We tend to want to focus on investment growth opportunities, particularly when the markets are performing well. However, you should consider what asset protection strategies you have in place, particularly if you’re retired or nearing retirement. The following are a few worth considering.
Insurance protects big-ticket assets like your home and cars, and most people carry these policies throughout their lives. When it comes to life insurance, many people let their term policies lapse once children are grown. However, if properly structured, a life insurance death benefit is generally distributed income tax free. They are taxable as part of an estate, but with the current estate tax exemption at $5.45 million, most estates don’t owe federal taxes when owners pass away.1
Diversifying assets is considered one of the most effective ways to help grow your retirement assets and to protect a portion of your portfolio from substantial losses over time. When the stock market increases, the bond market usually goes in the opposite direction – and vice versa.2 To enhance diversification and help maintain a more balanced return on investment, consult with your financial advisor about a well-diversified mix of financial products. It may help to re-assess your asset allocation to ensure alignment with your current financial goals.
Did you know that IRA funds are generally protected from bankruptcy creditor claims? There is a cap for this protection, which was increased to $1,283,025 in April, but the limit only applies to IRA tax-year contributions and the earnings on those contributions. This protection also extends to amounts rolled over to an IRA from an employer retirement account.3
Another way to help protect assets is to keep them in the family. You can gift up to $14,000 a year per person, which will not be subject to income taxes by the recipients. You can also gift even more than that, tax-free, if you do so by paying for college tuition or medical expenses for someone else.4
Life insurance policies are contracts between you and an insurance company. Life insurance product guarantees rely on the financial strength and
claims-paying ability of the issuing insurer.
We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation.
1IRS. June 22, 2016. “What’s New – Estate and Gift Tax.” Accessed Aug. 18, 2016.
2 Kimberly Amadeo. The Balance. Sept. 8, 2016. “How Bonds Affect the Stock Market.” Accessed Sept. 12, 2016.
3Sarah Brenner. Ed Slott and Company. March 9, 2016. “Is Your IRA Protected From Creditors? You May Be Surprised.” Accessed Aug. 18, 2016.
4IRS. May 12, 2016. “Frequently Asked Questions on Gift Taxes.” Accessed Aug. 18, 2016.
It can be difficult to make financial decisions without access to information. If you have questions or concerns about your current retirement strategy, feel free to contact us using the form below.
Strategic Wealth Designers, LLC is a Registered Investment Advisor in the states of Kentucky and Indiana. Matt Dicken, Dustin Stanley and Jordan Schwartz are Investment Advisory Representatives affiliated with Strategic Wealth Designers, LLC. The advisors may not transact business in states where they are not appropriately registered, excluded or exempted from registration. Individualized responses to persons that involve either the effecting of transaction in securities, or the rendering of personalized investment advice for compensation, will not be made without registration or exemption.
*Guarantees provided by insurance products are backed by the claims-paying ability of the issuing carrier.
The retirement kit is provided for informational purposes only. It is not intended to provide tax or legal advice. By requesting this report you may be provided with information regarding the purchase of insurance and investment products in the future.