The Guinness Book of World Records establishes an achievement based on documentation. Their documentation is rooted in a scientific process of collecting of data. Currently, Guinness has declared Jeanne Calment as the oldest person to ever live in modern times. But an Indonesian man named Mbah Gotho has Indonesian documentation that states he died at 146 years old. But that documentation is not acceptable to Guinness, so when and until creditable evidence emerges Jeanne is the longevity queen. But for billions of Christians around the world Methuselah has the record for the oldest living human of all time at 969 years old and its documentation is the Bible and more specifically the book of Genesis. Guinness doesn’t recognize Genesis, so Jeanne is still the poster child of human longevity and in comparison, to Methuselah she was just a child at 122 years old. The living and reigning champion of the geriatric set is Jamaica’s Violet Brown at 117 years old. That makes her a centenarian teenager! But recently America’s “Old Suzanna” Jones died at 116 years old and she was not only a centenarian teenager, she was a tri-centurion born in 1899  These may be outliers and anomalies in the   Read more…

Cash Value Life Insurance designed as a Non Modified Endowment Contract (non MEC) can generate tax-free collateralized policy loans and withdrawal of basis tax-free as long as the policy is kept in force for the life of the policy insured. Therefore cash value life insurance in this scenario is a life-long buy and hold position, beyond the traditional long-term horizon timeline. There are four types of cash value policies to choose from based on your risk tolerance and product suitability for your financial goals: Participating Whole life, Universal Life, Indexed Universal Life and Variable Universal Life. The crediting methods for each policy type have advantages and drawbacks. You should seek out an insurance professional who understands the rules of engagement to generate tax- free income from these types of cash value polices. Home Equity Conversion Mortgage (HECM) is an FHA insured HUD program for seniors over age 62. HECM has several options to choose from in using home equity. One of those options is tax-free income from collateralized equity loans from your home, which can generate a lump sum or an annual payout. The payout schedule can be for a limited time as an income strategy to delay Social Security   Read more…

Health Savings Accounts are the most under utilized tax advantaged funding vehicle available for tax-deductible contributions up to $3,550 for individuals, $7,100 married couples and an additional $1,000 for those over age 55. The IRS also allows a one-time maximum tax-free transfer of $7,100, (or $8,100 if you’re age 55 or older), once in your lifetime from an IRA to an HSA account. Keep in mind that you can’t transfer and make an annual contribution in the same tax year. The tax-free distributions from the HSA account can only be used for medical expenses and insurance premiums for long-term care, disability, medical and Medicare. One huge benefit is the ability to use your HSA account at any time. There’s no waiting until age 59½ like other qualified retirement accounts. The distributions are tax-free and are not includable in the provisional income test for Social Security. The odds are that you will use this account throughout your lifetime for medical expenses and related insurance premiums. Roth IRAs are not tax deductible, but they accumulate tax deferred and distributions are tax-free and are not includable in the provisional income test for Social Security benefit taxation. The maximum annual contribution for individuals is   Read more…

The largest block of retirement savings in America is in ERISA qualified defined benefit and defined contribution plans: totally tax deductible. But as a consequence of using an ERISA plan comes the loss of recoverable basis. All ERISA qualified plan income is taxed at ordinary income rates and is included in the provisional income test for Social Security benefit taxation. Taxes are the number one expense in retirement and can erode the cash flow necessary to meet essential retirement spending as well as restrict discretionary spending, i.e. no fun money. To combat the present 20 trillion dollar debt and 60 trillion in future obligations, taxes must go up and that’s not factoring in any budgetary spending increases. It is inevitable that Millennial retirees will pay a significant portion of their retirement plan dollars and Social Security benefits to taxes, perhaps up to 40%!  None of this includes the true cost of living that could impact the purchasing power of your retirement dollar. The qualified plan trap will ensnare many unsuspecting seniors fifty years from now. Many Millennials are convinced there must be a better way. And they’re right.  There are some little-known tax favored funding vehicles that you can take   Read more…

The Millennial generation sometimes appears conflicted. They voted for Obama but would rather pay the penalty and not participate in Obamacare. Many Millennials love the socialism of Bernie Sanders but are as materialistic as their Baby Boomer parents. The Millennial generation believes in pro-government programs, but they also believe they will receive little to nothing from Social Security. The Millennial generation is just now discovering that they are going to be saddled with the 20 trillion dollar burden their parents racked up over the last generation and are coming to the conclusion that they are going into retirement all on their own. In the 2015 LIMRA Secure Retirement Institute Study, 70% of Millennials don’t know what funding vehicle to use for retirement. Most just follow the same retirement methods of their Baby Boomer parents. 40% of Millennials save only 10% of their income. And that’s not necessarily targeted for retirement. Keep in mind with Millennial tuition debt exceeding one trillion, most can’t secure a mortgage with that kind of debt, much less think about a retirement plan 30 to 40 years from now. And that’s because they’re living in the now and the present presents its own monetary problems. The   Read more…

Many seniors have plans to take up hobbies, sports and volunteer activity to enjoy the time they’ll have in retirement. But every senior should take up a little course on taxes and learn how to game the system. Surprisingly, retirees are shocked to learn that the government is their retirement partner and it wants its share. Over your retirement years, the accumulated taxes paid throughout retirement will be the biggest expense in your golden years. It can be disheartening to discover that state and federal taxes can deplete your assets faster than any other risk in retirement. So taxes in your senior years can turn your retirement dreams into a nightmare. The first thing you need to understand is the effective tax bracket or blended tax rate that you pay. Secondly, you need to take inventory of all your income resources and categorize them by their tax status, i.e. taxable, tax deferred and tax-free. You may be able to construct a strategy that can lower your tax bill and, in turn, increase your spendable cash flow. For most consumers, learning the basics of taxation is well within their learning capacity. Many retirees can increase their monthly income by 10 to   Read more…

There are four retirement vehicles that can generate lifetime income: A defined benefit plan, reverse mortgage, Social Security and a lifetime income annuity. The law of large numbers and changing demographics of life expectancy is having a significant impact on guaranteed lifetime annuities. Annuity manufacturers are touting their alpha with mortality credits and receiving newfound interest among financial advisers to solve the longevity risk in retirement. There is no other financial product that can guarantee lifetime income except annuities. As an individual the average male lives 86.6 years and the average female lives 88.8 years. The surviving spouse in a marriage averages living to age 93.  87% of the time the surviving spouse is a female. Half of all Americans will live longer than those averages.  If the surviving spouse average is age 93 that’s 31 years from age 62, which is the starting age for many guaranteed lifetime annuities. So the average internal rate of return for lifetime annuities is benchmarked at age 62 for 31 years. Those returns could be somewhere around 3% net of all product expense loads. It could be 4% plus, if those at age 93 live to age 100. How can annuity manufacturers guarantee   Read more…

Your financial statements are crying.  They are so sad!  They have so much information to share with you but they don’t know how to get through to you because they speak a different language than you do.  They speak accounting and numbers, and numbers are your very least favorite things to look at – unless they are BIG numbers in your bank account! If you’re like most small business owners, you have never taken an accounting course.  This means that you’re running your business with one hand tied behind your back.  When you started your business nobody told you all the extra skills you would need to be successful – accounting being one of several.  How can you possibly understand your financial statements with little or no accounting education? Think about your financial statements as a series of stories.  Chapter 1: The Income Statement (Profit & Loss). In fact, they are the history of your business. Financial statements also tell how much your business is worth. Chapter 2: The Balance Sheet. It may be lower than you’d like, but at least you know your real numbers. Financial statements also remind you where you receive money and where you spend it.   Read more…

Budgets.  They are like New Year’s Resolutions – everyone makes one but nobody follows it. You might create a budget with all the best intentions.  This year will be your Best Year Ever! And when you miss your first goal or monthly target you shred the budget in disgust, thinking all is hopeless.  Ok, so maybe this is a little dramatic.  It might take you two months before you shred the budget document… It is just a matter of perspective on how you look at this business tool.  You can look at it as a “report card” with a passing or failing grade.  Or you can look at it as a road map that illuminates high points and bumps in the road.  Which perspective would you rather hold? When you create a budget, it is important to actually write it down. Just keeping it in your heads means you are avoiding making a commitment. Keeping the numbers in your head means nobody knows what your plans are, so nobody knows if you’ve succeeded or failed and they can’t judge you.  If you write the numbers down, it can be the ticket to growth because the budget will give you a   Read more…

The reminder to do your accounting comes up every month. You hit “delete”.  You just can’t face that growing pile of billings and expense receipts right now!  All too soon it’s April and you’ve done no bookkeeping at all.  This time, as you lock yourself in your office to finally tackle the job you swear you’re going to hire a bookkeeper and get this task off your plate for good. But where do you start?  How do you find someone you can trust?  How much will it cost? How do you know if the numbers are right? News flash!  Not all accountants do taxes!  They can do bookkeeping, prepare financial statements, perform audits, create budgets and determine product costs/pricing as well as taxes.  Ask for their areas of expertise. Who you hire depends on the tasks you want done.  Here’s a guide to four choices in getting that accounting task off your plate. A Bookkeeper is your data entry specialist.  The bookkeeper generally performs basic tasks like paying bills, creating customer invoices, and reconciling bank statements.  They may or may not have an accounting degree, and typically their fees are on the low end of the scale.  An Accountant generally   Read more…