A Gift That Keeps on Giving

A_gift_that_keeps_on_givingWell, ready or not, Christmas is coming. Our coffee club, made up of mostly seniors, began discussing how much we enjoy our families at Christmas. Even if a family member is not able to be with the others in person Christmas is a time everyone seems to try to connect with each other. The conversation about Christmas lead to each of us having a memory from a childhood Christmas that we shared. The person telling the story seemed to enjoy it more than the others. At our age reliving fun times is special. However, we soon realized that not everyone in the group had happy childhood Christmas memories. One of the guys begins to tell us about his dad having become very ill at a young age. His dad’s company did not offer disability insurance and he had not purchased any either. His mom did the best she could to keep the three kids dressed and keep food on the table. He said they never doubted they were loved but they often wondered why Santa did not visit their house, or if he did, why there were very few toys ever left for them. His stories lead us to the conversation of how it was hard to decide what to give our grandchildren for Christmas as most of them seem to have everything already. Let’s face it; the kids do not want clothes from grandparents. They want something special.

Then it happened: the suggestion was made, “Why not give our children life insurance for Christmas”? Now at first this sounded funny, even sad, to most of us. But as we listened to her explain the plan we all begin to feel it was a wonderful plan. Of course, we pray it never happens to our grandchildren, but if they lost one of their parents would it not be a blessing to know we had given a gift that would help them to be able to go on living the life style they were accustomed too. Nothing can replace a parent but it would be some comfort if everything else did not have to change. Our group started discussing the possibilities of giving a “gift that keeps on giving”. We agreed that with a little explaining, well maybe a lot of explaining, our families would understand we wanted to do something special for them this year. Would the kids really miss one less gift? Most of them would not. Now the choice is ours. Some of us think disability insurance is what we want to give our children. Other said their children had disability insurance through work but needed life insurance. One of the members decided to help by giving medical insurance for the year.

Do you think you would like to give a family member a “gift that keeps on giving”? We realize it may not be a “fun” gift but it sure would be a “peace of mind” gift.

Why not call SMA Serves, Inc. today and discuss the possibilities of giving insurance for Christmas? 1-800-423-4992


After-Tax Plan

After-Tax Plan-01Retirement is something that we will all face sooner or later, but the way we prepare for it may differ from person to person. You may be an employee at a job where you have the option to deposit into a 401(k), an IRA, or some other tax-advantaged savings plan.

These plans provide a number of various benefits and can help you develop a substantial savings when your retirement day arrives. Most of these plans allow for tax deferral on contributions and on earnings/growth and, for some, there is the added bonus of your employer matching your input. Because of these plans implemented by your employer, millions of workers, who otherwise might not be saving for their retirement, are responsibly saving regularly.

Unfortunately, the truth for many people approaching retirement is that a combination of these accounts, in addition to any social security benefits they may receive, may not be enough to provide a comfortable retirement. How will they build up enough money? What options do they have? While a purchased immediate fixed annuity is one option, there is another option that is more flexible and perhaps more attractive from an income tax perspective – after-tax savings and investment accounts.

While what you have heard is true, after-tax accounts do not offer upfront tax deductions/credits for tax-deferred growth; they do offer a number of advantages to the user. Some of these advantages make after-tax accounts attractive complements to standard retirement plans:

There are no contribution limits:
While standard retirement plans have a maximum annual contribution limit, after-tax plans have no limit and allow the user to deposit as much or as little as often or as rarely as they please.

There are no income limits:

Most tax-advantaged plans have income limits. Employer plans limit the degree of participation for workers with high incomes through anti-discrimination rules. IRAs and Roth IRAs impose income caps, which prohibit contributions for years in which the caps are exceeded, although non-deductable IRA contributions are not subject to an income limit. An after-tax account is available to anyone, regardless of his or her income.

Easy access to funds:

Unlike employer retirement funds, an after-tax account gives you the freedom to access your hard-earned money whenever you choose.

Investment flexibility:
Unlike participants who utilize an employer retirement plan, taxable accounts give you unlimited investment options, unlike employer plans or IRA or Roth IRAs, which limit the investment choices by the account administrator.

Couple these benefits with others including tax flexibility, no minimum distribution requirements, and estate planning flexibility, and an after-tax investment plan gives you the options to be in control of your money. A well financial plan can map out the correct mix of retirement plans, IRAs, and Roth IRA accounts, depending on the individual’s goals, access to various plans, income level, time to retire, and other factors. If you would like to begin planning your future to insure that you’re financial stability is in order when your retirement day comes, contact SMA Services today and let us help you become ready for the first day of your retirement.

December Fun Facts

  • Did you know… cats have over 100 vocal chords?
  •  Did you know… elephants only sleep 2 hours a day?
  •  Did you know… the tongue is the fastest healing part of the body?
  •  Did you know… a human brain weighs about 3 lbs.?

Some less exciting but more useful fun facts…

  • Did you knowWhat TPA stands for?—A third party administrator (TPA) is an individual or organization that sets up, manages or otherwise administers your retirement plans.
  • Did you knowWhat a 1099-R is?—A 1099-R is a type of tax form that you will receive if you have taken a distribution from a retirement plan during the year.
  • Did you knowWhat an ILIT is?—An Irrevocable Life Insurance Trust, or ILIT, is a trust constructed for the purpose of efficiently paying estate taxes upon the death of the grantor, or estate owner..

Stay tuned for next month’s Fun Facts!