To develop a financial strategy for your future, it's important for your financial professional to see a complete, 360 degree view of your financial picture, including how your retirement assets are integrated and work with one another. We can work in concert with tax professionals or attorneys in your or our network to advise you on specific aspects of your financial strategy.
At Midwest Associates, we offer or can refer you to professionals providing the following services:
Clients We Serve BestWe specialize in retirement income planning for conservative individuals and couples who have successfully accumulated, and want to protect, a retirement nest egg. They are focused on creating a dependable, secure retirement income they can't outlive.
If you are:
- Within 5 -10 years of retirement
- Recently retired, or have been retired for some time
- Tired of volatile market fluctuation
- Skeptical of conventional Wall Street wisdom
- Looking to create and protect a dependable retirement income
We can help. Because we focus on creating steady streams of retirement income, our expertise lies in more conservative investment choices. Speculative investments have no place in a retirement portfolio designed to create income and financial security.
Pre & Post Retirees
Worried about outliving your income or managing your retirement investments?
The change from accumulating wealth to spending it is a dramatic change in your life. People who enjoy a successful retirement find it's good to have an independent, trusted advisor at your side. While it may seem overwhelming to address the complex issues involved in your retirement planning, we have the talent and experience to help you live the life you've planned. Midwest Associates works to bring the retirement you've pictured into clear focus.
The team at Midwest Associates knows that the majority of business owners spend more time working in their business than on their business. We focus on addressing business issues with owners by bringing together the experience of distinguished tax, legal, insurance and financial professionals with institutional experience.
We want to help you protect what you have worked so hard to create, increase the financial potential of your business and assist you in maximizing your retirement opportunities.
Physicians, Surgeons & Dental Professionals
Medical and dental practice owners have specific needs. We address business issues by bringing together the combined experience of tax, legal, insurance and financial professionals with proven methods and experience. Our goal with this program is to help you protect what you have worked so hard to create, increase the financial potential of your business and assist you in maximizing your retirement or early retirement opportunities.
Professional Athletes and Entertainers
A professional athlete is a corporation and brand, and most athletes and entertainers make more money than the average small business. Midwest Associates maximizes a professional athlete or entertainer's earning potential by setting up a corporate structure in which the client can make most of their expenditures where they will be tax deductible.
Back to top
Retirement Income Strategies
Retirement income plans are not just for the wealthy. As retirement nears, the traditional strategy has been to move growth-seeking products to more conservative, fixed-income products. This may have worked fine back when retirement was only expected to last five to 10 years.
These days, however, people are living longer. Thanks to new prescription drugs and medical technology, it's not unusual for someone retiring at age 65 to live to age 90 or longer. You may need to plan for your nest egg to potentially last 25 to 30 years.
One drawback to a longer life is the greater possibility of outliving your savings – creating all the more reason to develop a retirement income plan designed to last a longer lifetime.
A significant loss in the years just prior to and/or just after you retire can have a damaging impact on the level of income you receive over the course of your life. In fact, if a loss occurs earlier in life, there is also the chance that you have more time to recover (versus a significant loss occurring later in retirement). Why? Simply because a smaller pool of assets is left to sustain you throughout your retirement years.
We can help you design a guaranteed* retirement income strategy which incorporates insurance and annuity vehicles to create opportunities for long-term growth as well as guarantee income throughout your retirement.
*Guarantees are backed by the financial strength and claims-paying ability of the issuing company, and may be subject to restrictions, limitations or early withdrawal fees. Annuities are not FDIC insured.
Back to top
Time doesn't stand still, and neither does money. That's why you can use time to your advantage when investing for wealth accumulation.
The longer you invest the more potential your money has to compound interest. If your portfolio has not fully recovered from losses in recent years, you may wish to consider a more aggressive allocation to make up for lost ground and get back on track to accumulating wealth.
However, given recent lessons learned in stock market investing, it is important to remember that more conservative retirement strategies typically have only a portion of the assets invested in the stock market. Other allocations should be set aside for more conservative investments and/or secured income contracts such as annuities. Annuities are long-term vehicles designed to generate supplemental income during retirement. They have minimum guarantees backed by the strength and claims paying ability of the issuing insurance company. After all, the last thing you want to do is lose more ground during the next market correction.Back to top
Because the market does not provide security, you may want your financial strategies to include some secured income products. For example, annuities, which are insurance products with guarantees*, can provide a source of supplemental income throughout your retirement.
Twenty-first century asset protection calls for more than just strategic asset allocation. Product allocation-buying instruments that can protect your monies from market declines throughout retirement- can be an effective means of protecting assets.
Diversifying your retirement assets among a variety of vehicles- both through insurance products and investments depending on what is appropriate for your situation-may offer you the best chance of meeting your retirement income goals throughout your lifespan.
*Guarantees are backed by the financial strength and claims paying ability of the issuing insurance company.
Back to top
Tax Minimization Planning
Rising taxes are a concern for many individuals approaching retirement. It's important to incorporate tax planning into your financial decisions.
Investing in or purchasing a tax-deferred vehicle means your money can compound interest for years, deferring income taxes, providing the potential to earn interest at a faster rate. While very few financial vehicles avoid taxes altogether, insurance products only allow you to defer paying them until retirement – when you may be in a lower tax bracket.
Please note that withdrawals will reduce the contract value and the value of any protection benefits. Additional withdrawals taken within the contract withdrawal charge schedule will be subject to a withdrawal charge. All withdrawals are subject to ordinary income tax and, if taken prior to 59 1/2, may be subject to a 10% federal additional tax.
Back to top
Long-Term Care Planning
As the oldest Baby Boomers begin to wind through their 60s, one of the biggest concerns may not be outliving income, but outliving good health.
For seniors, home health care can cost $50,000 or more per year1, and nursing home care can run as high as $80,0002 per year. Does your retirement income plan account for this kind of possibility? Would you be prepared for twice that number as a married couple?
Considering that you have to exhaust virtually all of your financial means before Medicaid will pay for long-term care and neither your employer group health insurance nor major medical insurance will cover long-term care, it's critically important to plan ahead for these potential expenses.
We can help evaluate your situation and determine if purchasing a long-term care insurance policy may be the right move to help insure your financial future.
1 Genworth 2012 Cost of Care Survey: Home Care Providers, Adult Day Health Care Facilities, Assisted Living Facilities and Nursing Homes
2 MetLife: The 2011 Market Survey of Long-Term Care Costs
Back to top
Estate planning is simply determining (while you're still alive) where your assets should go after you die. Without a properly structured estate plan, your wishes may not be fulfilled, and your loved ones could be hurt both emotionally and financially.
While the concept is simple, the vehicles, planning and implementation process can be rather complex. Because of the potential impact of changes to estate tax law for 2013 and emerging vehicles to help you protect and transfer your assets effectively, it's important to work with experienced estate planning professionals who stay current in this field and advise clients on a day-to-day basis.
We can refer you to professionals to help meet your individual needs.
Back to top
IRA Legacy Planning
IRA accounts have become one of the largest types of assets inherited by beneficiaries. If you don't anticipate needing your IRA money in retirement, you may wish to consider a legacy planning strategy to reduce taxes and increase the payout your beneficiaries will receive upon your death.
A properly structured IRA may provide your beneficiary(ies) a regular stream of income while leaving the balance of IRA assets invested for tax-deferred growth. The result may yield substantially more money paid out over the course of your beneficiary's lifetime.
We can help you evaluate your financial situation to determine if IRA legacy planning may be the best means for ensuring a long-lasting inheritance for your heirs.
Back to top
There are many different types of trusts, and they can be complex to set up and execute. However, a trust can be a very flexible and advantageous means to transfer your assets in the future. Most trusts can also provide current benefits, such as tax deferral and deductions. Unlike a will, a trust may help avoid probate upon your death. To learn more about trusts and how they may benefit you, we will be happy to help you consult a qualified estate planning attorney who may help meet your individual needs in these matters.
Back to top
In the past, retirees could typically count on three sources of retirement income that divided roughly into thirds. The three sources of income have traditionally been government funded Social Security, employer-sponsored components and individual savings. With this traditional scenario, both the government and employer-sponsored components of the plan were considered predictable-reliable income sources that may also be adjusted for inflation. Only one-third of the plan, individual savings, was the responsibility of the individual. Today, however, due to employer-sponsored plans evolving from guaranteed pension payouts to more defined benefit contribution plans, which generally result in a payout in retirement based upon level of individual participation, the majority of the burden for retirement income seems to have shifted to the individual. For this reason, you may want to consider a guaranteed* fixed income component to your retirement strategy. In short, adding an annuity may be an opportunity to help ensure a portion of your retirement income will be guaranteed*.
An annuity is a contract you purchase from an insurance company. For the premium you pay, you receive certain fixed and/or variable interest crediting options able to compound tax deferred until withdrawn. When you are ready to receive income distributions, this vehicle offers a variety of guaranteed* payout options. Most annuities have provisions that allow you to withdraw a percentage of the value of the contract each year up to a certain limit. However, withdrawals can reduce the value of the death benefit and excess withdrawals above the restricted limit typically incur "surrender charges" within the first five to 15 years of the contract. Withdrawals will reduce the contract value and the value of any protection benefits, and because they are designed as a long-term retirement income vehicle, annuity withdrawals made before age 59½ are subject to a 10 percent penalty fee and all withdrawals may be subject to income taxes.
* Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by carrier. Annuities are NOT FDIC insured.
Back to top
Life insurance isn't for those who have died-it's for those who are left behind. When shopping for life insurance, consider needs such as replacing income so your family can maintain its standard of living, as well as paying for your funeral and estate costs. A general rule is that you should seek coverage between five and seven times your gross annual income. As far as the various types of policies go, they can generally be placed into one of two categories: Term and Permanent.
Term insurance generally provides coverage for a specified period of time and pays out a specified amount of coverage to your beneficiary only if you die within that time period. In a level premium term policy you pay the same amount of premium from the first day of the policy until the term ends. A permanent insurance policy, on the other hand, will stay permanently in effect for the rest of your life so long as premiums continue to be paid.
Back to top
What's the problem with getting traditional life insurance coverage as a high-income, or high net worth individual? The cost of the premiums can be substantial because, for many clients, the premiums reduce from current cash-flow or otherwise limit your other investing strategies.
Premium finance is a widely used planning strategy that can allow you to retain all of your current investments, as well as provide the liquidity for numerous risk management strategies (key man life, executive benefits, wealth transfer and charitable giving). Midwest Associates provides financing solutions with low financial risk and minimal out-of-pocket expenses.
Can you have your cake and eat it too?
Most high net worth individuals are familiar with investing using other people's money to purchase assets, and then realizing the benefits, such as generating cash-flow, building equity, or growing a business - without having to tie up their own cash to do so. The end result produces numerous other financial options.
Most business owners are familiar with borrowing money to acquire a rental property. Through the prudent use of financing, the investor only has to outlay a small portion of the total cost of the asset, while still completely benefiting from factors like rental revenue and appreciation. The bottom line is that, all things being equal, the investor who finances his properties is working with much larger figures, and any equity gain is going to be much larger as a result.
Did you know that you can do the same thing with life insurance?
With Premium Financing, it's possible to use other people's money to pay for your premiums - which means that even protecting your family's well-being and lifestyle with a very substantial policy (even one worth several millions of dollars) will cost you very little out-of-pocket.
with Premium Financing, you won't have to liquidate your other investments just to pay for your life insurance premiums. So it really is possible to have the best of both worlds - having a cake and eating it, too.
Call Midwest Associates today to find out how this planning strategy can be used to fund your life insurance planning needs.
Back to top
Our policy review process involves a detailed analysis of eight specific areas that are most often overlooked. With this information, we will give you the resources to make an educated decision to either retain your current coverage or consider replacement coverage.
- Basic Analysis - First and foremost we must establish if the policy is still suitable for the current estate plan as circumstances are constantly changing in clients' lives, as well as in applicable tax law.
- Underwriting Assessment - Assessing the policy rating when obtained and whether or not this was indeed accurate and negotiated well during the underwriting process. We also assess whether or not a lifestyle/health change has occurred which could create room for improvement.
- Lapse Analysis - Unbeknownst to many clients, their policy(s) will eventually lapse due to poor policy performance, leaving the client with a sizeable premium increase if they want to keep the policy in force. It is important to analyze the crediting rates (both guaranteed and non-guaranteed) and their impact on cash values in order to prevent this unexpected sum coming due from the carrier.
- Cost/Fees Analysis - Many policies have excessive fees that need to be compared against industry benchmarks. These fees include loads, surrender charges, mortality/expense charges, subaccount management fees (variable) and other possibly hidden management fees.
- Performance Analysis - During this process, we look at the relationship between the policy's cash values, fees and crediting rates. For variable policies, we also look at the subaccount performance and choices. For whole life, we look at dividend payments and how this affects the policy. Ultimately, we look at how the performance stacks up against industry averages.
- Carrier Stability Analysis - With hundreds of carriers in the marketplace, we provide an assessment of the carrier's financial stability (Moody's, S&P, AM BEST) and we also provide an objective view of the financials and underlying exposure. Lastly, we look at anything in the news that should be of interest or concern.
- Market Comparison - With life insurance rates at historical lows and newer features available, it is important to assess whether there are savings and other benefits available to you should you choose to switch to a new carrier. We will provide a market comparison from 40 of the nation's largest carriers.
- Secondary Market Analysis - A high percentage of policy owners will lapse or surrender their policy(s) in their senior years for a variety of reasons, including a change in circumstance or a dramatic increase in cost. You may be able to achieve significantly more by selling the policy to a third-party institution in exchange for an immediate cash settlement (aka life settlement) OR securing a lender for the premium payments.
Summary of Options - In summary, we will outline your options along with our recommendations to either stay in the current policy, make changes within the current policy, or acquire a new policy.
Probate is the potentially lengthy and costly legal process that oversees the transfer of
your assets upon your death. If you do not create a will or set up a trust to transfer your property when you die, state law will determine what happens to your estate. This is called intestate. Without a will or some other form of legal estate planning, there is the chance that your assets may not be distributed in the manner that you desire.
Back to top
Creating a charitable gift giving plan may provide you with multiple tax breaks: an income tax deduction, the avoidance of capital gains on highly appreciated assets and no estate taxes on the charitable contribution upon your death.
With the increasing tax environment we expect in the U.S. in coming years, there may be compelling reasons to integrate philanthropy into your financial and estate planning.
We can help you find a qualified professional to assist you with this.
Back to top
IRA & 401(K) Assets
When you change jobs or retire, there are four things you can generally do with the assets in any employer-sponsored retirement plan:
- Leave the money where it is
- Take the cash (and pay income taxes and perhaps a 10% additional federal tax if you are younger than age 59½ )
- Transfer the money to another employer plan (if the new plan allows)
- Roll the money over into an IRA
Rolling over from one qualified plan to another qualified plan allows your money to continue growing tax-deferred until you receive distributions in retirement. We can help you determine if a rollover is the right move for you.
If you determine to cash out of an IRA, we can help you find suitable vehicles to help you reach your retirement income goals.
Back to top
Social Security: Know Your Options
Many retirees don't realize there are literally hundreds of different ways to
file for Social Security. You could be costing yourself thousands of dollars of
additional retirement income, or even worse, if done incorrectly, you could be
costing yourself thousands of dollars of additional taxation on your current
aren't sure or haven't had a customized Social Security optimization plan done
for you, please call or email us to request your customized Social Security
Back to top
For guidance on your securities holdings, please consult with your own broker/dealer representative or registered investment advisor.
Neither the Company nor its agents or representatives may give tax, legal, or accounting advice. Individuals should consult with a professional specializing in these areas regarding the applicability of this information to his/her situation.