by Frederick “Rick” A. Fisher, MS, CFP®
When stock markets both here and abroad are showing increased volatility, investors tend to worry more about their portfolios than other important aspects of their financial plan. While this is understandable, focusing on the stock market’s ups and downs may distract investors from addressing other parts of their financial plan, particularly their insurance and estate planning.
Investors who have properly allocated their portfolios and have sufficient diversification need not worry about the short term fluctuations of the markets. Instead, they should review their insurance and estate planning at least annually. An estate planning attorney should review an estate plan while an experienced financial advisor should review insurance needs, especially life and long-term care insurance.
Do You Still Need Life Insurance?
The aging of Baby Boomers in America brings a new set of challenges in financial planning. Today’s Baby Boomers are less focused on the accumulation of assets and more worried about their cash flow in retirement. Life insurance that was purchased earlier in life to protect our families earned income may no longer be necessary.
Be Aware of Available Alternatives
These new circumstances bring other risks that we need to insure against, such as long-term care needs. You may be able to use existing life insurance policies to address the new risks, rather than purchasing a separate long-term care insurance policy. For example, if you determine that you no longer need the life insurance you have been carrying, you may be able to take advantage of a tax-free exchange.
One couple in their sixties who no longer required life insurance knew that their policies had accumulated $80,000 of cash value each. They were surprised to learn that they could exchange them (tax-free) into another strategy that would give them $6,000 per month of income towards long-term care if it was needed. If they did not require long-term care, the money would eventually pass to their heirs.
With proactive planning, you may be able to exchange assets that you no longer need into a vehicle that will protect you if you need long-term care in the future. During these uncertain times, it’s important to be proactive and review your financial plan to protect against long-term care costs. Let’s discuss how you can take steps to address these real risks, while you have the assets and health to do so.
About Rick Fisher
Rick Fisher is a financial consultant offering comprehensive financial planning and investment management with Ostrofe Financial Consultants, Inc. in Grass Valley, California. His goal is to help clients prepare for retirement and pursue their financial dreams in a fun and personal way. Rick serves clients in 15 states, though most reside in California, including the greater Sacramento, Los Angeles and San Diego areas.
Credentials and Experience
Rick holds FINRA Series 7, 63, 65, 24, and 51 licenses and is supported by Ostrofe Financial Consultants and National Planning Corporation. He also holds his California Insurance License and the designation of CERTIFIED FINANCIAL PLANNER™ professional (CFP®). The CFP® designation is awarded to experienced financial professionals who pass an examination and pledge to abide by a strict code of ethics. He holds himself to their high standards of integrity, objectivity, professionalism and confidentiality. Please note: NPC does not render tax or legal advice.
How Rick Can Help
Rick strives to take the fear and stress out of financial planning. He works with clients to uncover financial issues they may not have known about or have not yet addressed. Rick and the Ostrofe Financial Consultants team are there to answer questions, guide clients towards their goals, and help them feel confident in their future. To learn more about how Rick may be able to help, call his office at 530-273-4425.