Overtime everyone has certain stages in their life when their lifestyle changes. Planning ahead for these events can ease financial stress and no event requires more planning than your retirement. This is what we strive to help you with at Orlando Insurance Advice

According to experts, people nearing the retirement stage of their life should give much more attention to matters they have put of, or forgot to consider such as health coverage and investing in a group of assets to protect their income and ensure their savings will last throughout their retirement.
The following information briefly touches some important things to consider when beginning your retirement planning

Health Coverage
The vast majority of people age 65 and older think of medicare as being their health coverage. However, even with Medicare, expenses such as coinsurance, deductibles and co-payments can be a great financial burden. This is why millions of Americans are now participating in some sort of medicare supplement insurance policy to cover the holes in their coverage. This insurance can work to automatically process claims taking the burden off of the participants themselves.
Guaranteed Sources of Income
Once your paycheck is gone, retirees often find themselves missing the steady income they used to receive which payed their fixed expenses. This is were a single premium immediate annuity can help. Annuities are a form of insurance that can guarantee a source of income for the rest of your live. Some even allow you to take advantage of the growth in the market while also protecting your savings if the market were to crash. Many people see their 401k as all they will in retirement but what happens when that money is gone or they live longer than expected? This is where an annuity can come in handy.
Asset Protection
Long-Term care needs are another important factor in planning for retirement. With the dramatic increases in life-expectancy over the past 30 years, so arises the likelihood of needing some sort of long-term care insurance. Cost increases within the healthcare industry are astronomical and still continue to rise each year. Making the option to self fund these services with your assets can have a negative effect and even deplete your retirement savings. Long-term care insurance protects you retirement and assets so you don’t have to sit there and watch everything you worked so hard for just be blown away.

If you have any questions or would like to begin the planning process, click here

If you are changing jobs, planning to retire or about to exit Florida’s Drop Program and have a 401(k)  retirement plan at work, you generally have 4 options for that plan.

1. Leave the money in the old 401(k) plan.

2. Move the money to your new companies 401(k) plan

3. Withdraw the money

4. Roll the 401(k) into a IRA in your name

If you have any questions on these options please read further or click here to have a free consultation with a Orlando Insurance Advice Rep.

Benefits of Rolling Your 401(k) into an IRA

When you leave your company, what happens to your 401(k)? Depending on a variety of factors, pay out of your 401(k) account balance shortly after your separation from service may be required. You then have the option to roll the account over to an IRA, new employers qualified retirement plan or to take a lump sum distribution. When thinking about these options, consider moving your account into a rollover IRA. Whether retirement is around the corner or many years away, rolling your 401(k) into an IRA offers you a number of benefits listed below:

Postpone paying taxes and penalties.

Taking a lump sum distribution from your company’s 401(k) plan can be very expensive. Taxes are payable at your income tax rate and a 10 percent federal penalty may apply if you are under the age of 59 1/2. Lump sum distributions do provide cash but can be very expensive. A Rollover IRA gives your retirement plan assets the ability to continue to grow tax-deferred. You will also avoid having 20 percent withheld for income taxes, potentially paying income taxes by not taking a cash distribution.

Widen Your Investment Choices

You have more investments to choose from in your own IRA, not just those available to you through your company’s plan.

Extend distributions over the life of your designated beneficiary

Some 401(k) retirement plans severly limit the number of years for the distribution of benefits to a deceased employers beneficiary. As of January 1, 2010 however, all qualified retirement plans are required to offer spousal and non-spousal beneficiaries the opportunity to make a direct rollover of an inherited plan acount balance to an inherited IRA from which strech distributions can occur.

Combine Retirement Assets

Use a rollover IRA to consolidate all your retirement investments into a single account. It can be confusing at times keeping up with paper work from a number of differernt accounts, this eliminates the problem.

Keep contributing

While you can no longer contribute to your former employers 401(k), you can make contributions to your Rollover IRA assuming you have an earned income and are under the age of 70 1/2. Contributions of up to $5,000 a year may be possible. If you are age 50 or older, you can contribute an extra $1,000 for a total of $6,000. Should your new employer offer a 401(k) plan, you can contribute to that plan while also contributing to your IRA.

For many investors, investing typically begins with one stock or mutual fund. Over time, other selections are added because many people understand it may not be prudent to invest everything in a single security, even if it has a “blue chip” reputation. However, just “spreading money around” in a haphazard way may create only an illusion of diversification.

If you have assembled a “hodgepodge” portfolio, you may not know the extent to which your investments are (or are not) consistent with your objectives. How do you go about setting up a framework which tailors your investments to your particular circumstances?

A sound portfolio management strategy begins with asset allocation – that is, dividing your investments among the major asset categories of equities, bonds and cash. Since each type of investment category has unique characteristics, they rarely rise or fall at the same time. Then, you can make finer distinctions within each asset category (i.e., diversification). Combining different asset classes could help reduce risk, although it doesn’t eliminate market risk altogether. Still two nagging questions remain: What factors guide the asset allocation process? How much of a portfolio should go into each category.

To answer the first question, the main objective of asset allocation is to match the investment characteristics of the various investment categories to the most important aspects of your personal investment profile – that is, your tolerance for risk, your return and liquidity needs, and your time horizon.

Investing according to your risk tolerance will help keep you from abandoning your investment program during times of market turbulence. One way to measure your risk comfort zone is to ask yourself how much of a loss in a one-year period you could withstand and still stay the course.

Finding an appropriate match for you means balancing your tolerance for risk against the different volatility levels of various asset classes. For example, if you have a low tolerance for risk, that fact may dictate a portfolio that emphasizes conservative investments while sacrificing the potentially higher returns that usually involve a greater degree of risk.

Return need refers to the income and/or growth you expect a portfolio to generate in order to meet your objectives. For example, retirees may prefer a portfolio that emphasizes current income, while younger investors may wish to concentrate on potential growth.

Your personal time horizon extends from when you implement an investment strategy until you need to begin withdrawing money from a portfolio. For example, a very short time horizon (less than 5 years) is probably best served by a conservative portfolio emphasizing safety of principal. On the other hand, the more time you have to invest, the greater risk you may be able to withstand because you have time to recover from market downturns.

The short answer to how much of a portfolio should go into each category is that asset allocation is more a personal process than a strategy based on a set formula. There are guidelines to help establish the general framework of a well-diversified portfolio. For example, you may decide on the need for growth in order to offset the erosion of purchasing power caused by inflation.

However, building an investment portfolio that is right for you involves matching the risk-return tradeoffs of various asset classes to your unique investment profile. One final point that is worthy of emphasis – when you put together your own asset allocation strategy, you should combine all your assets (i.e., your investments and retirement savings). That way you can ensure that all your assets are working together to help meet your goals and objectives. Keep in mind, investment return and principal value will fluctuate with changes in market conditions so that shares may be more or less than original cost. Diversification cannot eliminate the risk of investment losses.