AFEA Articles

Why Social Security is Running Out of Money
Posted on : 19 April, 2016

More than 55 million Americans receive Social Security benefits, annually, making it the nation's largest social welfare program. 725 billion dollars of your payroll and income taxes last year went to Social Security disbursements -- That's about 60 billion dollars in benefits each month. It's no wonder politicians on both sides of the aisle are always trying to convince voters that they have the plan to keep Social Security intact. The problem is Social Security, as we know it, is currently living on borrowed time.

 To understand the issue let's first take a quick history lesson. The Social Se.........

How Long Will It Take To Pay Off The U.S. Debt?
Posted on : 19 April, 2016

America’s debt now tops $16 trillion, and the meter never stops running. The national debt increases by about $35 million an hour, and around $2 billion every 24 hours. As the country’s debt skyrockets, politicians and pundits are debating how to get it under control. If nothing is done, we could be $17 trillion in the hole later this year. But for the first time in six years, the federal government said it would make a small down payment on the national debt – about $35 billion worth. They say higher tax receipts and recent spending cuts helped raise the money. Which brings us to the topic of this Just Explain It. What exactly is the debt? .........

Cash From Your Life Insurance
Posted on : 16 October, 2015

 If you bought a whole-life insurance policy when your kids were still in pull-up pants, you’ve probably built up a sizable stash of cash. And if you’re heading into retirement with a decimated investment portfolio, a mortgage and increased medical expenses, that cash in your policy may be more useful now than later -- especially if your loved ones don’t need the death benefit after you’re gone.

To get at the cash, your options include partial withdrawals, policy loans, cashing in the policy and letting it lapse, trading your policy for an annuity or long-term-care policy, or selling your policy to a life-settlement company. A permanent li.........

US seniors risk outliving their money
Posted on : 15 October, 2015

A new study indicates that the elderly in 48 states and the District of Columbia won't be able to replace the recommended 70% of their pre-retirement income.

How much do we need for retirement? More than what we're currently saving, apparently.

A new study from found that seniors in 48 states
and the District of Columbia are at risk to outlive their retirement monies.


The golden years aren't all that golden: Nationally, the average income of the 65-and-older
crowd is only 57% of the money earned by those aged 45 to 64.

Annuities in 401(k)s: New Regulations Highlight Importance, Create Opportunities
Posted on : 14 September, 2015

On February 2, 2012, federal officials from the Council of Economic Advisors to the President as well as the U.S. Treasury and Labor Departmentsreleased statements that highlight the importance of workers using financial products—annuities—that provide guaranteed lifetime income. They also released new regulations designed to increase workers’ access to such financial products within their employer-sponsored 401(k) plans.

These regulations will gradually create new opportunities for 401(k) plan participants who desire guaranteed lifetime streams of income. However, they also remin.........

The Five Stages of Retirement Planning Angst
Posted on : 19 April, 2016

I HAVEN’T a clue what kind of psychiatrist Elisabeth Kübler-Ross was. But I do
know she was a terrific financial planner.

Dr. Kübler-Ross, who died in 2004, is best known for
identifying the five stages of grief that people go through once they
understand they are dying. And those stages — denial, anger, bargaining,
depression and acceptance — describe perfectly my reactions when I read
recently that, according to Fidelity Investments, my wife, Alison, and I will
need to save eight times our current annual income to come even close to having
the kind of retirem.........

Getting What You Need for Retirement
Posted on : 04 February, 2016

 You can’t always get what you want.  But if you try sometimes you just might find you get what you need.  

Rolling Stones, 1969.

There is nothing better that most people can do to get what they’ll need in retirement than delaying when they start collecting Social Security.

The recent PBS documentary, “The Retirement Gamble,” sounded the alarm for many viewers who may be ill-prepared for the financial challenge of a long life – and not much retirement savings in the bank.

To address this growing issue, financial advisers often e.........

Top 10 Annuity Myths Exposed
Posted on : 04 February, 2016

By Kevin Dufficy
Courtesy of Annuities Institute

New market report reveals annuity critics are often biased and incorrect in their perceptions of annuities within retirement planning

While annuities have played an integral role in retirement planning throughout most of the last century, a new report reveals that the average consumer is now ten times more likely to read information designed to discourage annuities rather than endorse them.

The market study completed by Annuities.........

5 Ways to Afford Early Retirement
Posted on : 04 February, 2016

By Kevin Dufficy

For most Americans, the prospect of early retirement seems more remote than ever. The recent turbulent financial markets, falling real estate prices and low interest rates have combined to drastically reduce the number of people for whom this is a viable option. However, it's still not impossible to stop working early, for those who are willing to work harder during their younger years.

If you are one of the people who strive to retire earlier rather than later, there are a number of strategies that help you reach this objective:

Posted on : 04 February, 2016

Mistake No. 1: Live only for today

IRAs, or individual retirement accounts, may be trickier than you think. And what you don't know can cost you money. Many of the most common IRA mistakes occur simply because people don't know the rules governing these accounts -- of which there are many. Complex rules provide many opportunities for things to go awry, but the biggest mistake with IRAs may be not contributing to one at all.

"If you don't put anything in, you won't have anything at the end," says IRA expert Ed Slott, president of Ed Slott and Co., and author of "The Retirement Savings Time Bomb … and How to
Defuse It."

Each year that you.........

Posted on : 04 February, 2016

September has been declared "National Life Insurance Awareness Month." This is a great time to assess ones needs, educate oneself on the topic, and develop a financial plan that incorporates adequate coverage for all areas of risk management, including life insurance.

In years past, life insurance was sold and thought of as burial insurance. Many individuals today still use it primarily to pay for burial or final expenses as these costs can be a financial burden on families. There are several other good reasons to purchase life insurance, including replacing lost income, paying outstanding debt, and planning for children's education.

One of the most important roles of life.........

Posted on : 04 February, 2016

LIMRA recently tested Americans’ financial literacy and I have to say, while I was not surprised by the results, I was certainly disappointed. A third of Americans answered less than half of the answers correctly, and when asked to measure their own level of knowledge, the majority said they had little to no knowledge of financial matters.

Why does this matter? Behavioral economic research suggests when people are unsure what to do with their finances, they often do nothing — and certainly our research attests to that. More than 50 percent of US households say they need life insurance, yet fewer than a quarter will actually shop f.........

Posted on : 04 February, 2016

(AFEA's Note: This is not part of the original article below.  Although this provision was eliminated from the Bill, it is important to point out that it seems the government has a very watchfull eye on the Qualified Plans of this nation and as the editor says in his note, "there's a good chance we'll see this rule crop up again."  With this in mind we believe that as part of National Save for Retirement week 10/20 - 10/26, it is important to make sure Americans know how potential new legislation or ideas from old legislation that is re-introduced might affect the Qualified Plan Arena.  Please note that AFEA believes that saving for reti.........

Posted on : 04 February, 2016

(AFEA Note: This is not part of the original artical below. As a continuation of our previous post, here is yet another and more recent piece of legislation aimed at IRA's.  Given this legislation focuses on the current saver vs the second generation of the IRA, it still shows that Qualified plans [IRA's in particular] are a major target of the government in finding a new source of tax revenue to help reduce our countries debt.  With this in mind we believe that as part of National Save for Retirement week 10/20 - 10/26, it is important to make sure Americans know how potential new legislation or ideas from old legislation that&nb.........

Posted on : 04 February, 2016

By Sheryl Southwick, Director of Compliance, TriNet

There are millions of articles and webpages that describe the Affordable Care Act (ACA). At least the same amount of articles and websites provide insight and opinions on this major piece of U.S. legislation. At TriNet, we serve over 7,000 small and medium-sized businesses throughout the U.S. as a strategic partner for payroll, HR, benefits and employment law compliance and risk reduction; and we have noticed a growing – and wrong – notion that not all small businesses need to take action on the ACA. Some also believe there are clever workarounds – there are not.

ACA myths and l.........

Posted on : 04 February, 2016

By Bill Broich

1. Outsmarting Longevity Risk: Income Rider.  Income riders changed the deal. No longer accurate is the perception that insurance companies are offering income so when the annuitant dies, they keep the money.  For years, this has been the myth.  The creation of fixed indexed annuities with income riders (guaranteed lifetime benefits) means retirees can enjoy lifetime income, protect against living too long and still have control of their money if they choose.

2. Banks Yields Are Low and Will Remain Low.  It is a political guarantee based .........

Posted on : 04 February, 2016

Ed Slott

Spouses' division of 401(k)s, IRAs and other savings plans requires
special handling

8, 2014 @ 12:01 am (Updated 11:41 am) EST 

Splitting a retirement
plan in divorce often means tax problems. While matrimonial attorneys usually
assist in the division of assets, 401(k)s, IRAs and other retirement plans
require special handling since eventual distributions generally will be taxable. Unlike most other assets, retirement funds received are not worth face value once taxes are .........