Senior Finance Issues

What is a "Health Savings Account"

2009-05-11T13:21:00.000-07:00

Hey, just a quick note: I found this presentation online that explains Health Savings Accounts! Hope you learn from it!

What’s Causing the Rising Costs of Health Care?

2008-01-02T13:10:00.000-08:00

It’s no secret that the cost of health care is increasing every year. As a result of changes in the health care industry and the economy, we’re seeing higher costs for medical services and treatment, which impact insurance premiums. Our health care system has a lot to offer—at a price. This is affecting everyone: consumers, employers, health care providers, insurance agents, insurance companies, and the government. Let’s take a look at some of the challenges we’re facing and measures we can take to address the rising costs of health care.

Higher demand for medical services – as Americans expect more from their health care providers, health care spending is increasing at a faster pace than the rest of the economy. Higher demand and more frequent use results in more spending.

Developments in medical technology – new and improved technology helps diagnose and treat various medical conditions—which has enhanced our quality of life. However, the research, development, and maintenance of new technologies are expensive and costs are generally passed down to consumers.

Prescription drug costs – the fastest-growing health expense in our country is Rx drugs, which are costly to develop, approve, and market. It may take many years and millions of dollars to bring a drug from the laboratory to the local pharmacy.

An aging population – as baby boomers reach middle age, they require more medical services. According to America’s Health Insurance Plans (AHIP), people over 50 use twice as much health care as those in their twenties, and almost four times as much by the time they reach 60.

Treating the uninsured population – an estimated 45 million Americans have no form of health insurance. Most costs associated with their care (emergency room visits, for example) are left unpaid.

Government regulations – various mandates and regulations imposed by state governments increase the cost of insurance coverage for all insured consumers in those states.

Increasing provider expenses – physicians are facing astronomical malpractice insurance costs to protect their practices and themselves from costly and damaging litigation, causing many to retire early or charge their patients higher costs for medical services.

Fraud and abuse in the health care system – when a provider receives payment from an insurance company for services never rendered or a consumer submits a fraudulent claim, every American pays the price.

If you are looking to lower your cost of health insurance, or want to make sure that you have the proper coverage, visit this website or contact me at my office.

Homecare Service Contracts are not Long-Term Care Insurance

2007-02-21T20:07:00.000-08:00

Living in your home while recovering from an illness or injury is certainly preferable to sitting in a nursing home. And homecare service companies can often provide the care needed. Unfortunately, there have been cases where homecare firms offered contracts that caused some seniors with poor health to think that they were getting much more. A homecare provider’s services may include visiting aides who cook, clean, bathe, and help with other activities. Or the company might give you access to special care by a registered nurse or physical therapist. And for an upfront fee, the contracts promise discounted, quality care when you need it without any medical underwriting. The contracts do not, however, include provisions for care in a nursing facility. And when the agreements are sold by insurance agents, seniors may get the wrong impression that they are buying Long-Term Care Insurance policies. Then by the time they need nursing home care, it’s too late to obtain the proper protection. If you or your spouse has been turned down for Long-Term Care Insurance because of advanced age or poor health, I might be able to help find a policy. In addition, there may be alternative solutions, such as a medically-underwritten annuity that could possibly provide higher than normal payouts, to meet your long-term care needs.

September is Life Insurance Awareness Month

2006-09-06T17:37:00.000-07:00

“Time for your life insurance check-up!”

What would happen to your family if you died tomorrow? Sure, it’s not a pleasant question to ponder—but if others depend on you, it’s one you can’t avoid. If you were suddenly out of the picture, where would the money come from to pay for:

Your funeral and final expenses?
What about everyday bills?
How would longer-range goals get funded like a college education for your kids
Retirement security for your spouse?

If you don’t have good answers to these questions, then it’s definitely time that you sat down with an insurance professional for a review of your life insurance needs. And what better time than now--September is Life Insurance Awareness Month! Look at these numbers from the Life Insurance Marketing Research Association (LIMRA) published in the August 2006 Agent’s Sales Journal:

29% - Americans who would like to discuss life insurance with a financial professional
33% - Americans who say no one has approached them about life insurance coverage
22% - Percentage of households that have no life insurance at all
40% - American households that have life insurance but believe they don’t have enough
70% - Agree it would be useful to periodically review their current life insurance policies
25% - Feel they have not received any information about life insurance that relates to their needs
75% - Households that do not have a personal life insurance agent or broker
75% - Households that do not have a personal financial advisor or planner
50% - Americans who admit they haven’t gotten around to buying a life insurance policy

If you have no one else to talk to about life insurance or would like a second opinion, call me toll-free at 1-877-711-1264 or send me an email! I promise I won’t be pushy. P.S. If you want to learn more about Life Insurance Awareness month, just visit the Life and Health Insurance Foundation for Education on the web at http://www.life-line.org/.

New book answers long-term care insurance questions

2006-02-16T08:29:00.000-08:00

The Senior Finances Bookstore has a new release, Avoid Mistakes in Buying Long-Term Care Insurance. Long-term care refers to the many services beyond medical care and nursing care used by people who have disabilities or chronic (long-lasting) illnesses. Long-term care insurance helps you pay for these services, which can be very expensive. A policy also ensures that you can make your own choices about what long-term care services you receive and where you receive them. This book serves as a buyer's guide to long-term care insurance. It is written for seniors and professionals who want to understand more about the many long-term care insurance options available in the marketplace today.

Take the Sting out of Fluctuating Interest Rates

2006-02-15T03:03:00.000-08:00

CDs, bonds, and fixed annuities have a common characteristic: interest rate risk. If interest rates go up while you own these investments, your earnings might buy fewer goods because of inflation. However, if you dont lock in fixed returns and instead park your cash in a money market or savings account, you risk losing out in case interest rates decline.

A conservative investor is then left to ask: What are interest rates going to do? Will they go up, down, or stay the same? The experts cant predict exactly what will happen, so how can you?

One strategy to help reduce interest rate risk is to stagger (ladder) the maturity dates of your fixed investments. In the case of fixed annuities, it would mean owning several contracts with different guaranteed rate periods. This way, if interest rates move up, the shorter-term accounts will earn the new, higher rates. Conversely, if the rates drop, part of your fixed-income portfolio will grow at the higher, older rates.

The laddering concept is a form of time and interest rate diversification and is designed to enable you to earn an average interest rate that will outpace inflation over a long period of time. And rising prices can be tougher on older investors than it is on younger ones. The Consumer Price Index (CPI) rose an average of 3.3% a year from 1982 to 2000. However, the Consumer Price Index for the Elderly (CPI-E), which follows the expenses for consumers over the age of 62, went up an annual average of 3.5%. Therefore, it may be time to rethink your strategies.

I will be glad to show you how to achieve greater diversification and reduce the interest rate risk in your portfolio. Just click below, and we'll schedule a time to meet. Guaranteed by the claims paying ability of the issuing annuity company. Not government or FDIC insured.

http://www.businessweek.com/magazine/content/01_31/b3743615.htm

Still Working & Over 70 1/2?

2006-02-14T22:02:00.000-08:00

After you turn 70½ the IRS specifies that you must begin taking Minimum Required Distributions (MRD) from your traditional IRAs. But what if you are still working or have other types of retirement accounts? Will you have to start removing money and paying more taxes?

Anyone who is over the age of 70½ is required to initiate the liquidation of their IRA, SEP-IRA, and Simple-IRA, regardless of employment status. Roth IRAs, on the other hand, are exempt from this rule and do not have any distribution requirement. The regulations on qualified retirement plans, though, are somewhat more involved.

Qualified plans are those offered through an employer. These can include 401(k)s, 403(b)s, profit sharing, and Keogh plans. If you are an employedparticipant in such a plan and over the age of 70½, you can delay the MRD until April 1 of the calendar year after you retire. That is as long as you do not own 5% or more of the business. And there could possibly be more good news for employed seniors who also own IRAs.

The government allows rollovers from IRAs to most employer-sponsored qualified plans. This means that if you are required to take MRD from your IRA and still work, you might be able to roll your account into your employers plan. Then you could temporarily avoid taking distributions and paying the associated income tax.

Even though qualified plans are allowed to accept money from IRA rollovers, they are not required to. Therefore, you should check with your employers benefit department before you undertake this tax-savings strategy. Still have questions on IRA rollovers? Write down them down on the enclosed card and drop it in the mail.

Split Annuity Taxation

2006-02-14T18:02:00.000-08:00

An investments return is what most people analyze each year. But what really counts is how much you hold on to after taxes. After all, thats what you get to spend. And if youre shopping around for CDs, you may want to look at an alternative idea that will let you keep more of what you earn.

For example, suppose that you are considering a 5-year jumbo CD. However, the certificates earnings will push your provisional income over the governments threshold. The result is that more of your Social Security check will become taxable.

The solution could be an immediate annuity that will pay you an income for five years (5- year certain). Part of the income will be taxable and the rest considered a tax-free return of your investment. At the end of five years, the payments stop. To replace the funds you had put into the immediate annuity, you would invest in a 5-year fixed annuity. Interest earning on the fixed annuity are tax-deferred and not counted towards the governments threshold on taxation of Social Security income.

The result is that you would have one investment that is partially taxable and another that is tax-deferred, thus your provisional income should go down. And with the right planning, you may possibly reduce it to the point that you would not have to pay income taxes on any of your Social Security benefits. In addition, a decline in your adjusted gross income will lower the floor on medical expense deductions and miscellaneous itemized deductions.

Then when the five years are up, you could remove funds from the fixed annuity, pay the income tax, and purchase another immediate annuity. Or you could annuitize the fixed annuity for lifetime payments.

Much of this strategy depends on your current tax bracket, itemized deductions, exemptions, and income requirements. Therefore, in order to see if this is an appropriate solution for you, we would need to include these factors in our analysis.

To schedule an appointment to discuss how you can earn more spend able money, please check off and return the enclosed coupon.

Should You Buy a Home for Your Kids?

2006-02-14T13:02:00.000-08:00

Home ownership is one of the fundamental ingredients of the American Dream. It provides financial wellbeing, increases access to additional credit, adds to a persons pride, and fosters stability. And for seniors who want to help their children or grandchildren achieve this goal, there may be rewards for them as well.

Interest rates are low. Therefore, now could be an ideal time to consider buying a home for the kids. You can make this an investment by purchasing an apartment building, a duplex, or other multi-family dwelling. Your child could live in one unit, and the other units would provide rental income to you. Nevertheless, the property will become part of your estate. And if you give it to your children, it will be subject to gift taxes. There are, however, some other ideas that you might want to consider.

One approach would be to loan the children the money to buy the house. The house and mortgage should be in their names so it is not included in your estate. You could be the lender, and the children would pay you back over time. The interest rate that you charge your children can be lower than they would get from a bank or mortgage company. But to keep the IRS from declaring your loan a taxable gift, you may want to use the applicable federal rate. Your children will still end up with low-cost financing and a tax deduction for the mortgage interest paid to you.

A tax-free gift to help with the down payment is another option. You are allowed to give $11,000 a year to as many people as you wish without paying the gift tax. Therefore, you and your spouse could give $22,000 to each child. And if they are married, that number can be as high as $44,000. Then to increase it more yet, you could give them $44,000 towards the end of the year and the same amount at the beginning of the next. With $88,000 in hand, they should be able to make a nice down payment and you will have reduced the value of your estate.

For a free analysis of your portfolio to determine the best way to help your children or grandchildren buy their first home, check off and return the enclosed coupon. You just never know, they may keep an extra bedroom for you to stay in when you visit.

Recent Tax Act Favors Annuitization

2006-02-14T08:02:00.000-08:00

Variable annuities offer you two methods to receive a regular income. Variable Annuities are sold by prospectus only, for information on any variable annuity and its underlying sub accounts please carefully consider investment objectives, risks, charges, and expenses before investing. For this and other information please call the Variable Annuity Provider to request a prospectus. Please read it carefully before you invest. One way is to take systematic withdrawals that will give you complete control over how much and when you receive the checks.

However, this does not provide any protection against outliving your annuitys assets. In addition, your accounts earnings will come out first and taxed at your individual bracket.

Your other choice is a definite stream of income for life or other fixed time period.1 This is generally the more tax-efficient way to receive cash-flow from an annuity since only part of income is taxable. The balance is considered a tax-free return of your principal. And the recent tax law changes have made this option look better yet.

For example, suppose you and your spouses annual income from pensions, investments, and government benefits is $48,000. Now you want to start withdrawing $6,000 from your variable annuity to take a cruise each year. And 50% of the annuitys current value represents your principal.

1 This promise is based on the claims paying ability of the insurance company. In 2002, you would have lost 27.5% out of every dollar taken with the systematic withdraw method. With the new tax rates for 2003, you would have only given up 15%.

But look at the possible tax saving that may have been achieved by selecting a fixed income payout. In 2002, only 13.75% would have gone to federal income taxes. And in 2003, the actual tax on your annuity income would have only been 7.5%. (You pay half the tax because, in this example, half of the withdrawal is considered return of principal.) Withdraw Method Amount Taxable 2002 Tax Rate 2003 Tax Rate Effective Tax Rate on Annuity Income 2002/2003 Systematic 100% 27.5% 15% 27.5%/15% Annuitize 50% 27.5% 15% 13.75%/7.5%

For an illustration on how annuitization can be an effective hedge against outliving your retirement assets while providing a tax-efficient income, check off and return the enclosed coupon.

Precautions to Take if You Live in a Community Property State

2006-02-14T03:02:00.000-08:00

If you live in a community property state, your spouse is generally entitled to half of the assets that you accumulate during the marriage. And it does not matter who earned them. Whats more, this right can even continue after your spouses death and impact the ultimate beneficiary of your IRA.

Each of the nine community property states has regulations that could determine what you need to do to safeguard your IRA beneficiary designations. For example, you might need to obtain your spouses written consent to pass more than half of your IRA to someone other than him or her. And in some states, if he or she were to die before you, the situation could become more complex.

For instance suppose that a married couple decides to name their son as the beneficiary of the husbands IRA. The wife dies first, and the husband wants to remove the son as the beneficiary. Its quite possible that he may only be allowed to change the beneficiary on his half of the account, and his deceased wifes portion must retain the original designation.

On the other hand, the community property states law could require that the nonparticipating spouses half of an IRA pass by the provisions in his or her will. Thereby overturning the beneficiary designation listed on the account. Depending on your states laws, you and your spouse can take steps to avoid such problems. One possibility is to give each other the power as the survivor to change IRA beneficiaries. Another potential idea is to include a provision in your wills that specify that your IRA is to pass according to the account beneficiary designations and not under the will.

There are many scenarios that you and your attorney should consider when naming IRA beneficiaries, particularly when residing in a community property state. If you would like to review or update the beneficiaries on your accounts, check below. Note: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states.

Plan your IRA Distributions

2006-02-13T22:02:00.000-08:00

Like scores of seniors, you have probably avoided removing money from your IRA for as long as possible. The tax-deferred earning and growth can make many investments in an IRA look much better than their taxable counterparts. But there will come a time (age 70½) when the IRS requires that you start withdrawing funds and paying income tax. With some planning, however, you can make the Required Minimum Distributions (RMD) as painless as possible.

Start early

The sooner you start planning how you will take money from your IRA, the better. Three to five years is ideal. This will give you a good projection of your income from pensions, Social Security, and investments. Then you will be able to decide whether the tax bite would be less if you start taking distributions now or later.

Dont double-up

You are not required to make the first withdrawal until April 1 of the year after you turn 70½. But if you wait until then, you will have to take a second distribution by December 31 of the same year. Two distributions mean more income tax and might bump you into a higher tax bracket.

Beware of Social Security creep

Fifty percent of your Social Security income is taxable when your adjusted gross income (AGI) hits $32,000 ($25,000 for single taxpayers). It rises to 85% when your AGI reaches $44,000 ($34,000 for singles). Planning your IRA distributions may show that you might possibly be able to have better control on the amount of tax you pay on your government benefits.

Convert to a Roth IRA

Prior to age 70½, you can transfer some or all of your assets from your IRA to a Roth. The move will be taxable, but you will not be faced with the RMD rule. This could be especially beneficial if you have investments that have dropped significantly in value, yet you believe they will recover. In addition, withdrawals from a Roth IRA are not included in calculating the tax rate on your Social

Security benefits.

For help in determining the most tax-efficient method of taking your IRA distributions, please return the enclosed coupon.

Another option for funding yourgrandchilds college education

2006-02-13T18:02:00.000-08:00

Planning for educational expenses is big business as mutual fund companies, colleges, and states emphasize the importance of putting away money. And the Section 529 plan has become one of the more popular ways to fund this cost. Money in the account grows tax-deferred and distributions are not taxed as long as they are used for educational purposes. In addition, you can change the investment allocation once a year and name a new beneficiary. However, in spite of these features, a variable annuity may be a more flexible alternative.

A common complaint about 529 plans is the narrow number of investments and the once-a-year allocation change rule. On the other hand, variable annuities often have more investment choices and allow you to make frequent changes to meet your individual requirements. Variable Annuities are sold by prospectus only. Please carefully consider investment objectives, risks, and expenses of the Varible Annuity and its underlying sub accounts before investing. For this and other information please call to request a prospectus. Please read it carefully before investing.

Like a 529 plan, earnings within a variable annuity grow tax-deferred. But unlike the 529 plan, money withdrawn from an annuity for something other than educational use will not be hit with a 10% penalty (assuming you are over 59½).v Therefore in case your grandchild decides not to go to college or you need the cash for an emergency, the funds are available.

Variable annuities have several variations of a guaranteed death benefit.v For example, the stepped-up benefit provides for an increase each year above the original investment, such as 5% annually until age 80. The 529 plans do not offer this feature. Section 529 plans qualify for a gift tax exclusion that permits you to contribute up to $55,000 ($110,000 for a married couple) in one lump sum per beneficiary. This could help reduce your taxable estate. But even though a variable annuity may not remove assets from your estate, you can contribute an unlimited amount without paying the gift tax.

If you have a grandchild who is 7 to 10 years away from starting college, contact me so we can discuss how to best prepare for his or her educational needs.

Over 80? Should You Forget About Long Term Care Insurance?

2006-02-13T13:02:00.000-08:00

You have probably seen the statistics on the cost for long-term care in your community, as well as the probability of needing that care. And you may have even thought about buying insurance to cover such expenses. But what if you are over 80 years of age and have a few health problems? Is coverage out of the question?

Long-term care insurance companies generally will conduct medical underwriting before issuing a policy. After all, they want to know the odds of possibly paying a claim. In many cases though, they will go beyond medical questions and give you an opportunity to explain your lifestyle. This could be especially beneficial for older seniors.

For example, suppose that you are 80-years-old and had a heart attack three years ago with little damage. Since then, medication has kept your blood pressure under control and you take a daily aspirin. Your history could indicate that you have a greater chance of needing special care than someone without your medical problem. But there could be more to the story.

Perhaps you are active as a volunteer for a charity or religious organization. Maybe you swim four times a week in the community pool or participate in other exercise. Do you manage your own finances, drive, or work in the yard? Do you have an active social life? These are points that many long-term care insurance companies will consider when reviewing your application.

Medical history will certainly play a big part in determining your eligibility for coverage. And you must tell the truth. But dont let age or health problems prevent you from protecting your assets from the high cost of long-term care. For a no-obligation proposal based on local long-term care rates, check off and return the enclosed coupon. Please include your birth date.

One Size Does Not Fit All

2006-02-13T08:07:00.000-08:00

Would you like to find a mutual fund that takes all the work out of deciding how to manage your money? Mutual funds are sold by Prospectus only, please carefully consider investment objectives, risks, charges, & expenses before investing. For this and other information please call the fund provider or my office to request a prospectus. Please read it carefully before you invest. Where the funds managers could routinely adjust the portfolio for you, under the principle that older individuals must have more conservative portfolios. Well, such funds do exist and are intended to be a simple solution to a complex problem for investors as they age.

A lifecycle fund is designed as a one-stop shop for your investment needs. You decide when you want to retire, for instance from 1 year to 25 years, and the fund company pools your money with other investors who have the same goal. And if you are already retired, some firms offer a fund that provides current income. The fund invests your money in other funds within its family and thus becomes a fund of funds. It may include a mixture of equity, fixed income, and money market funds and grows more conservative as you age.

But does this approach take your complete financial picture into consideration? Suppose that you have additional investments, such as stocks, bonds, or mutual funds? A lifecycle fund manager is not going to know about these. Consequently a lifecycle fund could end up duplicating other investments that you own and potentially cause you to have a poorly diversified portfolio. Lifecycle funds are designed to be your core investment. Thus you would have to put most of your investment eggs in one basket for the theory to operate. If you dont, you may defeat the purpose of lifecycle investing. In addition, since it is a fund-of-funds, you may pay a management fee on top of other management fees.

I believe that asset allocation is important and should be reviewed each year but adjusted only if necessary. What would make it necessary? A change in your income needs, health, and family are among some of the reasons to revise your portfolio. On the other hand, a revision by someone whom you have never met and who does not understand your unique needs may be counterproductive to your overall financial wellbeing.

To find out if a lifecycle fund is right for you, check the enclosed coupon. I'll schedule an appointment to look at your complete financial picture.

Nursing Home Expenses can Haunt your heirs

2006-02-13T07:23:00.000-08:00

Medicaid is the federal program that pays for specific nursing home expenses when a patients assets are depleted and they can no longer afford to pay for their care. However, with the aging population and skyrocketing health care claims, Medicaid has cost more than Congress ever anticipated, and they want to recover their expenses. Consequently, the states that administer the program must make an effort to recover the money spent. And the families of individuals who have benefited from Medicaid may find the government knocking on their doors looking to recover its money. At the very least, a claim could be filed against the estate.

Each state can use whatever means its legislature declares appropriate to collect the money owed. And some have become very aggressive. For instance at least one state can now put a lien on a surviving spouses home that was owned jointly with a deceased Medicaid recipient. When the survivor dies (or sells the home), the state would take its share of the proceeds first.

In addition, the same state can immediately go after the life insurance proceeds that were intended to benefit a surviving spouse. And to assure that decedents debts are paid, insurance companies must notify the state before death benefits are sent to the beneficiaries.

What are the chances that the government will dig out from its budget problems and ease up on chasing after Medicaid money? Nobody can predict this. Therefore, you need to explore how to provide the money that you may need for long-term care expenses so that your bills dont come back and haunt your family.

Theres a good possibility that I can come up with a long-term care insurance plan that will meet your budget and future needs. All you have to do is include your age on the enclosed coupon and drop it in the mail. Then I will send you a free illustration based on the long-term costs in our community.

Missed Your RMD? Better Get Out Your Checkbook

2006-02-13T03:02:00.000-08:00

Every so often bills dont get paid or paperwork is overlooked. Statements can get lost in the mail, you might be on an extended trip when the payment is due, or you may have forgotten to send in the forms. Generally the company will just tack on a late fee or overlook the delay. However, the IRS is not so generous, especially when it comes to your required minimum distributions (RMD).

IRA owners must start taking RMDs no later than April 1 of the year after they turn 70½. And by each December 31 thereafter, they must do the same. Failure to follow these rules can be very expensive.

IRA custodians are obliged to tell the treasury department if they are subject to RMD, they do not, however, have to report the amount. If you miss taking a distribution or take one that is less than required, you must take the missed distribution and pay a 50% penalty on that amount. And since distributions do not get special consideration as dividends or capital gains, they are considered ordinary income. Therefore, they are assessed at your highest federal and state tax rate. This means that the penalty and income tax could possibly total more than 85% (assuming a combined federal and state tax of 35% plus the 50% penalty).

I can help you sort through the complex RMD regulations and calculate the amount that you must withdraw from your IRAs this year. Just check off below, or call my office.

Might You Live to 100?

2006-02-12T22:02:00.000-08:00

Live to 100. Sounds great. But what are the downsides? How can there be downsides? you may ask. After all, youd have more time to golf, go fishing, and spend with the grandkids. Well, the risk may be that if you hadnt planned to live that long you could end up running out of money.

So how long of a retirement should you plan for? According to the IRS, a 70-year old person is expected to live for 17 more years to age 87. However, this is an average. Half of the 70-year olds will live longer and half will not. Therefore, a 70-year old individual who is basing his or her retirement plan and spending habits on living to 87 is rolling the dice. Furthermore, when you consider that there are more than 70,000 U.S. centenarians who represent the fastest-growing segment of our population, there is reason to take notice.

However, planning too conservatively could be detrimental as well. After all, you dont want to cut your standard of living down to the point that youll be miserable. And of course, you always have the option to make adjustments in your spending as time goes on.

All of this comes down to two simple facts: You can control how long your money will last, but you only have a limited ability to predict how long you will live. So what can you do to reduce the risk of running out of money too soon?

A fixed immediate annuity offers an income that will continue for a lifetime, no matter how long you live. And it will help you plan for the possibility of living to 87, 107, or beyond.

For a no-obligation illustration, please check off and return the enclosed coupon.

Market value adjusted Annuities

2006-02-12T18:02:00.000-08:00

In a little over twenty years, interest rates have fluctuated from almost 14% to less than 3.5%.i And no one can really be sure what the future holds. This may sometimes make finding an investment that pays a steady income which adjusts for rising and falling interest rates a difficult chore.

One method is to select investments with various maturity dates to lock in your money over a range of interest rates. Long-term fixed investments usually pay a higher rate than short-term ones. However, as interest rates go up, it could be costly to liquidate long-term investments and reinvest the money at newer, higher rates. So how can you keep up with the best yields available while protecting your income against rate decreases?

Market value adjusted annuities (MVAA) are fixed annuities that let you lock in interest rates for several terms that can range from 1 year to 10 years.ii At the end of each term the annuity company will present a new interest rate and offer you an opportunity to withdraw your money without surrender charges. But what if you wanted the money earlier?

If you were to surrender the account before the fixed period ends, the annuity company will adjust the surrender value to reflect changes in the prevailing interest rates.iii Therefore, you could be credited a higher or lower rate than that within the annuity contract, depending on market conditions.

This means that a MVAA could give you added flexibility in how your investments keep up with changing interest rates. For example, if interest rates were dropping, it would make sense to stay with your fixed contract until the term ends. When its time is up, you could renew at the up-to-date rates, select a longer higher-paying term, or take your money out. On the other hand, if market rates are rising significantly, you would want to consider possibly surrendering the contract. You will then receive a market adjustment on the interest rate and maybe pay a withdrawal and/or surrender charge.

I would be glad to send a prospectus and current interest rates on the MVAAs that I have available. All you need to do is check off and return the enclosed coupon or call my office.

(i) 10-year Treasury Bond (ii) Interest rate is backed by the credit worthiness of the issuing annuity company. (iii) Depending on the annuity companys terms and conditions, surrender charges may also possibly apply. (iv) Some annuity companies may have limitations on up and down adjustments.

LTCI Can keep you out of a nursing home

2006-02-12T13:02:00.000-08:00

If you needed long-term care, where would you prefer to receive it? A. In a nursing home B. At an assisted living facility C. In your home

According to a recent survey, 2% of the respondents chose A, 19% picked B, and 79% selected C.v The answers are hardly a surprise. Especially when you consider that the federal General Accounting Office recently reported that one in five nursing homes have deficiencies severe enough to harm or endanger residents.v So if the majority of people dont want to go to an institution for special care, and 20% of the facilities arent safe, what are your options?

People often end up in nursing homes because they have run out of money. And if they are married, their spouse may be unable to handle the job as a caregiver. A Medicaid-funded facility is the only remaining choice. Dont let this happen to you. If given the preference, wouldnt you rather stay at home?

Look at the average daily costs for nursing home and licensed home care in your area. In some states nursing home stays are more expensive than home care, in others it is the other way around. Most long-term care insurance policies base their home care benefits as a percentage of the nursing home daily benefit.

This can range from 50% to 100%, and you should go for the maximum. In addition, you may want to make sure that the policy includes a provision to pay for care by friends or family in your home. Waiver of premium should be part of your plan. This means that if you require care, you dont pay premiums. Also confirm that it applies to home care. Some policies only offer this rider for institutionalized care.

In addition, check out plans that include payments for home modifications and equipment that could make your recovery at home easier. And dont forget a cost of living rider. Medical care expenses only go one directionup.

Of course with every option, there is added cost. And you will have to balance what you want with what you are willing to spend. I can help you compare the choices and build a comprehensive plan so that you can avoid institutionalized care for as long as possible and remain in your home. Please check off and return the enclosed coupon.

What You Should Know About Medicare

2006-02-12T09:11:00.000-08:00

Author: LB Sedlacek

Medicare is the Federal health insurance program that is available to older people and to many of those with disabilities. Generally, a person is eligible for Medicare when turning age 65. In other instances, a person with a disability may be eligible, regardless of age. There are two parts to Medicare: Part A and Part B. Inpatient hospital services, skilled nursing facility, home health care and hospice services are covered by Medicare Part A. Physician services, durable medical equipment, clinical diagnostic laboratory services, laboratory tests, X-rays, diabetes self-management, outpatient hospital services, ambulance services, outpatient mental health services, mammograms, pap smears, colon or prostate cancer screenings, flu and pneumonia shots, bone density measurement, and physical therapy are covered by Medicare Part B. Medicare generally does not cover preventive care services, private duty nursing, hospital room telephone or television, private hospital rooms, dental services, eyeglasses, chiropractic services, care outside of the U.S., acupuncture, hearing aids, long term or custodial care in nursing homes or most prescription drugs. To qualify for Medicare, a person must meet at least one of the following: (1)Be age 65 and eligible for Social Security or railroad retirement benefits, (2)Have been receiving Social Security disability income for at least 24 months, or (3)Have end stage renal (kidney) disease. If one continues to work after age 65 or decides not to enroll for Social Security benefits at age 65, he/she may still receive Medicare benefits. Permanent legal aliens also qualify for Medicare when they have lived in the U.S. for at least five years or more continuously prior to eligibility date. They may also qualify when they are not eligible for Social Security benefits or railroad retirement benefits, but they usually will have to pay the premiums for Medicare Part A. If one qualifies for Social Security or railroad retirement benefits, his or her Medicare enrollment is automatic. If one is not age 65, he/she may apply with the local Social Security office during the 7 month period that starts 3 months before their 65th birthday. When applying 3 months before turning 65, the Medicare coverage begins in the birthday month. When applying in the birthday month or during the 3 months following, coverage will be delayed for up to 3 more months. Enrollment may also be done between January 1 and March 31 of any year once becoming eligible, but there may be a penalty for late enrollment and an effective date of July 1. If one has coverage with a group or business health plan, he/she may enroll any time while still working and if the employer has more than 20 employees. If one cancels group coverage while still working or retires, he/she is given a special 8 month enrollment period beginning when the group coverage ends. Be aware that when applying for a Medicare Supplement policy 6 months after Medicare Part B coverage is effective or after open enrollment ends, health questions would have to be answered on the application. Also, when one is covered with a group health plan and Medicare, as long as the employer has 20 or more employees one has the option of making the group health coverage primary and Medicare secondary. If one is automatically eligible for Medicare Part A then there is no premium to pay. A premium is required for Medicare Part B. If one does not enroll in Medicare Part B when initially eligible, then there is a 10% premium penalty for each year of delayed enrollment. Medicare options include original Medicare which comes direct from the Federal government, and Medicare PPO (preferred provider organization), Medicare PFFS (private fee-for-service plan), Medicare MSA (medical savings account plan), and Medicare HMO (health maintenance organization) or Medicare PSO (provider-sponsored organization) which are offered by private health plans. There are also special Medicare programs for people with low incomes of $4000 per individual or $6000 per couple not including a house or car. These programs are: QMB, SLMB, Q1-1, Q1-2, or Medicaid. Over 80% of those eligible for Medicare select original Medicare. It is available everywhere in the U.S. and one is enrolled in it automatically when becoming eligible for Medicare. Just about any doctor or hospital may be used with original Medicare, and it pays providers and doctors directly for the services one receives. To fill in any gaps in the original Medicare coverage, a Medicare Supplement insurance plan may be purchased. For more information, please contact Social Security at 1-800-722-1213 or log onto www.medicare.gov.

About the author: Editor of Poetry Market E-zine, Contributing Editor of Muses Kiss. Chapbooks include: after Graceland, The Cat and the Carroll A. Deering and Other North Carolina Poems, Alexandras Wreck (Kitty Litter Press - http://kittylitterpress.com). http://www.thepoetrymarket.com

The Hidden Costs of Medicare in 2006 - An Analysis

2006-02-12T03:01:00.000-08:00

Author: FixMyHealthcare.com

Nearly one year after congress passed the Medicare and prescription drug plan, both sides are still debating its supposed benefits, or detriments. Unfortunately, many of the people who will be affected by the Medicare changes still don't know where to turn.

What follows is an initial analysis of what will happen January 1, 2006.

Our conclusion:

Regardless of whatever else you're hearing, the Medicare Part ""D"" prescription drug plan has many loopholes that are harmful to seniors with low to moderate incomes.

The Analysis:

First, you will pay a monthly insurance premium of $35 per month, or $420 for the year.

Secondly, the first $225 you spend will make up your deductible no help from Medicare Thirdly, the next $2,000 in coats ($226 to $2,225) is 25% your cost, 75% Medicare. Fourthly, and this is referred to as the donut hole, you have to pay 100% again for all dollars spent between $2,225 and $5,100 no Medicare help. Lastly, any dollars spent for prescriptions above $5,100 in one year will be 5% yours, 95% from Medicare this is called Catastrophic Coverage.

Your 2006 Medicare Coverage Costs:

Your Prescription Costs/What It'll Cost You/You Pay/You Save $225-------------------------$645-------------100%---$0 $1,000-----------------------$839-------------84%----$161 $1,500-----------------------$964-------------64%----$536 $2,000-----------------------$1,089-----------55%----$911 $3,000-----------------------$1,920-----------64%----$1,080 $4,000-----------------------$2,920-----------73%----$1,080 $5,000-----------------------$3,920-----------78%----$1,080

Final Thought:

Beginning January 1, 2006 your Medicare costs, as detailed in the new plan passed by congress and the current administration, may increase significantly.

We believe congress should have done better than this for our seniors.

Remember, it's only after you spend $5,100 in Medicare-cover healthcare costs that the catastrophic support starts. Even then, you'd still be responsible for 5% of your costs.

As it stands, it will take about $800 of prescriptions in a year just to break even! Then, your out-of-pocket expenses go down. However they come right back up once you hit the donut hole, where you pay 100% again.

About the author: FixMyHealthcare.com is a website devoted to helping seniors decipher the recent changes in Medicare. Visit www.fixmyhealthcare for a discussion of senior health issues.

Medicare and Your Health

2006-02-11T22:02:00.000-08:00

Author: Viojeley Gurrobat

There is nothing more important than your health and the health of your family. Of course, education, food and shelter are also important, but at the end of the day the health of our family is probably the most important thing to us. After all, how can we get good education, put food on our table and build our family good shelter when we cannot get up to work every morning.

In the past, people go to work seven or six days a week to feed their families and put clothes in their backs. But there is no medical care available so they just spent most of their money on food, education and other living expenses. But in the 1950s, the officials of the Social Security administration noticed that older Americans were facing a health crisis. With the increasing number of older Americans each year, the Social Security Administration and the Congress established the Medicare program. Medicare applies to everybody over the age of 65. As the population ages, so is the risk of certain serious health conditions. But if you are covered by Medicare, you likely qualify for a number of benefits that could help prevent life-threatening illnesses.

The benefits you can avail of when you are covered by Medicare may include tests for prostate cancer, breast, vaginal, cervical and colorectal cancer, diabetes monitoring, bone mass measurements and pneumonia and hepatitis B shots. Although Medicare is mostly available for older Americans, younger people with disabilities and people with end stage renal disease may also be eligible.

The Medicare program has two parts, Part A otherwise known as Hospital insurance and Part B or Medicare insurance. Part A covers home health and hospice care, hospital and skilled nursing facility while Part B covers outpatient hospital services, doctor's services, and other medical services and supplies. Eligibility for Medicare requires that you have to be a US citizen or have been a permanent legal resident for five continues years and you are 65 years old and older.

Remember that illness and disease unlike aging can be prevented. Hence, it is essential that you have a healthy lifestyle and make it a point to take advantage of the medical and preventive services available to you. When you have done this, the chances of your living to your golden years will be higher.

About the author: Viojeley Gurrobat loves readings books in her spare time. She writes stories and poems about anything under the sun.

For comments and suggestions kindly visit

Social Security Medicare Attorney

Is Your Mutual Fund Getting Too Big?

2006-02-11T18:02:00.000-08:00

Is bigger always better? You may have a sound argument if you say that a bigger car is safer or a bigger hotdog in the bun tastes better. But what about your mutual funds? Does bigger necessarily mean better?

A mutual funds growth can allow the managers to increase staff, lower expenses, operate more efficiently, and thus become more profitable for the shareholders. But in certain cases, this run-up has been known to occur too fast. Then managers may have trouble finding good investments for all the new money. And they could be forced to change the focus of the fund, hold more cash, or trade less often.

To keep growing assets from becoming a hindrance to investors returns, some fund companies will shut off a fund to new depositors once it reaches a certain size. They might even reopen it after they feel that they are better able to manage new money. However, others firms have resisted closing their ballooning funds and permitted assets under management to expand to a level that could possibly be detrimental to their returns. So when does a fund become too big? The managers investment strategy plays a big part.

For example, a fund with low portfolio turnover could deal with a large influx of cash better than one that is constantly struggling to invest quick profits. Or suppose that your small-cap fund recently reported a record-breaking return for the previous year. And new investors have given the managers an extraordinary amount of money to handle. Now your funds managers are forced to buy more stocks or larger stocks just to put the cash to work. This move can swiftly change the structure and style of your fund.

If you would like to know whether your mutual funds have reached a size that could drag down future returns, check off and send in the enclosed coupon. Please include the names of your funds.

Is there an alternative to money market funds for your short-term needs?

2006-02-11T13:02:00.000-08:00

Investors are often told that they should keep a cash reserve of three to six months worth of living expenses to pay for unexpected bills, such as a medical emergency, or home or car repair. But with money-market mutual funds yielding an average of barely 0.5%v and inflation over 2%v, your just-in-case money could actually be losing purchasing power with each passing day. Therefore, yield conscience investors may want to look at ultrashort-term bond funds as an alternative. Mutual Funds are sold by Prospectus only. Please carefully consider investment objectives, risks, charges, and expenses before investing. For this and other information please call to request a prospectus. Please read it carefully before you invest.

Ultrashort bond funds have shorter average maturities than most other bond funds. This means that their share price should fluctuate less whenever interest rates change. In addition, with yields that have averaged over 1% (through 07/24/03) for the past yearv, they are certainly worth a look. However, not all ultrashort bond funds are the same and can possibly leave you with negative returns.

Ultrashort bond fund managers have a goal to deliver a higher yield than money market funds. To meet this expectation, some have invested heavily in lower-quality issues and taken on significant credit risk in industries such as telecommunications or bank loan pools. When the economy takes a downturn, those bonds can lose value or default. Shareholders then end up with negative returns and discover that they may have been better off in a money market fund. For that reason, it is important for you to understand what the fund owns before you invest money.

Return the enclosed coupon if you would like more information on an ultrashort bond fund that I am currently recommending. It takes on minimal credit risk and can be a good alternative to money market funds as long as you dont mind slight fluctuations in principal.

Note: Fees may apply when investing in mutual funds. Read the prospectus carefully before investing.

Is there a hidden risk in balanced funds?

2006-02-11T08:02:00.000-08:00

After watching their accounts go down for three years, many investors are looking at balanced funds as a tool to get back into the stock market. Mutual Funds are sold by Prospectus only. Please carefully consider investment objectives, risks, charges, and expenses before investing. For this and other information please call to request a Prospectus. Please read it carefully before you invest. And who can blame them. A balanced fund holds both stocks and bonds and therefore is supposed to be able to do well in any investment climate.

In addition, there is a fund manager who decides what balance of stocks and bonds is appropriate. However, there are some flaws in this strategy. Some flaws that you should be aware of before you invest.

Does the fund manager know about all of your assets, your income needs, or your tax situation? Of course not. Suppose the majority of your other investments are in equities and the manager of your balanced fund gets out of bonds and into stocks. Now you are not properly diversified. If interest rates should drop, you would miss out on any bond rally.

Balanced funds often have the ability to hold stocks and bonds with aboveaverage risk. This means that the bond side of the portfolio could take a severe hit if interest rates go up. In anticipation of this, managers could make abrupt changes in the asset mix and even generate short-term taxable gains that may be passed on to you.

Owning a balance of stocks and bonds still is the prudent way to invest. But you need to control how that balance is proportioned, not a fund manager whom you have never even met.

Before you fall for the sales pitch that balanced funds will take the risk out of investing in the stock market, lets meet. Together, we can put together a tax efficient portfolio that will focus on your current and future needs. Just return the enclosed coupon to schedule an appointment.

Annuities Require Careful Tax Planning

2006-02-11T07:31:00.000-08:00

One popular benefit of a fixed annuity is that you can let the interest compound in the account each year without paying income taxes. This allows your money to possibly grow faster as compared to fully taxable investments that pay similar, before-tax returns. When you start making withdrawals, the percentage of income that is taxable depends on how you structure the distributions. Your beneficiaries, however, may not have that flexibility and could face a big tax bill on the inheritance.

Assuming your annuity is not held in a tax-qualified account, such as an IRA, your heirs will have to pay income tax on the built-up earnings when you die. So for instance, suppose that you had put $250,000 into a fixed annuity a number of years ago, and now it is worth $450,000. If you died today, your beneficiaries would receive the $450,000. They would then have to pay as much $70,000 in federal income taxes on the accumulated profit. (Maximum federal income tax rates are currently 35%.) Please note a 10% federal tax penalty may apply to withdrawals taken prior to age 59.5

To help your heirs keep the money you earned, you may want to consider purchasing a life insurance policy on your life for the amount of the estimated tax bill. You could pay the premiums yourself or ask your beneficiaries to buy the policy to protect their future interests. Or you could annuitize your annuity.

Annuitizing your annuity can give you a steady income that you cannot outlive. Part of the income will be a tax-free return of your original investment. The balance will be taxed as ordinary income. However, the $450,000 will no longer be available to go to your beneficiaries. To replace that money, you could use the regular income that you will receive from the annuity to help pay life insurance premiums on a $450,000 policy. After you die, your loved ones will receive the entire $450,000, free of federal income taxes.

Is it time to bring back the dogs?

2006-02-11T03:02:00.000-08:00

Are you considering investing money in the stock market, but youre afraid of putting your hard-earned dollars into unknown companies? Maybe you would prefer blue chip stocks, the most valuable companies in the world, that ones that you think that you can just buy and forget about. However, recent years has taught many investors that even the best-known firms are not immune to market downturns and need monitoring. But perhaps you are not interested in complex stock trading systems that are difficult to use effectively over a long time. So where does that leave you?

The 30-year old Dogs of the Dow Theory is one of the simplest ways to select and own blue chip stocks. The concept requires that you put an equal amount of money into each of the Dow Jones Industrial Averages top-ten yielding stocks. Twelve months later, you repeat the process and make adjustments.

The thinking behind the Dogs of the Dow is that the yields of Dow stocks increase as those stocks lose popularity. Nevertheless, since they are the part of the DJIA, proponents of the Dog Theory believe that the high-yield stocks are the most depressed in the Index. Therefore, they are the cream of the crop and are solid values.

With Treasury note yields at record lows, the Dow Dogs average dividend might look pretty attractive. And since the income tax on dividends has been reduced to 15%, those high-dividend Dogs could have another reason to howl. If you are not comfortable owning individual stocks, there are mutual fund managers who use the Dogs of the Dow Theory. But because of regulations, they must hold more than 10 stocks. To meet that requirement some keep half of their funds assets in Treasury securities.

For illustrations on how the Dogs of the Dow have performed over recent years, please return the enclosed coupon.

Insuring for the one Left Behind

2006-02-10T22:04:00.000-08:00

Most people dont own life insurance to safeguard themselves; instead they purchase the policies for their survivors. They want to make sure that in case they die, their beneficiarys standard of living will not decline. Long-term care coverage is much the same way. You really arent buying it for yourself. You are actually protecting your spouse or anyone else close to you.

If you require nursing home attention, you are responsible for the costs. And after you have spent down your assets, the government might pick up the tab. But what would it be like to have to spend most of your money in order to qualify for Medicaid? Because once the meter starts ticking at maybe $180 per day, the emotional drain can be overwhelming as you exhaust your assets.

Medicaid qualification requirements vary among the states. But the majority allows both nursing home and waiver beneficiaries to retain only $2,000 in financial assets. Personal residences, as well as a limited number of other possessions such as annuities, might be exempt. Nonetheless, your spouse could have to sell those items just to pay his or her bills. Then he or she may be left with a feeling of helplessness, worry about facing poverty, and loss of control over the future.

Even though Medicaid is the primary source of public financing for long-term care services in the U.S., you should only think of it as a means of last resort. Long-term care insurance may be a better alternative for it can possibly eliminate your spouses need to dip into savings to pay bills at home if you require expensive, special treatment.

For a free proposal on a policy that can help your love one remain financially independent, check off and return the enclosed coupon. Please include your date of birth.

Income Makeover

2006-02-10T18:01:00.000-08:00

Thelma Smith, age 70 and retired, had a problem: expenses exceeded income, and the gap was widening each year. Her primary investment was $1million worth of agriculture property that her husband had left her 20-years ago. This netted her $25,000 a year from a lease agreement with a local farmer. Thelma thought about selling the property, but she did not like the idea of paying over $100,000 in capital gains taxes.

Thelma discussed her cash flow situation with her financial advisor. The advisor noticed on Thelmas tax return that she was giving a considerable amount of money to a charity and asked whether she was willing to decrease this expenditure. The client was clear that she would not reduce this expense. In fact, she wanted to make larger gifts in the future. Thelmas advisor and the charitys planned giving officer worked out a plan for Thelma.

Thelma could transfer the farmland to a charitable remainder trust (CRT). The trustee would sell the land without paying the capital gains tax and reinvestment the proceeds in income-producing assets such as bonds and bond mutual funds. The trust would then pay Thelma $60,000 per year for the rest of her life. Part of the income would be taxable, and the balance would be a tax-free return of principal. When Thelma dies, money left in the CRT will pass to the charity.

Thelma liked the CRT concept because of the tax saving and increased income. However, she did not want to give her largest asset to charity at the expense of leaving nothing to her children. To address this concern, Thelmas advisor suggested an irrevocable wealth replacement trust. The trustee would buy a $1million life insurance policy on Thelmas life to replace the funds that would go to the nonprofit organization. Thelma could pay for the policy with income from her CRT and the immediate tax saving that she would receive from her donation. In addition, as long as she takes advantage of the annual $11,000 per person gift-tax exemption to fund the wealth replacement trust, her heirs will receive the $1 million, estate tax free.

If you would like a free illustration on how a CRT and life insurance may possibly increase your income, reduce income and estate taxes, and help your favorite charity, please click below.

How Your Variable Annuity Can Help Your Favorite Charity and Leave Something to Your Heirs, Too

2006-02-10T09:21:00.000-08:00

Investors in the U.S. own over $880 billion worth of variable annuities.1 And some of these individuals may not need the annuities to meet their retirement income requirements. However, they may still want to make the most of their assets and pass as much as possible to those they care about.

For instance, look at Jack and Helen, both 70 years old. They have been married for 45 years, have two grown children, and are in a high tax bracket. The variable annuity that they bought fifteen years ago has done well. But Jack and Helen have found that they are able to live very comfortably without touching the annuity and are not sure what to do with it. Also, they volunteer at a local hospital and would like to leave a meaningful gift to the organization while not taking anything away from their children and grandchildren.

Jack and Helen could annuitize the contract and invest the tax-favored payments into two, second-to-die variable universal life insurance policies. An irrevocable trust would own the first policy. The second policy would be given directly to the hospitals foundation and provide Jack and Helen with an ongoing income tax deduction for their annual premium payments.

When the survivor dies, the first policys death benefit will pass free of income and estate taxes to Jack and Helens children and grandchildren. And since the charity is the owner and irrevocable beneficiary of the second policy, its tax-free proceeds will not be included in the survivors estate.

Please note that investments in variable life insurance policies underlying investment options involve risk, including the possible loss of principal invested and that the purchase of variable life insurance policies may involve significant costs.

(1) As of the end of the second quarter 2003. http://www.navanet.org/frames/press_dex.htm

How to use LTCI to reduce your taxable estate

2006-02-10T08:51:00.000-08:00

Your need for traditional estate planning may be overshadowed by the scheduled phase out of the death tax in 2010. But with a projected $450 billion federal budget deficit in 2004, it is debatable whether the estate tax will die. However, even though you may put estate planning aside for the time being, you cannot dispute the fact that long term care costs are rising. In addition, your chance of needing this type of care goes up each year. Therefore, why look at a strategy that can provide additional income if you need special care and move funds from your estate (just in case the tax stays with us)?

You are allowed to give $11,000 ($22,000 for a married couple) each year to as many people as you wish. For example, you could make that gift to your daughter who would then purchase a long-term care insurance policy with a return of premium at death option on you. The gifts would continue, and she would pay the annual premiums. When you die, your daughter should receive a portion of the premiums paid less any benefits you have used. And since you are not the policy owner, the death benefit should not be included in your taxable estate.

Suppose you want the same type of protection for your middle-aged child? Long-term care insurance premiums paid directly to an insurance company for a policy owned by a third party are treated as health insurance premiums. And health insurance premiums paid for a third party are considered a tax-free transfer. Therefore they are not regarded as a gift, they do not count towards the $11,000 annual gift exclusion, and the policy owners do not have to treat the premiums paid as income. And if you include the return of premium at death rider, the money could eventually pass to your childs heirs.

I can show you how a long-term care plan can provide for your needs, ensure sufficient income for your spouse, and preserve assets for your beneficiaries. Please check off and return the enclosed coupon for a free brochure.

How to Possibly Cover Those Fixed Expenses

2006-02-10T08:01:00.000-08:00

Even the best experts cant predict how certain investments will perform or the income that youll see from them. Nevertheless, you might need a set amount of money each month to pay nondiscretionary expenses like mortgage payments, auto loans, and life insurance premiums. And frequently these monthly outlays are fixed for a number of years.

To pay these predictable expenses, you may want to consider a fixed, immediate annuity to provide a steady stream of income for your lifetime, your spouses lifetime, or the duration of the loan.1 And if you dont like paying taxes, you may like the idea that part of that regular check from an immediate annuity is a tax-free return of your investment.

But what about expenses that you will always have and most likely will go up each year, such as real estate taxes, auto insurance, or homeowners premiums? Some immediate annuities offer several options to meet your future needs too, including an inflation protection rider that will let your income rise annually.

1 Ability to make payments based on claims-paying ability of Annuity Company. Not government backed or FDIC insured. Exact provisions of inflation rider may vary among annuity companies and may not be available on many annuities. Additional riders are subject to additional fees and charges.

How to maximize the tax efficiency of your variable annuity

2006-02-10T02:59:00.000-08:00

Variable annuity owners often hear a good news, bad news saga from their financial and tax advisors. Variable Annuities are sold by prospectus only. Please carefully consider investment objectives, risks, and expenses before investing in any variable and its underlying sub-accounts. For this and other information please call to request a prospectus. Please read it carefully before you invest.

The good news may be that their investment has gone up in value; the bad news is that when they die, their beneficiaries will have to pay income tax on that growth. There is, however, a way to eliminate the bad news part of this story and pass more dollars to your loved ones.

Lets take the case of Sally, age 70, a widow with one daughter. After her husband died, ten years ago, Sally sold her home and invested part of the money in a variable annuity. Despite the recent downturn in the market, Sallys annuity has nearly doubled in value over the time she has owned it. But she has recently been reminded that her daughter, who is in the 35% tax bracket, may eventually have to pay income tax on those gains.

Since Sally does not need income from her annuity at this time, one strategy would be to have her daughter buy a life insurance policy on Sallys life for the annuitys value. This would allow the proceeds to pass income tax free when Sally dies.

To pay for the policy, Sally could annuitize her variable annuity. Shell receive a lifetime income and be able to give her daughter enough money to make the life insurance premium payments. Any of the distributions that Sally does not spend, could be invested to provide for her future needs. What makes this better yet is the immediate annuitys exclusion ration. This means that only part of the money that Sally will receive is considered taxable earnings, and the balance is a tax-free return of principal.

For a free illustration on how to you can make the most of the tax benefits in your variable annuity, check off and return the enclosed coupon.

How to Make the Most of a Maturing Equity Indexed Annuity

2006-02-09T22:00:00.000-08:00

Did you invest in an equity-indexed annuity (EIA) a few years back? If you bought it seven years ago, the maturity date may be approaching fast. And you might only have a small time-window to decide whether to renew the annuity or place your money elsewhere.

If you look at what has happened to interest rates and the markets since you bought your EIA, you may understand why the specifications for a new contract might differ. Interest rates are at a four-decade low, and the markets have swung wildly. Therefore, theres a good chance that you will see lower market participation rates and lower maximums (caps) on amounts credited to your EIA. In addition, you may have to make a longer-term commitment on your new contract.

Also the company might now have the ability to change participation and cap rates on the annual anniversary dates. Whereas, your original contract may have kept the same numbers throughout the term. However, this could work in your favor. Because if the equity markets become less volatile, theres the chance that index option premiums will decrease, thus allowing annuity companies to offer higher annual participations levels and caps.

Times have changed and many of our investments have as well. And a new EIA might not be identical to the one you bought before. Nevertheless, it will still provide the same opportunity for tax-deferred growth and the other features that encouraged you to make your original purchase.

I can evaluate your current EIA and compare it to the new one that your annuity company has offered. Furthermore, I will see how it measures up to other companies products. Please fill out and return the enclosed coupon. Include your annuitys contract number and the companys name.

How to Make Sure a Simple Rollover Doesn't Create Big Tax Problems

2006-02-09T18:00:00.000-08:00

Each year, thousands of investors roll their savings from company retirement plans to IRAs or from existing IRAs to new accounts. However, if not done properly, what should be a relatively simple transaction could become a tax nightmare.

For example, take the hypothetical case of John and Harriet. John was retired; had rolled his $250,000, 401(k) into an IRA; and invested in several mutual funds. When the account dropped to $225,000, John withdrew his money and deposited it in his checking account. The bank offered John a higher amount of FDIC coverage if he opened individual accounts for both John and Harriet. John followed that advice and invested in two CDs, $100,000 each for him and his wife. Neither account was an IRA.

When it came time to do their taxes, John and Harriet declared a $25,000 distribution even though he received a 1099-R form showing a $225,000 withdrawal. The following year, the IRS came knocking at the door and handed John and Harriet a tax bill for over $63,000. How could this happen?

A Steady Income with Tax-deferred Growth

2006-02-09T13:00:00.000-08:00

Have low interest rates and an uncertain economy stopped you from making long-term investments? This reluctance to do anything could come at a cost, such as a reduction of income. Immediate and fixed annuities have often been the investments of choice for people who want steady income and tax-deferred growth. And when used together as a split-annuity, these investments could possibly provide a return that might keep pace with prevailing interest rates while not tying up all of your funds.

An immediate annuity will pay you a predictable amount of money each month for a fixed term (or lifetime). Part of your income would be tax-free since it is a return of your investment. Once you make the investment the funds are generally not accessible. On the other hand, a fixed annuitys income accumulates tax-deferred. And you can withdraw the earnings and a certain percentage of the principal (depending on the issuing companys guidelines) each year.

The concept of the split-annuity is that by the time your immediate annuitys term runs out, and the payments stop, your fixed annuity will have grown enough to replace your original investment. Then you can start the process over again at the current interest rates, which could be higher or lower than your prior investments.

The calculation to determine what portion of your split-annuity should go into the immediate annuity will depend on the current interest rates and the number of years for the payouts.

If you would like to see an illustration of how a split-annuity can provide a dependable stream of tax-advantaged income with principal protection, please click below.

Note: Annuities are backed by the claims paying ability of the issuing company and are not FDIC insured.

How to Leverage Your IRA

2006-02-09T07:59:00.000-08:00

Theres a good chance that you pay life insurance premiums each year. And most likely you are paying those premiums with after-tax dollars. But wouldnt you rather use before-tax money? Then you could possibly reduce your net premium costs or get more coverage for the same amount that you are paying now. If you have an IRA, thats exactly what you might be able to do.

You cannot own life insurance in your IRA. However, qualified retirement plans, such as 401(K), profit sharing, stock bonus, Keogh, SIMPLE, and pension plans can, even if youre the plan sponsor. For example, suppose you are retired but operate a part-time business. As long as the business is valid and produces an income, you can set up a retirement plan for yourself. Then you can roll your IRA to the new plan without paying income tax and buy the life insurance with the plans dollars. When you die, a portion of the cash value in the policy will be taxable to your beneficiaries, but the balance will pass income tax-free.

Existing policies could be transferred into your qualified plan as well. If your policy has cash value though, the new plan will have to pay you the lesser of the cash-surrender value or the amount of assets in the plan. On the other hand, a term policy has no cash value so you could transfer it without payment.

Life insurance inside a retirement plan can provide tax advantages as well as non-tax advantages. However, before you implement this technique, have a strategy for removing the policy from the plan after you retire. And understand the governments policies. One new law affects policy valuations upon transfer to a plan participant. The other ruling concerns the amount of the death benefit. Therefore, you should consult with your advisors so you are sure that you do it right.

How to Keep up with inflation

2006-02-09T07:30:00.000-08:00

Fixed immediate annuities can be excellent investments for people who want a stable income for a set period of time or for the rest of their lives. However, because of inflation, a $100 payment that you would receive today might only buy $75 worth of goods 10-years from now.

A variable immediate annuity is one way to protect against inflation. Your income can go up or down depending on the success of the investments in the portfolio and thus has the potential to outpace inflation. But you may not be comfortable having your retirement income dependent on the markets returns.

Or perhaps you already have a sufficient amount of your assets invested in stocks and bonds and want something more stable. There is another alternative then that you may want to consider.

I work with a well-established insurance company that offers an optional feature within their fixed immediate annuity that allows your income to increase each year by a predetermined amount. And you get to choose the amount.

During the early years your payments may be less than those of a traditional fixed immediate annuity. But the payments in later years will be greater and designed to keep pace with inflations historical average.

For a free illustration of how a fixed immediate annuity with inflation protection can ensure a steadily increasing income, please return the enclosed coupon.

How To Get Income From An Old Life Insurance Policy

2006-02-09T03:00:00.000-08:00

Do you or your spouse own a life insurance policy that you bought years ago? Perhaps it was to provide an income for the survivor in case anything happened to either one of you. Or maybe you acquired it to make sure that there would be money to pay off the mortgage or fund the childrens college education in case you died. Whatever the reason you had for buying life insurance, theres probably a good chance that your needs have changed. And now you may be looking for a way to increase your income each month.

Of course, you could just cash in the policy or even sell it for more than its surrender value and reinvest the proceeds. But then you might face charges, fees, or possibly income taxes. There may, however, be other options that can offer a stream of tax-free income.

Through a series of withdrawals or loans, cash value life insurance policies can often provide tax-free money. This could be as a lump sum or systematic payments to accommodate your needs. Then when you die, your beneficiaries will receive the greater of the remaining cash value or the death benefit, income tax free.

Also you might want to exchange your policy for one with a lower death benefit. This can be a tax-free transaction, and you could end up a higher income since the cost of the insurance within the new policy may possibly be less.

For a no-obligation proposal on the income you may be able to receive from your old life insurance policies, please check off and return the enclosed coupon.

How to create tax dollars to convert an IRA to a Roth

2006-02-08T22:00:00.000-08:00

Which would you rather leave to your family: a taxable account or a tax-free one? Most people would choose the latter. And believe it or not, Congress thought so too.

IRAs are fully taxable to beneficiaries. Roth IRAs, on the other hand, allow heirs to withdraw the money tax-free with the option to extend the distributions over the oldest beneficiarys life expectancy. And in 1998, the legislature came up with a way for investors to convert their traditional IRAs to Roth accounts. For some people though, a conversion is neither possible nor practical.

IRA owners who want to convert to a Roth IRA while they are alive must meet two conditions:

1. Their adjusted gross income must be less than $100,000 for the year of the conversion

2. They must report the amount converted as ordinary income and pay income tax on that amount

The second provision can frequently be the most difficult to overcome. An IRA owner may not want to pay the income tax or does not have the available cash for a large tax outlay. If this is preventing you from taking advantage of the Roths potential tax savings, life insurance can be an effective way to fund the conversion for your beneficiaries.

First you need to designate your spouse as your IRAs beneficiary. Then you would purchase life insurance to pay the projected income tax for the Roth conversion and name your spouse as the policys beneficiary. When you die, your spouse would roll your IRA over into his or her name, and convert it to a Roth IRA. The money to pay the income tax for the conversion would come from the life insurance proceeds.

After the conversion, your surviving spouse could take tax-free distributions as needed and name new beneficiaries. Money left in the account would continue to grow income tax free. Upon his or her death, the heirs would receive the account without paying income taxes.

For a free analysis on how you can turn taxable income into tax-free income for your beneficiaries, check off and return the enclosed coupon.

How to build an increasing stream of income

2006-02-08T18:00:00.000-08:00

Immediate annuities offer a steady flow of income that can last your lifetime as well as your spouses. However, with interest rates low and the rising cost of living, retirees are sometimes afraid to place money into assets that produce a fixed income which might not keep up with their increasing needs. One option would be to purchase several smaller annuities over a period of years.

Say that you are a 65-year old man and are considering putting $600,000 in an immediate annuity. With that investment, based on present rates (09/03/2003), an annuity company will possibly pay you $4,013 per month for the rest of your life.v But lets look at what could happen if you were to make three smaller purchases over 10 years.

At age 65 a $200,000 immediate annuity might pay $1,338 per month. Five years later, age 70, you could purchase another $200,000 annuity which might provide a $1,511 monthly income. Finally, at age 75 the last $200,000 would buy an annuity with a $1778 income. The total monthly income you could start receiving at age 75 would be $4,627, $614 more than with a single large purchase.

The above example assumed that interest rates remained constant throughout the 10-year period. The higher payout came about because the older you are when you buy an annuity, the lower your life expectancy; therefore the annuity company increased the monthly income. And if interest rates rise, the income could go up still more since the payouts on new immediate annuities might possibly go up as well. Of course, the opposite could happen. If interest rates were to go down, new annuity rates could fall and you may have been better off with the one-time large investment.

Theres not a simple solution to assuring that your nest egg will last your lifetime, while at the same time having your income keep pace with the everincreasing cost of living. But if you would like to learn how to protect your income against rising prices, please return the enclosed coupon.

How a Roth IRA can save your heirs tax dollars

2006-02-08T15:10:00.000-08:00

When beneficiaries, other than your spouse or children, inherit your non-Roth IRA, they will have to withdraw the funds based on your life expectancy. And the distributions will be considered taxable income to the recipients. However, with a Roth IRA, the original accountholders age is not a factor when determining the payout schedule since the Required Minimum Distribution Rule (RMD) does not apply.

Rather it is based on your heirs life expectancy. Therefore, your beneficiaries have the opportunity to leave more money in the Roth and for a longer period of time than they could with a non-Roth IRA. For example, suppose you left your Roth IRA to your 30-year old granddaughter. She would have the option to take withdrawals over the next 53 years instead of over your shorter life expectancy. She will, however, have to make the first withdrawal by December 31 of the year after your death to qualify for the lifetime income stream.

As long as the assets have been in a Roth for at least five years, money coming out of the account is income tax free, no matter who takes it out. Nor does it matter how much they withdraw. But the more money that can stay in the account, the more that can accumulate tax-free. This tax-free compounding can possibly mean greater growth when compared to taking the non-Roth inherited funds over a shorter period of time then investing in a taxable account.

No one particularly likes to pay income taxes. And when you convert your IRA to a Roth, you will have to pay on the total transferred. But look at it this way: Youre paying today to help your heirs build a tax-free nest egg for the future.

I can help you understand the complex rules on inherited IRAs, Roths, and other investments. Return the enclosed coupon, and Ill call you to schedule a time to meet.

How to build a future income stream and leave a tax-free legacy

2006-02-08T15:05:00.000-08:00

Having enough money to live comfortably for the rest of their lives is the number one concern of some seniors. And many also want to leave something significant to their children and grandchildren. But with life expectancies going up each year, some investors are fearful that they might have to sacrifice one goal for the other. There may, however, be a solution with universal life insurance (UL). (Ability to pay is based on the claims-paying capacity of the life insurance company. Fees, such as surrender and loan charges may apply. Not government or FDIC insured.)

First, you loan money to a new or existing UL policy for a series of years. The amount and the number of years required will depend on your age, health, and how much you want to leave to your family. Thereafter, depending on the policys returns, you might not have to contribute any additional money.

You would then be able to withdraw your contributions without paying any income tax since it is considered a repayment of the loan you made earlier. Furthermore, the cash left in the policy will continue to grow tax free and could be taken out as a tax-free loan in the future. The money will not have to be repaid until you die. It and any accrued interest will be deducted from the death benefit which will pass income-tax free to your family.

The strategy can vary based on how many years you want to pay into the policy and the end result you choose: either maximum possible income in the future or the highest death benefit. Nevertheless, it is a unique method to provide retirement income and leave a meaningful bequest to your family.

For a personalized illustration of how a life insurance policy can be built around your individual needs, please check off and return the enclosed coupon to schedule an appointment.

Homecare Service Contracts are not LTC

2006-02-08T13:02:00.000-08:00

A homecare providers services may include visiting aides who cook, clean, bathe, and help with other activities. Or the company might give you access to special care by a registered nurse or physical therapist. And for an upfront fee, the contracts promise discounted, quality care when you need it without any medical underwriting.

The contracts do not, however, include provisions for care in a nursing facility. And when the agreements are sold by insurance agents, seniors may get the wrong impression that they are buying long-term care insurance policies. Then by the time they need nursing home care, its too late to obtain the proper protection.

If you or your spouse has been turned down for long-term care insurance because of advanced age or poor health, I might be able to help find a policy. In addition, there may be alternative solutions, such as a medically-underwritten annuity that could possibly provide higher than normal payouts, to meet your long-term care needs.

For an appointment to review your options on how to plan for the cost of long-term care, please check off and return the enclosed coupon or call my office.

GMP Rider

2006-02-08T08:00:00.000-08:00

People invest in variable annuities for many reasons including the tax-deferral of earnings, the ability to name beneficiaries and avoid probate, and the growth potential of the managed sub-accounts. Variable Annuities are sold by prospectus only. Please carefully consider investment objectives, risks, charges, and expenses before investing in any variable annuity and its underlying sub accounts. For this and other information please call to request a prospectus. Please read it carefully before you invest.

Then whenever they are ready to withdraw an income from their annuity, they have the opportunity to select lifetime income payments. However, with a variable annuity you do not know what that income will be when you open the account since the future value can vary depending on the investments performance. Sometimes though, investors overlook an important option that may help them plan for a predictable income.

The Guaranteed Minimum Payment (GMP) option assures that you will receive no less than a specific amount of income each month, no matter what the markets do.v And if the investments go up, your future monthly income goes up too.

How the GMP is determined varies among annuity companies. One example is to base it on the greater of:

1) The value of your purchase compounded at 6% a year, or

2) The highest account balance reached on any contract anniversary date

Another version of the GMP promises that future payouts will never be less than a certain percentage, say 80%, of your first payment. For instance if your first check is for $1,000, future distributions will be no less than $800, regardless of what happens to the markets.

For more information on how an immediate variable annuity with the GMP rider can give you a lifetime income that can possibly avoid market volatility, please return the enclosed coupon.

Funds that seek to make money in rising and falling markets

2006-02-08T03:00:00.000-08:00

Making money whether the market goes up or down almost sounds too good to be true, nevertheless, there are investment managers that have been able to do exactly that. Furthermore, several financial institutions have recently made it easier for the average individual to invest with these managers.

Hedge funds are private partnerships that invest primarily in publicly traded securities or financial derivatives. Since the goal of a hedge fund is to make money in all market environments, its managers have wide latitude to invest in options, short stocks, or employ other hedging strategies. On the hand, mutual fund managers are often limited in their ability to use such aggressive techniques, therefore may have difficulty showing gains when markets are down.

Over the past 15-years (through 2002), overall hedge fund gains have been impressive: 17% compounded annual return compared to 11.5% for the S&P 500.v And for the shorter term, they have gained an average of 11.2% for the last three years, whereas the average U.S. diversified stock mutual fund fell 11.7%.v

How can you invest in hedge funds, and would you even want to? SEC regulations limit hedge funds to 99 investors, and at least 65 of them must be accredited ($1 million net worth). Therefore, hedge funds were out of reach for average investors. Now though, mutual funds companies have registered hedge funds that invest in unregistered, private hedge funds. These funds of hedge funds can have lower minimum investment requirements than the typical hedge fund and a higher number of investors.

Yet despite the attractive returns and new products aimed at smaller investors, such investments are not without shortcomings. For example, there is very little SEC regulation, disclosure of investments held is not required, and daily fund prices are not available.

For more information on hedge funds and the new products that make them available to the average investor, return the enclosed coupon. Note: Investing in funds of hedge funds may involve high fees and risks, including loss of principal. Carefully read the prospectus before investing.

A Fixed Annuity Offers More Control over Your Taxes

2006-02-07T22:00:00.000-08:00

A study concluded that high tax-bracket investors who had held taxable mutual funds were losing 25% of their returns to taxes each year. And bond funds returns were shown to have lost almost 40% in 2002.

This loss to taxes can be attributed in part to how portfolio managers control the tax liability that is passed on to shareholders. Because every time the fund manager declares a distribution, such as an interest payment or a short-or longterm capital gain, it flows through to your taxable income. And this happens even if you never withdraw any money. Therefore, if you presently dont need the income from an investment, why pay taxes on its earnings?

Based on the above studys findings, if you invest $100,000 in a bond fund that yields 6%, you would lose up to 40% to taxes. And you will end up with a 3.6% after-tax return. After five years, your account would be worth $119,344. On the other hand, an investment that allows interest to accumulate tax-deferred, such as a fixed annuity, with a five-year 5% rate would grow to $127,628.

All of this doesnt mean that bond funds are bad investments. But depending on your present and future needs, a fixed annuity can be good alternative. The interest rate is locked in for a term that you choose, your principal is guaranteed by the claims paying ability of the issuing company, and you control when to pay income taxes.

Fixed Immediate Annuity Can Eliminate the RMD Calculation Each Year

2006-02-07T18:00:00.000-08:00

Do you own an IRA, hold a Keogh, or still have assets in a qualified retirement plan that was offered by a previous employer? Then perhaps now you have to think about the best way to withdraw the funds, as the IRS requires, while making sure that you dont outlive your income.

One choice is to just remove the money all at once and pay the tax. However, that step may put you in a higher tax bracket. Another option is to go along with the governments guidelines and calculate the Required Minimum Distribution (RMD) that you must withdraw each year after you turn 70½. But what if there was a way to not have to do those calculations and also not worry about tax law changes and market fluctuations that could affect retirement accounts every year?

A tax-qualified, fixed immediate annuity will spread the tax liability over your projected lifetime and automatically satisfies the IRSs requirements. Therefore, you will never have to calculate the RMD. A check will arrive every month, or whichever schedule you select, for the rest of your lifeno matter how many years that might be (guarantee is based on the claims-paying ability of the annuity company). Then all you will have to do is pay the income tax and spend the balance of the money as you wish.

After-tax contributions may not apply. See your tax professional.

I can send you a no-obligation analysis on an fixed immediate annuity that will give you an income that you cannot outlive and also meets the RMD requirements of your plan so you don't have to worry about that. (Guarantee of income is based on the claims-paying ability of the annuity company.) Please fill out and return the enclosed coupon. Be sure to include your age, current tax bracket, and value of your IRA or other retirement plan.

Fixed Immediate Annuities Can Offer Flexibility for Your Future

2006-02-07T15:51:00.000-08:00

Stability and safety are important to many seniors. And these are only two of the reasons why immediate annuities are popular investments. A check arrives every month and part of the income is considered a tax-free return of your principal. Additionally, as long as the annuity company is financially sound, the payments will continue for the life of the contract. (Annuities are guaranteed by the claims paying ability of the annuity company and not by the Federal Government.) However, consumers sometimes believe that immediate annuities are illiquid, irreversible investments and cannot provide for future lifestyle changes. Nonetheless there are some immediate annuities with options that may add flexibility to your financial plan.

Fixed Immediate annuities can possibly include an option (subject to additional fees and charges) that would allow you to receive extra cash at specific anniversary dates. For example, this might be at the 5th, 10th, or 15th anniversary of your investment. Exercising this option will reduce your future payments. (The distribution may be fully taxable, so consult with your tax professional.)

And suppose you needed money to cover an emergency, for instance paying for caregivers or a home repair? Some annuity companies will let you take up to up to six payments all at once. You would not, however, receive checks for the following six months. (Payments may be fully taxable so consult with your tax professional.)

You may also have the ability to provide a cash benefit from your immediate annuity to your heirs. This would be a predetermined percentage, such as 25% or 50%, of the amount of your initial investment. Selecting this option though, will reduce your monthly annuity checks, and may have tax consequences.

Choosing theRight Executor

2006-02-07T13:00:00.000-08:00

A will is a living document, therefore whenever you have a major life change you should consider reviewing your will. Part of this review should include making sure the person you have chosen to be your executor or personal representative is still ready, willing, and able to perform the duties of that role.

The job of an executor is usually not simple. It can be time-consuming, require a surprising amount of effort and energy, and cost money. As you age, your executor is also aging. The right choice 10 or 15 years ago may not work over the next 10 or 20 years.

What should you consider when choosing your executor?

Always ask the person if they are willing to perform the tasks involved, and make sure they really understand what those responsibilities are.

Consider how that individual will deal with your heirs, especially if he or she is also an heir. A sense of fair play and a willingness to negotiate are critical traits.

What is his or her age, health, overall physical condition, and personal situation? An executor may have to travel, stand in long lines for hours, confront dueling heirs, go to court to resolve matters, deal with probate in your state and any other state where you own property, and much more.

Also make sure your chosen executor can manage his or her own finances before you let them handle yours. You wont be able to guide them so they need to be responsible and be someone who will do things your way.

Another decision is whether to have co-executors. You may like the idea of executors looking over each others shoulder. But some people (especially siblings) may not get along together well enough to jointly handle your affairs in an equitable manner. That can result in costly attorney fees to resolve problems.

Should your executor be an heir? Maybe. It does save money, since no attorney or bank trust department or other entity is charging a fee. But there can be serious conflicts with other heirs, so choose wisely.

Exactly How safe are fixed annuities?

2006-02-07T12:47:00.000-08:00

Safety is a relative term because what is safe to one person is risky to another. For instance you may consider a U.S. Treasury bond one of the safest investments since it is backed by our government. But a true skeptic might say, Suppose the U.S. government went belly-up? The bond could then be worthless. Yes, he could have a valid point. However, putting the extremes aside, safety is one of the top reasons that people buy fixed annuities.

There are several independent rating agencies that regularly assess the financial strength of insurance and annuity companies. Included are A.M. Best, Duff & Phelps, Moodys, Standard & Poors, and Weiss Research. These firms will give you an evaluation of a companys balance sheet strength, operating performance, and ability to meet ongoing obligations. In addition, all companies must follow the legal reserve system. This is a set of rules on asset management, accounting, and reserve requirements.

The reserve requirements assure that funds are set aside specifically to protect against an insurance companys portfolio losses. Furthermore, insurance companies are state regulated. And all 50 states, the District of Columbia, and Puerto Rico have guaranty associations to which licensed life and health insurers must belong. When states determine that an insurer is insolvent, a mechanism within the association protects the policyholders and can possibly help pay the claims against financially-troubled insurance companies.

I work with several financially-strong, well managed annuity companies. For free information on the safety of their products, check off and return the enclosed coupon.

Even with the New Tax Law, Munis can still look good.

2006-02-07T08:49:00.000-08:00

Congress recently reduced the Federal income tax rates, and with an election coming up theres always the possibility that other tax breaks may surface. So does this mean that you should forget about investing in tax-free municipal bonds? Before you answer that question, understand the budget problems facing state and local governments throughout the country. If you look close, there may be a silver lining for you hiding in their dark cloud.

Various states and municipalities have had to issue more bonds in order to generate badly needed revenue. This additional supply of new bonds has caused many prices to drop.

Furthermore, some issuers have had their credit quality downgraded, which forced them to offer higher yields. The increased supply, lower prices, and higher coupon rates have reduced the before-tax spread between municipal bonds and equivalent maturity Treasury bonds.

For example, in 1997, the average ten-year, AAA muni yielded 75% of that of a similar Treasury bond.v As of November 2003, the muni/treasury ratio had risen to 85%.v And when you consider the after-tax returns, individuals in higher tax brackets may find that tax-free municipal bonds may possibly be an attractive alternative to Treasury bonds.

I can send you a complementary evaluation of how a tax-free municipal investment might possibly provide you with a higher yield than a Treasury bond. Please indicate your tax bracket on the enclosed coupon and return to my office.

Dont let poor health keep you from protecting your assets

2006-02-07T03:01:00.000-08:00

Its rare, but occasionally one spouse cannot qualify for long term care insurance because of poor health, such as hypertension, Alzheimer's, arthritis, diabetes, or frailty. Does this mean that the healthy spouse should forgo the coverage as well?

As you get older, the chances of needing long term care increases. Fortythree percent of individuals age 65 and older will spend time in a nursing home. And once they reach age 75, the likelihood rises to 60 percent.v Suppose you are healthy and your spouse is not. As long as you can maintain your good health, you will be able to care for him or her. But what will happen if you need care? Both of you could end up in a nursing home and may even be split up.

A long term care insurance policy could pay for the care that you need and also provide for a homemaker to help with your spouse. To finance this, you could possibly double your policys daily benefit above the average per day cost in your area. The surplus income would then be available to help offset your spouses care giving expenses while you recover.

Another idea is a life income annuity that could pay nursing home expenses for your spouse when long term care insurance is not available. You could invest a lump sum with an annuity company that would pay your spouse a set amount for his or her lifetime. Generally, normal life expectancies determine annuity payouts. This means that the longer the life expectancy, the small the payout.

For someone who is ill, however, his or her life expectancy may not be normal. To accommodate these special situations, some companies offer medically underwritten annuities that factor the annuitants illness into the life expectancy calculations and may provide higher than normal payouts. The payout numbers can help determine how much you would need to invest cover your spouses long term care expenses.

For a free analysis that may show you how to protect you and your spouse from the rising costs of long-term care, return the enclosed coupon.

Do You Want to Hedge Your Bet?

2006-02-06T23:31:00.000-08:00

Second-to-die life insurance policies are popular investments for people who want to create cash to pay estate taxes. The plans pay when the surviving spouse dies, and if structured properly; the benefits are kept out of the couples estate. And quite often, a second-to-die policy is less expensive and easier to obtain than two individual policies. However, with the federal estate tax set to disappear, you may not see the need to prepare for such an expense. But suppose it doesnt go away? Where would your beneficiaries get the cash to cover the taxes?

The federal estate tax exemption for 2004 and 2005 is $1.5 million and in 2009 $3.5 million. Then in 2010, the tax goes away. Yet it is scheduled to return to the original 2002 level of $1 million in 2011. Whether there will be further changes is anyones guess and has been the subject of much speculation and debate. But do you really want to bet a substantial portion of your estate on the politicians whims?

If you are concerned about taxes eroding your estate, a small group of insurance companies has introduced an option that may be of interest to you. The estate tax repeal rider will allow you to terminate a policy without paying surrender charges as long as the estate tax is fully repealed in 2010. Thus you keep the protection if the tax remains, or you can get your money back if the tax is abolished, and the insurance is no longer needed.

For a no-obligation proposal on a policy that will ease the uncertainty over disappearing estate taxes, check off and return the enclosed coupon. Please include your and your spouses dates of birth.

Dividends Can Maximize your total return.

2006-02-06T18:01:00.000-08:00

You may recall back when dividends were the main reason people owned stocks.

However, that changed over the last few decades and a stocks growth rate was often the first thing investors wanted to know. Now dividends are making a comeback. And its understandable why. The interest rates on bonds hit a 45- year low, and CDs earn less than half the rate of inflation. In addition, the recent tax law revisions have dropped the rate on dividend income to a maximum of 15%. But what about the long-term outlook? Can dividend-paying stocks fit into your overall financial picture?

Examine the after-tax return on dividends as compared to interest bearing investments, such as bonds and CDs. For instance, assuming you are in the 35% tax bracket, a 3.5% dividend will net you 3% after-tax. Whereas, a bond that pays 4% will only leave you with 2.6%. Now this may not sound like much difference, but what can happen as time marches on and you need higher income?

When the economy expands and companies prosper, there is the possibility that dividends can rise along with the cost of living. Bonds and CDs dont have that flexibility. Once you buy a fixed income investment, you are locked into its rate until maturity.

Furthermore, over the past 75 years, dividends have represented one-third of the total return on stocks.v And a recent study concluded that companies that pay high dividends grow faster than firms that reinvest all of their earnings.v The goal of most income investors is to earn predictable returns, have the option of receiving cash payouts, and know that their principal will remain relatively stable. These are three possible characteristics of dividend paying stocks. But its not quite as simple as just buying the highest paying stock or fund listed in the newspaper or financial magazine. Because a high dividend does not necessarily mean it is a good investment.

In the fall of 2003, one major firm cut its dividend by 70%. Then other corporation raised its dividend by 75%. And if you dont time a mutual fund purchase properly, you could miss out on the new 15% tax rate and have to pay up to 35% on the dividend income.

If you would like a list of the dividend-paying investments that I am currently recommending, please return the enclosed coupon.

Could Prices Actually Come Down?

2006-02-06T17:31:00.000-08:00

Everything seems to cost more than it did a few years ago. Remember when you could buy a new, full-sized car for under $5,000? Or when gasoline was under half-a-buck a gallon? But what about life insurance? Did you think about buying a new policy before you retired, but if you had health problems the cost was prohibitive? Perhaps now might be a good time to check it out again because the prices may have actually come down.

Insurance companies have taken notice on how medical advances have improved the life expectancy for people with certain conditions. And this can translate into cost savings for you in the form of lower premiums. In some cases you may now qualify for life insurance when you would not qualified before.

Do you have your medical problem under control? For instance, you may have been able to manage your high blood pressure or cholesterol levels with medication. And as long as the drug is doing its job, the insurance company might not classify you as a high risk as they would have before. The same may be said for people who use diet or oral medications to deal with diabetes, asthma, or heart disease.

Maybe you have lost weight, youve stopped smoking, or your illness hasnt gotten worse since the last time you applied for life insurance. Or suppose that you had a disease, such as skin cancer, several years ago but it has not reoccurred. These are all points that an insurance company will consider when determining your rate classification.

If you want to provide additional money when you die for those whom you care about but were afraid that your health condition might make that impossible, return the enclosed coupon. I work with several insurance companies that offer competitive rates for individuals just like you.

A 0% Capital Gains Tax Could be in Your Future

2006-02-06T13:49:00.000-08:00

The most recent major tax law change was passed in May 2003. Within the new rules several taxes phase out and then phase back in. For the alter investor who is willing to set up a plan, one provision in particular could mean significant tax savings.

The tax act reduced the long-term capital gains rate to 15% for anyone in the 25% or higher bracket and down to 5% for taxpayers in the 10%-15% brackets. These rates will remain effective through 2007. In 2008, however, another change emerges when the capital gains tax falls to 0% for individuals in the 10%-15% brackets. This presents some money saving opportunities for you if you are considering giving assets to anyone in a lower tax bracket, such as children or grandchildren.

For example, suppose you own a mutual fund that you want to use to help your grandson when he starts college in 2008. If you are in a high tax bracket, you will have to pay 15% on any gains that you realize on the funds sale.

The IRS specifies that when you give an appreciated asset, the donee receives the gift at your cost basis. Therefore, any untaxed profit is passed on with the asset and taxed based on the donees tax bracket when sold. So if your grandson sells any of the gifted shares between now and the end of 2007, he will have to pay at least 5% on the profits. On the other hand, you could hold off giving him the fund until 2007 and have him keep the account for at least one year. As long as he liquidates the fund in 2008, he will have a good chance of avoiding the capital gains tax. However, based on present law, if he does not sell out until 2009, he could face a 10% capital gains tax.

The new law includes other income and estate tax-savings tactics. Just click on the "contact me" link, and Ill be glad to meet to discuss them with you.

Consider the Income Taxes When You Purchase a Fixed Immediate Annuity

2006-02-06T13:40:00.000-08:00

Fixed Immediate annuities can provide a steady income for a specified period of time that may even surpass your natural life. And how long you choose to take these payments can depend on your present and future income needs as well as your survivors requirements. But there is one more point that you may want to look at when reviewing the various payout options available. And that is the tax implications to you and your beneficiaries.

A portion of the money you would receive each year is a tax-free return of your investment. The balance is taxable. And those amounts can vary among the different payment periods. For instance, suppose that you are a 65-year old male, the IRS gives you a life expectancy of 20 years, and you are offered the following choices for a $250,000 investment:

1) A life only payout ceases when you die and will give you approximately $20,000 per year. Of this amount, $12,500 (1/20th of $250,000) would be tax-free and the balance ($7,500) taxable. If you live longer than 20 years, all $20,000 will be taxable.

2) A life with 20-year certain pays for 20 years or your lifetime, whichever is longer. You would receive approximately $17,500 each year, $12,500 tax-free and $5,000 taxable. If you die before the 20 years has passed, your beneficiary will collect the remainder of the payments with the same tax treatment as you had.

3) A 10-year certain annuity will pay you approximately $28,500 per year for 10 years with $25,000 (1/10th of $250,000) tax-free and $3,500 taxable. If you die before the 10 years has passed, your beneficiary will receive the income for the balance of the term in a like manner.

The above numbers are strictly estimates and for illustrative purposes only. They do not imply any return on a specific investment and do not include the impact of fees and charges on the growth or the payout. In addition, other payout options are available. However, they do show how your investment decisions could affect your taxes.

Is it time to bring back the dogs?

2006-02-03T08:01:00.000-08:00

For illustrations on how the Dogs of the Dow have performed over recent years, please return the enclosed coupon.

Income Makeover

2006-02-03T07:12:00.000-08:00

If you would like a free illustration on how a CRT and life insurance may possibly increase your income, reduce income and estate taxes, and help your favorite charity, please click below.

How Your Variable Annuity Can Help Your Favorite Charity and Leave Something to Your Heirs, Too

2006-02-03T03:44:00.000-08:00

(1) As of the end of the second quarter 2003. http://www.navanet.org/frames/press_dex.htm

How to use LTCI to reduce your taxable estate

2006-02-02T22:50:00.000-08:00

How to Possibly Cover Those Fixed Expenses

2006-02-02T19:33:00.000-08:00

How to maximize the tax efficiency of your variable annuity

2006-02-02T13:02:00.000-08:00

For a free illustration on how to you can make the most of the tax benefits in your variable annuity, check off and return the enclosed coupon.

How to Make the Most of a Maturing Equity Indexed Annuity

2006-02-02T08:22:00.000-08:00

How to Make Sure a Simple Rollover Doesn't Create Big Tax Problems

2006-02-02T03:01:00.000-08:00

A Steady Income with Tax-deferred Growth

2006-02-01T22:21:00.000-08:00

The calculation to determine what portion of your split-annuity should go into the immediate annuity will depend on the current interest rates and the number of years for the payouts.

If you would like to see an illustration of how a split-annuity can provide a dependable stream of tax-advantaged income with principal protection, please click below.

Note: Annuities are backed by the claims paying ability of the issuing company and are not FDIC insured.

How to Leverage Your IRA

2006-02-01T18:01:00.000-08:00

How to Keep up with inflation

2006-02-01T14:35:00.000-08:00

Or perhaps you already have a sufficient amount of your assets invested in stocks and bonds and want something more stable. There is another alternative then that you may want to consider.

For a free illustration of how a fixed immediate annuity with inflation protection can ensure a steadily increasing income, please return the enclosed coupon.

How to create tax dollars to convert an IRA to a Roth

2006-02-01T13:21:00.000-08:00

Which would you rather leave to your family: a taxable account or a tax-free one? Most people would choose the latter. And believe it or not, Congress thought so too.

IRA owners who want to convert to a Roth IRA while they are alive must meet two conditions:

1. Their adjusted gross income must be less than $100,000 for the year of the conversion

2. They must report the amount converted as ordinary income and pay income tax on that amount

For a free analysis on how you can turn taxable income into tax-free income for your beneficiaries, check off and return the enclosed coupon.

How To Get Income From An Old Life Insurance Policy

2006-02-01T11:43:00.000-08:00

For a no-obligation proposal on the income you may be able to receive from your old life insurance policies, please check off and return the enclosed coupon.

How to build an increasing stream of income

2006-02-01T08:01:00.000-08:00

How to build a future income stream and leave a tax-free legacy

2006-02-01T07:54:00.000-08:00

For a personalized illustration of how a life insurance policy can be built around your individual needs, please check off and return the enclosed coupon to schedule an appointment.

Homecare Service Contracts are not LTC

2006-01-31T22:50:00.000-08:00

For an appointment to review your options on how to plan for the cost of long-term care, please check off and return the enclosed coupon or call my office.

Funds that seek to make money in rising and falling markets

2006-01-31T19:26:00.000-08:00

GMP Rider

2006-01-31T18:06:00.000-08:00

How the GMP is determined varies among annuity companies. One example is to base it on the greater of:

1) The value of your purchase compounded at 6% a year, or

2) The highest account balance reached on any contract anniversary date

For more information on how an immediate variable annuity with the GMP rider can give you a lifetime income that can possibly avoid market volatility, please return the enclosed coupon.

Fixed Immediate Annuities Can Offer Flexibility for Your Future

2006-01-31T17:48:00.000-08:00

A Fixed Annuity Offers More Control over Your Taxes

2006-01-31T15:46:00.000-08:00

Fixed Immediate Annuity Can Eliminate the RMD Calculation Each Year

2006-01-31T15:12:00.000-08:00

After-tax contributions may not apply. See your tax professional.

Exactly How safe are fixed annuities?

2006-01-31T08:09:00.000-08:00

I work with several financially-strong, well managed annuity companies. For free information on the safety of their products, check off and return the enclosed coupon.

Even with the New Tax Law, Munis can still look good.

2006-01-31T03:22:00.000-08:00

Various states and municipalities have had to issue more bonds in order to generate badly needed revenue. This additional supply of new bonds has caused many prices to drop.

Don't let poor health keep you from protecting your assets

2006-01-30T23:33:00.000-08:00

It's rare, but occasionally one spouse cannot qualify for long term care insurance because of poor health, such as hypertension, Alzheimer's, arthritis, diabetes, or frailty. Does this mean that the healthy spouse should forgo the coverage as well?

A long term care insurance policy could pay for the care that you need and also provide for a homemaker to help with your spouse. To finance this, you could possibly double your policy's daily benefit above the average per day cost in your area. The surplus income would then be available to help offset your spouse's care giving expenses while you recover.

For someone who is ill, however, his or her life expectancy may not be normal. To accommodate these special situations, some companies offer medically underwritten annuities that factor the annuitant's illness into the life expectancy calculations and may provide higher than normal payouts. The payout numbers can help determine how much you would need to invest cover your spouse's long term care expenses.

For a free analysis that may show you how to protect you and your spouse from the rising costs of long-term care, return the enclosed coupon.

Do You Want to Hedge Your Bet?

2006-01-30T21:30:00.000-08:00

For a no-obligation proposal on a policy that will ease the uncertainty over disappearing estate taxes, check off and return the enclosed coupon. Please include your and your spouses dates of birth.

Dividends Can Maximize your total return.

2006-01-30T18:23:00.000-08:00

You may recall back when dividends were the main reason people owned stocks.

If you would like a list of the dividend-paying investments that I am currently recommending, please return the enclosed coupon.

Could Prices Actually Come Down?

2006-01-30T15:45:00.000-08:00

Consider the Income Taxes When You Purchase a Fixed Immediate Annuity

2006-01-30T13:23:00.000-08:00

A 0% Capital Gains Tax Could be in Your Future

2006-01-30T10:14:00.000-08:00

The new law includes other income and estate tax-savings tactics. Just click on the "contact me" link, and Ill be glad to meet to discuss them with you.

Dividends Can Maximize your total return.

2006-01-24T10:05:00.000-08:00

Dividends Can Maximize your total return.

You may recall back when dividends were the main reason people owned stocks.

If you would like a list of the dividend-paying investments that I am currently recommending, please return the enclosed coupon.

Consider the Income Taxes When You Purchase a Fixed Immediate Annuity

2006-01-23T15:18:00.000-08:00

Fixed Immediate annuities can provide a steady income for a specified period of time that may even surpass your natural life. And how long you choose to take these payments can depend on your present and future income needs as well as your survivors requi rements. But there is one more point that you may want to look at when reviewing the various payout options available. And that is the tax implications to you and your beneficiaries.

A portion of the money you would receive each year is a tax-free return of your investment. The balance is taxable. And those amounts can vary among the different payment periods. For instance, suppose that you are a 65-year old male, the IRS gives you a l ife expectancy of 20 years, and you are offered the following choices for a $250,000 investment:

2) A life with 20-year certain pays for 20 years or your lifetime, whichever is longer. You would receive approximately $17,500 each year, $12,500 tax-free and $5,000 taxable. If you die before the 20 years has passed, your beneficiary will collect the rem ainder of the payments with the same tax treatment as you had.

The above numbers are strictly estimates and for illustrative purposes only. They do not imply any return on a specific investment and do not include the impact of fees and charges on the growth or the payout. In addition, other payout options are availab le. However, they do show how your investment decisions could affect your taxes.

Another option for funding your grandchild's college education

2005-12-12T05:22:00.000-08:00

The 529 plan is scheduled to phase out in 2010; variable annuities are not. In addition, annuity values are not included in the federal formula for financial aid whereas 529 plans are, no matter who owns the plan. If you have a grandchild who is 7 to 10 years away from starting college, contact me so we can discuss how to best prepare for his or her educational needs.

Annuities Require Careful Tax Planning

2005-12-06T04:48:00.000-08:00

Not everyone can qualify for a life insurance policy. Depending on the payout from the annuity, your health and other factors, the payout from the annuity may not cover the full premium payment on the life insurance.

A Steady Income with Tax-deferred Growth

2005-12-05T04:48:00.000-08:00

Have low interest rates and an uncertain economy stopped you from making long-term investments? This reluctance to do anything could come at a cost, such as a reduction of income. Immediate and fixed annuities have often been the investments of choice for people who want steady income and tax-deferred growth. And when used together as a "split-annuity," these investments could possibly provide a return that might keep pace with prevailing interest rates while not tying up all of your funds.

The concept of the split-annuity is that by the time your immediate annuity's term runs out, and the payments stop, your fixed annuity will have grown enough to replace your original investment. Then you can start the process over again at the current interest rates, which could be higher or lower than your prior investments.

The calculation to determine what portion of your split-annuity should go into the immediate annuity will depend on the current interest rates and the number of years for the payouts.

If you would like to see an illustration of how a split-annuity can provide a dependable stream of tax-advantaged income with principal protection, please click below.

Note: Annuities are backed by the claims paying ability of the issuing company and are not FDIC insured.

A Fixed Annuity Offers More Control over Your Taxes

2005-12-02T05:05:00.000-08:00

A study concluded that high tax-bracket investors who had held taxable mutual funds were losing 25% of their returns to taxes each year. And bond funds' returns were shown to have lost almost 40% in 2002.

This loss to taxes can be attributed in part to how portfolio managers control the tax liability that is passed on to shareholders. Because every time the fund manager declares a distribution, such as an interest payment or a short-or longterm capital gain , it flows through to your taxable income. And this happens even if you never withdraw any money. Therefore, if you presently dont need the income from an investment, why pay taxes on its earnings?

Based on the above study's findings, if you invest $100,000 in a bond fund that yields 6%, you would lose up to 40% to taxes. And you will end up with a 3.6% after-tax return. After five years, your account would be worth $119,344. On the other hand, an in vestment that allows interest to accumulate tax-deferred, such as a fixed annuity, with a five-year 5% rate would grow to $127,628.

All of this doesn't mean that bond funds are bad investments. But depending on your present and future needs, a fixed annuity can be good alternative. The interest rate is locked in for a term that you choose, your principal is guaranteed by the claims pay ing ability of the issuing company, and you control when to pay income taxes.

A 0% Capital Gains Tax Could be in Your Future

2005-12-01T05:03:00.000-08:00

The IRS specifies that when you give an appreciated asset, the donee receives the gift at your cost basis. Therefore, any untaxed profit is passed on with the asset and taxed based on the donee's tax bracket when sold. So if your grandson sells any of the gifted shares between now and the end of 2007, he will have to pay at least 5% on the profits. On the other hand, you could hold off giving him the fund until 2007 and have him keep the account for at least one year. As long as he liquidates the fund in 2008, he will have a good chance of avoiding the capital gains tax. However, based on present law, if he does not sell out until 2009, he could face a 10% capital gains tax.

The new law includes other income and estate tax-savings tactics. Just click on the "contact me" link, and I'll be glad to meet to discuss them with you.

Don't let poor health keep you from protecting your assets

2005-11-30T18:16:00.000-08:00

As you get older, the chances of needing long term care increases. Fortythree percent of individuals age 65 and older will spend time in a nursing home. And once they reach age 75, the likelihood rises to 60 percent.v Suppose you are healthy and your spous e is not. As long as you can maintain your good health, you will be able to care for him or her. But what will happen if you need care? Both of you could end up in a nursing home and may even be split up.

A long term care insurance policy could pay for the care that you need and also provide for a homemaker to help with your spouse. To finance this, you could possibly double your policy's daily benefit above the average per day cost in your area. The surplus income would then be available to help offset your spouse's care giving expenses while you recover.

Generally, normal life expectancies determine annuity payouts. This means that the longer the life expectancy, the small the payout.

For someone who is ill, however, his or her life expectancy may not be normal. To accommodate these special situations, some companies offer medically underwritten annuities that factor the annuitant's illness into the life expectancy calculations and may provide higher than normal payouts. The payout numbers can help determine how much you would need to invest cover your spouse's long term care expenses.

For a free analysis that may show you how to protect you and your spouse from the rising costs of long-term care, return the enclosed coupon.

Do You Want to Hedge Your Bet?

2005-11-25T05:53:00.000-08:00

Second-to-die life insurance policies are popular investments for people who want to create cash to pay estate taxes. The plans pay when the surviving spouse dies, and if structured properly; the benefits are kept out of the couple's estate. And quite ofte n, a second-to-die policy is less expensive and easier to obtain than two individual policies. However, with the federal estate tax set to disappear, you may not see the need to prepare for such an expense. But suppose it doesn't go away? Where would your beneficiaries get the cash to cover the taxes?

The federal estate tax exemption for 2004 and 2005 is $1.5 million and in 2009 $3.5 million. Then in 2010, the tax goes away. Yet it is scheduled to return to the original 2002 level of $1 million in 2011. Whether there will be further changes is anyone's guess and has been the subject of much speculation and debate. But do you really want to bet a substantial portion of your estate on the politicians' whims?

For a no-obligation proposal on a policy that will ease the uncertainty over disappearing estate taxes, check off and return the enclosed coupon. Please include your and your spouse's dates of birth.

Dividends Can Maximize your total return.

2005-11-22T04:56:00.000-08:00

You may recall back when dividends were the main reason people owned stocks.

However, that changed over the last few decades and a stocks growth rate was often the first thing investors wanted to know. Now dividends are making a comeback. And it's understandable why. The interest rates on bonds hit a 45- year low, and CDs earn les s than half the rate of inflation. In addition, the recent tax law revisions have dropped the rate on dividend income to a maximum of 15%. But what about the long-term outlook? Can dividend-paying stocks fit into your overall financial picture?

Furthermore, over the past 75 years, dividends have represented one-third of the total return on stocks.v And a recent study concluded that companies that pay high dividends grow faster than firms that reinvest all of their earnings.v The goal of most inco me investors is to earn predictable returns, have the option of receiving cash payouts, and know that their principal will remain relatively stable. These are three possible characteristics of dividend paying stocks. But it's not quite as simple as just bu ying the highest paying stock or fund listed in the newspaper or financial magazine. Because a high dividend does not necessarily mean it is a good investment.

In the fall of 2003, one major firm cut its dividend by 70%. Then other corporation raised its dividend by 75%. And if you don't time a mutual fund purchase properly, you could miss out on the new 15% tax rate and have to pay up to 35% on the dividend inco me.

If you would like a list of the dividend-paying investments that I am currently recommending, please return the enclosed coupon.

Could Prices Actually Come Down?

2005-11-21T16:21:00.000-08:00

Everything seems to cost more than it did a few years ago. Remember when you could buy a new, full-sized car for under $5,000? Or when gasoline was under half-a-buck a gallon? But what about life insurance? Did you think about buying a new policy before yo u retired, but if you had health problems the cost was prohibitive? Perhaps now might be a good time to check it out again because the prices may have actually come down.

Maybe you have lost weight, you've stopped smoking, or your illness hasn't gotten worse since the last time you applied for life insurance. Or suppose that you had a disease, such as skin cancer, several years ago but it has not reoccurred. These are all p oints that an insurance company will consider when determining your rate classification.

Consider the Income Taxes When You Purchase a Fixed Immediate Annuity

2005-11-21T16:20:00.000-08:00

Fixed Immediate annuities can provide a steady income for a specified period of time that may even surpass your natural life. And how long you choose to take these payments can depend on your present and future income needs as well as your survivors' requi rements. But there is one more point that you may want to look at when reviewing the various payout options available. And that is the tax implications to you and your beneficiaries.

A portion of the money you would receive each year is a tax-free return of your investment. The balance is taxable. And those amounts can vary among the different payment periods. For instance, suppose that you are a 65-year old male, the IRS gives you a l ife expectancy of 20 years, and you are offered the following choices for a $250,000 investment:

2) A life with 20-year certain pays for 20 years or your lifetime, whichever is longer. You would receive approximately $17,500 each year, $12,500 tax-free and $5,000 taxable. If you die before the 20 years has passed, your beneficiary will collect the rem ainder of the payments with the same tax treatment as you had.

The above numbers are strictly estimates and for illustrative purposes only. They do not imply any return on a specific investment and do not include the impact of fees and charges on the growth or the payout. In addition, other payout options are availab le. However, they do show how your investment decisions could affect your taxes.

Senior Finance Issues

What is a "Health Savings Account"

What’s Causing the Rising Costs of Health Care?

Homecare Service Contracts are not Long-Term Care Insurance

September is Life Insurance Awareness Month

New book answers long-term care insurance questions

Take the Sting out of Fluctuating Interest Rates

Still Working & Over 70 1/2?

Split Annuity Taxation

Should You Buy a Home for Your Kids?

Recent Tax Act Favors Annuitization

Precautions to Take if You Live in a Community Property State

Plan your IRA Distributions

Another option for funding yourgrandchilds college education

Over 80? Should You Forget About Long Term Care Insurance?

One Size Does Not Fit All

Nursing Home Expenses can Haunt your heirs

Missed Your RMD? Better Get Out Your Checkbook

Might You Live to 100?

Market value adjusted Annuities

LTCI Can keep you out of a nursing home

What You Should Know About Medicare

The Hidden Costs of Medicare in 2006 - An Analysis

Medicare and Your Health

Is Your Mutual Fund Getting Too Big?

Is there an alternative to money market funds for your short-term needs?

Is there a hidden risk in balanced funds?

Annuities Require Careful Tax Planning

Is it time to bring back the dogs?

Insuring for the one Left Behind

Income Makeover

How Your Variable Annuity Can Help Your Favorite Charity and Leave Something to Your Heirs, Too

How to use LTCI to reduce your taxable estate

How to Possibly Cover Those Fixed Expenses

How to maximize the tax efficiency of your variable annuity

How to Make the Most of a Maturing Equity Indexed Annuity

How to Make Sure a Simple Rollover Doesn't Create Big Tax Problems

A Steady Income with Tax-deferred Growth

How to Leverage Your IRA

How to Keep up with inflation

How To Get Income From An Old Life Insurance Policy

How to create tax dollars to convert an IRA to a Roth

How to build an increasing stream of income

How a Roth IRA can save your heirs tax dollars

How to build a future income stream and leave a tax-free legacy

Homecare Service Contracts are not LTC

GMP Rider

Funds that seek to make money in rising and falling markets

A Fixed Annuity Offers More Control over Your Taxes

Fixed Immediate Annuity Can Eliminate the RMD Calculation Each Year

Fixed Immediate Annuities Can Offer Flexibility for Your Future

Choosing theRight Executor

Exactly How safe are fixed annuities?

Even with the New Tax Law, Munis can still look good.

Dont let poor health keep you from protecting your assets

Do You Want to Hedge Your Bet?

Dividends Can Maximize your total return.

Could Prices Actually Come Down?

A 0% Capital Gains Tax Could be in Your Future

Consider the Income Taxes When You Purchase a Fixed Immediate Annuity

Is it time to bring back the dogs?

Income Makeover

How Your Variable Annuity Can Help Your Favorite Charity and Leave Something to Your Heirs, Too

How to use LTCI to reduce your taxable estate

How to Possibly Cover Those Fixed Expenses

How to maximize the tax efficiency of your variable annuity

How to Make the Most of a Maturing Equity Indexed Annuity

How to Make Sure a Simple Rollover Doesn't Create Big Tax Problems

A Steady Income with Tax-deferred Growth

How to Leverage Your IRA

How to Keep up with inflation

How to create tax dollars to convert an IRA to a Roth

How To Get Income From An Old Life Insurance Policy

How to build an increasing stream of income

How to build a future income stream and leave a tax-free legacy

Homecare Service Contracts are not LTC

Funds that seek to make money in rising and falling markets

GMP Rider

Fixed Immediate Annuities Can Offer Flexibility for Your Future

A Fixed Annuity Offers More Control over Your Taxes

Another option for funding yourgrandchilds college education

Choosing theRight Executor

Dont let poor health keep you from protecting your assets