance lets you seek the care you need without having to rely on family, giving you the ultimate peace of mind. 
  • You’re likely to need it. The American Association for Long Term Care Insurance (AALTCI) says that 68% of people who are 65 and older will need long-term care. 
  • Have options. If you do need assisted living one day, long-term care insurance gives you options. You can choose a high-quality facility and maintain your financial independence.
  • Tax free benefits. LTC insurance benefits are tax free. The monthly premiums are also tax deductible. 

Cons of Long-Term Care Insurance 

Some things to keep in mind about LTC are: 
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  • Expensive. Long-term care insurance is not cheap, and because it’s relatively new, pricing is a major concern. As your health changes, premiums may increase. 
  • You may not qualify. Between 15% and 20% of applicants are denied coverage. Some health concerns may also make your premiums higher. 
  • You may not need it. It’s possible that you may not ever need long-term care. As an alternative, the insurance industry is introducing hybrid plans that combine LTC insurance and whole life insurance in NJ. 

If you are considering long-term care insurance, schedule a consultation with Leonard Financial Solutions. Our financial advisors in NJ can help determine if this insurance is right for you based on your financial health. If we find that LTC is not the best option, we can suggest other solutions for long-term care planning.
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10 New Tax Breaks...and 10 That Went Away

6/5/2018

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In December 2017, lawmakers passed the Tax Cuts and Jobs Act (the “Act”), a sweeping tax reform law that impacts you.

First, let's start with three tax concepts that were left intact:
1. Tax-free death benefit of life insurance.  Your beneficiaries can receive life insurance proceeds
free from income tax with very few exceptions.
 2. Tax-deferred growth of life insurance cash values.  You can grow cash values in your life insurance policy
tax-deferred, making permanent life insurance a great part of your financial portfolio.
 3. Access to cash value without current taxation.  When properly structured, life insurance policy cash
values may be accessed through loans and/or surrenders to basis without current taxation.

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