Tag: seniors

How Seniors Spend Their Retirement Expenses [2019 Guide]

It’s something every adult understands—saving for retirement is a necessity. But beyond the nebulous idea of “putting money away for later,” how much do we really know about the actual costs incurred by American seniors? It’s a misconception that spending decreases after retirement; in fact, a study by the Employee Benefit Research Institute shows that 33 percent of all households containing retirees increase their expenses in the six years after they stop working. Whether due to mandatory needs like healthcare or elective spending like travel, seniors have more need than ever to have a handle on their finances and a thorough understanding of income options like life settlements.

Retirement Expenses 2019 GuideFollowing are some of the primary areas where research shows expenses are rising for seniors:

Healthcare

This is the category that hits many senior adults the hardest, because of the obvious surge in medical needs as people age. An article from CNN Money estimates that the average 65-year-old man will spend $189,687 on healthcare in retirement, while an average 65-year-old woman will spend $214,565. Because medical situations and their attendant costs are unpredictable, they are one of the key reasons seniors need to seek alternate sources of income and understand how to plan for healthcare expenses during retirement.

Housing

Even if healthcare costs can mount fast, housing expenses are the most consistent hits on a senior’s budget. A 2015 study from the Social Security Administration indicates that households with people over 65 spend about 35 percent of their funds on housing, more than twice the amount spent monthly on out-of-pocket healthcare, which came to 13 percent. When all of the costs associated with housing are considered—mortgage or rent payments, utilities, maintenance and furnishings—seniors spend an average of $14,034 annually, according to a breakdown in U.S. News and World Report.

Transportation and Travel

Even though some seniors see a drop in gas costs when they stop working, transportation is still the second-largest expenditure, according to the Social Security Administration study, comprising 15 percent of the average senior’s budget. Transportation costs, as well as money spent on hotels, food and other entertainment, tend to rise in the retirement years because of the extra time for travel in retirement years. To mitigate this expense, seniors can seek travel discounts just for those 65 and older, and they can also take advantage of the freedom to travel during off-peak times when working people are unavailable.

Long-Term Care

Americans are living longer and care options are becoming more expensive, a combination that leads to a consistent gap between needs and resources for today’s retirees. Even those who purchase long-term care insurance may find the benefit isn’t sufficient for their needs, and many seniors don’t put money away for the possibility and end up in a financial bind when they need long-term care. A 2017 study by Genworth Financial shows that long-term care, independent of medical bills, costs seniors anywhere from $18,000 a year (adult day care) to $97,000 a year (private room in a nursing home). And it’s a situation the majority of seniors will face; about 70 percent of 65-year-olds will incur some type of long-term care costs in their lifetime, at an average cost of $138,000 per person.

Food

Of course, people over 65 continue to incur the same basic expenses as every other age group, and food is no exception. Seniors can save by using coupons or store discounts, but groceries and dining out still make up one of the major budget categories for older Americans. For the cost-conscious senior, eating at home is by far the more economical option, although travel and other obligations can make the convenience of restaurants much more tempting. An example presented in a 2018 Motley Fool article speculated that if an average meal at a restaurant costs $50, the same food prepared at home would cost $12.50. Using those numbers, the article calculated that a senior who skipped two restaurant meals a month would save $900 a year.

Even though these five categories are typically the ones that cause the most headaches for seniors, other expenses can also be unexpectedly high during retirement—education costs for family members, insurance and entertainment, to name a few. Seniors can help to combat an expensive retirement scenario with a number of strategies, including part-time employment, using their resources as sources of income (such as renting out a room or driving for a ride sharing service), understanding tax deductions for seniors or cashing in an unwanted life insurance policy.

Seniors don’t have to cancel life insurance; instead, a life settlement can turn a burdensome policy into a valuable asset. Magna Life Settlements buys existing life insurance policies, and any senior seeking to budget for retirement expenses should become informed about the growing popularity of such settlements. To learn more, set up a call with a Magna representative today.

*Comments provided in this post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.

What is a Life Settlement? [2019 Guide]

In many circumstances, a life insurance policy is an important investment that can benefit those left behind when a loved one dies. Many financial advocates would recommend life insurance to a client, but those same advisors understand that the efficacy of life insurance often runs its course. What alternatives exist for older policy holders who are still paying premiums despite the fact that their needs have changed and they don’t really need the policy anymore? It is possible that those individuals can sell their life insurance policy for cash value through a life settlement, in which a third party buys an unwanted insurance policy in exchange for cash. Here are some facts about the life settlement option:

The History Behind The Life Settlement Industry

The origin of life settlements dates all the way back to a 1911 Supreme Court case called Grigsby v. Russell. In the 1980s sellling an unneeded life insurance policy for cash became a way for people with diminished health to obtain funds for medical and living expenses. In the years since, legislation and tax laws have created a more favorable climate for consumers looking for options when an insurance policy is no longer needed. Statutes passed in the last five years now mean that 90 percent of Americans are protected by comprehensive life settlement legislation.

What Are The Benefits Of Selling My Life Insurance Policy?

The retirement years are costlier than ever, both because of the rising price of health care and the uncertainty of government resources like social security. A life insurance policy is an asset that can outlive its usefulness; the original beneficiary might not need the proceeds anymore, or the premiums have become burdensome. Under these circumstances, it is worthwhile for a senior to explore an option that can free up cash in the sale of that unwanted policy. Besides the obvious cash windfall, a life settlement also eliminates the premium payments that have depleted even more of a retiree’s limited resources.

Do I Qualify?

Two key variables dictate whether an individual would benefit from a life settlement: the policy holder’s level of health impairment and the cost structure of the policy. The two factors are related, where a policy issued with a higher rating combined with a poor health prognosis can result in a promising settlement offer. For example, if a universal life policy was issued at preferred-plus and the policy holder becomes significantly more impaired than predicted, a life settlement would provide a payout higher than the stated cash surrender value. Some policies are not a good fit for a settlement, and the owner may be better off to either surrender their life insurance policy for cash value, borrow against the policy’s value, or negotiate another option with their carrier. To find out whether a life settlement might be a good fit for you, visit Magna Life Settlement’s simple calculator.

What Are The Steps To Sell My Life Insurance Policy?

Because a life settlement can provide a significant cash payout to help pay for retirement expenses, no one should miss that opportunity simply because they don’t understand the life settlement process. As the word gets out about the potential upside of life settlements, seniors who are likely to benefit from these transactions need guidance about how it works and how to start the process. Here are the basic steps of a life settlement:

1. Determine your eligibility. Using Magna’s calculator, first determine whether your medical status and the specifics of your policy make you a good fit for a settlement.

2. Submit an in-force illustration. With the help of a Magna case administrator, you will request an illustration from your life insurance carrier that spells out what the minimum premium costs would be if you kept the policy until it matures – typically at age 100 – and if the net policy account value at maturity was $1,000. This allows us at Magna to determine how much your policy may be worth.

3. Submit additional healthcare data. At this point, you will fill out a HIPAA form protecting your privacy and submit your health data. This also helps us to determine how much your policy may be worth.

5. Wait for Magna review and informal offer. Then, your Magna representative will calculate the value of your policy and decide whether or not to make you an informal offer, pending the next steps of information gathering.

6. Magna obtains medical records and life expectancy report. These reports verify your policy value so that Magna can calculate an offer that pays out the maximum amount for your policy.

7. If your policy qualifies, Magna extends a formal offer. If you accept the offer, you will receive cash in exchange for the sale of your policy after the sale is complete. This closing process takes some time. Similar to buying a house, a life settlement involves signing contracts.

8. Magna takes over the policy. After the settlement transaction closes, Magna is responsible for paying all future premiums and receives the death benefit once the policy matures.

If you are interested in receiving a personalized life settlement estimate or have questions about the process, contact a Magna representative today.

*Comments provided in this post are for informational purposes only and should not be construed as financial, legal or tax advice, recommendations or solicitations. Please consult your financial, legal or tax professional with questions related to the information presented, or for advice as to whether a life settlement is right for you.

How To Avoid Feeling Stuck In Retirement

The cost of retirement is higher than ever, creating a pressing need for Americans to find ways to prepare financially for retirement as wisely as possible and use their retirement funds well after they stop working. Everyone knows they should prepare for their retirement years so that they can enjoy that season in life rather than feeling stuck, but some fear that they won’t do enough.

Your Guide to Navigating Retirement with Ease

According to the Retirement Confidence Survey conducted by the Employee Benefit Research Institute, 36 percent of current American workers feel “not too or not at all confident” in their ability to retire comfortably. Additionally, 46 percent reported a lack of confidence in having enough resources to pay medical expenses after they retire, and 58 percent doubt they will have enough money for long-term care.

Guide to Navigating Retirement - Magna Life SettlementsThe key to a fulfilling retirement comes when working people take the long view, making decisions in their earlier years that will lead to financial stability and opportunity down the road. By managing debt and seeking sound financial guidance, Americans can plan ahead to create the kind of retirement they have hoped for.

Debt Management

It is never too early to eliminate debt with an eye toward retirement. The seniors who are getting the most of their retirement today–traveling, investing in their interests and their legacy and keeping a financial margin for health care and other unexpected expenses–are the ones who took care of credit card, home, car and other debt while they were working to maximize their options as retirees.

Magna Life Settlement Calculator

Seeking Sound Financial Advice

Too often, individuals start meeting with a financial advisor when retirement is drawing near, but a wiser move is to develop a relationship with a financial advocate early in your working years so that he or she can help map out your path to a fruitful retirement. When financial advisors are well acquainted with their clients’ financial history, family situation and goals, they will be equipped to customize advice and strategies to optimize their clients’ retirement.

Short-term measures to boost income, like life settlements, are one way to help keep seniors from feeling stuck and provide financial freedom in their later years. Connect with your financial advocate to see if this is the right option for you.

Best Blogs to Inform and Enrich Older Americans

Top Blogs for Seniors

Certainly, there are some in the over-65 demographic who still get their news from traditional newspapers and television newscasts, but the newer media can offer a breadth of perspective and information beyond what one can find through old-school means. Because blogs are accessible to anyone and space on the Internet is unlimited, seniors might be overwhelmed when searching for blogs that are worth their time.

Here are five websites with blogs that provide informative, relevant and entertaining content for seniors:

 

The New Old Age

Any blog published by the New York Times can be trusted for accurate and quality information, and this column by Times writer Paula Span covers everything from changes in Medicare and Social Security to specific medical issues for an aging population to current events like the potential concerns with gun ownership by seniors.

My Itchy Travel Feet

This site, subtitled, “The Baby Boomer’s Guide To Travel,” features detailed articles about domestic and international travel destinations, customized for seniors. For the past decade, seasoned travelers Donna and Alan Hull have chronicled their own adventures and also reported on topics like necessary travel gear for retirees, options for group tours or other organized excursions and the latest online travel deals.

Minding Our Elders

Aimed at caregivers and the seniors they care for, this site explores the challenges and joys of elder care with insight and heart. Founder Carol Bradley Bursack examines everything from caregiver guilt and isolation to ideas for helping seniors preserve their independence and dignity. Recent posts include, “Valentine’s Day: Celebrating When A Loved One Has Dementia” and “Some Risk Is Often the Price of Living, Even for Older Adults.”

Squared Away

Administered by Boston College’s Center for Retirement Research, this blog features articles on the most current financial research that can impact seniors, as well as extensive analysis on everything from retirement trends to new financial products for seniors. With a clean look and a foundation in trusted, academic sources, this blog will help retirees answer a range of personal finance questions.

ElderChicks

A space especially for senior women, this blog provides a space for stories about women living out their retirement years in unique and bold ways, recollections from outside contributors and women-specific insight into current events that impact seniors. The site’s forum is a platform for women to support and inform each other, and the “ElderExperts” section features articles from experts on a range of topics.

These links are provided for your information and convenience only and are not an endorsement by Magna Life Settlements of the content of such linked websites or third parties. Magna Life Settlements has no control over the contents of any linked website and is not responsible for these websites or their content or availability. Magna Life Settlements makes no warranties or representations, express or implied about such linked websites, the third parties they are owned and operated by, the information contained on them or the suitability or quality of any of their products or services.

How Selling Your Life Insurance Policy May Help Your Retirement

retirement calculatorPlanning for your retirement can be a daunting experience. There is so much to think about, especially the amount of money you need in order to retire comfortably. Generally, the rule of thumb is that the money you may need when you ultimately retire should fall somewhere between 70 to 85 percent of your income. 

To estimate how much money you may need for your retirement years, you could estimate approximately how much you would be spending in the future. There are certain expenses you probably won’t have to worry about once you’re retired, including expenses related to your children. Your mortgage may be paid off, and you may not have to worry about commuting or other work-related expenses. 

At the same time, there could be new expenses, such as healthcare costs. And you may also travel more after retirement since you will have free time that you didn’t have when you were working.

You should maximize your income flow during your working years so that you can be comfortable after you retire. Following are some of the key ways to increase your retirement income.

Retirement Calculator: How to figure out your retirement score:

Social Security Benefits

Avoid withdrawing money from your Social Security benefits until at least the retirement age of 65 or 67 if you were born in or after 1960. If you continue working until 70, you will receive an additional benefit of eight percent for each year you wait to retire after age 65.

Company Benefits

If your employer offers company benefits, you can take advantage of them and choose those that can give you the maximum income after retirement. You can choose the right investments to reflect your age and risks in a 401k plan. Be wise about when you withdraw so that you can get the most benefit from the plan.

Personal Savings

You can use your personal savings toward your retirement income, but the better option is to make deposits to mutual funds, which can give you considerably more money in the future as they grow.

Whole Life Insurance

If you have a whole life insurance policy, borrowing against the cash value and investing the balance can give you more income when you retire.

Reverse Mortgage

A reverse mortgage can benefit you if you are 62 or older. It lets you free equity in your home and ensures that you don’t have to make future payments.

Avoid Debt

Finally, another good way to ensure that you can retire comfortably is to avoid the trap of debt. Be smart when using credit cards and when taking out loans. Always pay the maximum toward your balance on both in a timely manner. Avoiding getting into debt can help you enjoy full control over your finances. You can also live stress-free when your finances are in good condition. As a result, you have a better opportunity to retire with a sense of security.

Sell Part of Your Life Insurance For Cash

sell life settlement - magna life settlementMany seniors who are informed about life settlements view the sale of their life insurance policies as an all-or-nothing proposition, but policies don’t actually need to be sold in totality. In some cases, a Retained Death Benefit (RDB) offer might better serve the needs of both retirees and their family.

The reasons for entering into a life settlement are varied, but often the sale of a policy is triggered by one of two factors: 1. prohibitively high premiums or 2. changing circumstances that negate the need for the insurance. But there are situations in which individuals still have the need to keep some of their life insurance’s death benefit for their beneficiaries. In those circumstances, a RDB can be ideal.

This solution could work well for a senior who has more than $100,000 in life insurance, since a policy must be worth at least $100,000 to be evaluated for a life settlement. Some policyholders have one large policy, and they might wish to collect cash for part of the policy and retain the rest for the beneficiary of their choice. Others have two or more policies, which might prompt the decision to sell one and keep the other for the sake of the policy’s beneficiary.

What are the advantages of pursing a Retained Death Benefit offer? As in any settlement, the transaction can yield a windfall to help with medical bills or other retirement expenses, but when a senior sells only part of his insurance assets he can still insure that the policy’s recipient benefits as well.  In this case, the senior sells the policy and the investor is responsible for the premium costs. Then, upon the death of the insured, the life insurance carrier pays the senior’s beneficiary and the investor collects the remaining portion of the death benefit.

Seniors deserve to have control over their financial situation, and by carefully evaluating their life insurance holdings and needs they can make a decision that will give them the amount of insurance they need while still providing extra income. Life settlements can provide a key tool for individuals looking to optimize their resources during their retirement years and still provide for their loved ones after their death.

Magna’s life settlement specialists stand ready to help advise those looking to strike the right combination of life settlement and maintenance of insurance. Studies show that 90 percent of seniors let insurance policies lapse without being made aware of the life settlement option, and many of those individuals might have opted for a partial settlement if informed. Try our life settlement calculator or schedule a call with one of our specialists today.

 

Sell Your Insurance Policy and Leave a Legacy

Sell Life Insurance - Magna Life Settlements

Some older Americans find themselves looking for a way to leave a legacy and give back to their community during their retirement years. With enough money in hand for retirement and long-term costs, these seniors find that contributing their money to a charity of choice a fulfilling way to spend their retirement dollars.

For retirees who want to give their money to a good cause, a life settlement can be a large benefit because of the difference it can make for others. The sale of an unwanted life insurance policy can provide an unexpected source of income to be used for any need.

Examples of some ways life insurance proceeds can help build a legacy of generosity include:

  • A significant gift to a charity can go beyond its immediate impact to influence younger generations. When an individual donates money from a life settlement to a worthy cause, his children and grandchildren have an example of giving to others that they are likely to model in the future.
  • By liquidating a low-yield life insurance through a life settlement, a retiree can put the money into a high-return fund, directed by an advisor with an eye toward charitable giving. The fund may grow in value and make an even greater impact on selected charities.
  • Life settlement funds can touch the lives of family members and make memories at the same time. Some seniors choose to use their windfall for a special trip for the entire family, creating a once-in-a-lifetime experience that the family might not have enjoyed without those resources.

Some individuals pursue a life settlement because they need help making ends meet or paying for needs like medical care, but others find themselves in a comfortable financial situation and wonder if a settlement is worth pursuing. But since a settlement can help meet a charitable goal and make a difference in the lives of others, even those with plenty of money can benefit from the sale of a policy that has become burdensome.

Would you like to learn more about the endless possibilities sparked by a life settlement? Magna’s life settlement calculator will reveal whether you are a good candidate for a settlement, and a conversation with one of our specialists will help answer your questions about the criteria and the process. Contact us today.

Bill HR 7203 to Allow Life Settlements to Fund Long-Term Care

Bill HR 7203

A new bill being weighed by the U.S. House of Representatives would make provision for the tax-free rollover of life settlement proceeds into tax-free accounts dedicated to long-term care. The bill, H.R. 7203, was sponsored by Rep. Kenny Marchand (R-TX) and referred to the House Ways and Means Committee on November 30.

H.R. 7203, known as the Long-Term Care Account Act, would provide a significant benefit for seniors who are facing the daunting costs of long-term care. If those individuals have a life insurance policy that is no longer serving them, the bill would permit them to easily use the money from a life settlement to fund an assisted care facility, in-home care or other treatments deemed medically necessary.

The provisions of the Long-Term Care Account Act include:

Tax-free transfer of funds

The tax-free transfer of funds from a life settlement into accounts used exclusively for long-term care expenses. That money can be used for long-term care insurance or any “qualified health expenses” that a medical practitioner would recommend to treat health impairments or maintain health for retirees.

– As long as the distributions from life settlements into the long-term care accounts are used for their stated purpose, they will be exempt from any tax. If funds are used for unauthorized purposes unrelated to long-term care, those expenditures will be subject to both income tax and a 20 percent excise tax.

– If the funds distributed to the accounts from life settlements are not spent on long-term care expenses, they can remain in the account untaxed until the death of the account holder and that person’s spouse.

H.R. 7203 is a win-win for seniors

The Long-Term Care Account Act is a win for seniors looking for new revenue sources, pairing the prime opportunity of a life settlement with the pronounced need of long-term care. Rising health care costs during retirement are one of the chief reasons people over 65 investigate life settlements, and the passage of this legislation would link the two in a way that will provide tangible benefits to Americans seeking to make the most of their retirement years.

Please don’t hesitate to urge your elected representatives to support this important bill. For more information about life settlements or the pending legislation’s, you can contact a Magna representative by scheduling a call today.

 

Trends in Today’s Aging Americans

Trends in Today's Aging Americans - Magna Life Settlements

Everyone who works with seniors knows that the American population is older than ever before, but what are the broader implications of this upward aging trend? How can people over 65 and their advocates optimize the retirement years? Dan Veto, a senior advisor for Age Wave, addressed these questions in depth at the Life Insurance Settlement Association (LISA) Life Settlement and Compliance Conference, held in Orlando in October.

Age Wave, considered one of the nation’s leading thought leaders on the aging U.S. population, engages in relevant research and consulting for a variety of industries that seek to enrich the lives of individuals over 65. Veto’s keynote was geared toward helping attendees understand how to best serve seniors in a rapidly changing demographic landscape. Early in his talk, Veto set the stage by pointing out that “two-thirds of the people in the history of the world who have attained the age of 65 are alive today.”

Research from Age Wave shows that 57 percent of seniors regard the retirement years as a new chapter in life, full of opportunity, versus “a winding down of life”(20 percent) or “a continuance of what life was” (23 percent).

More seniors surveyed about the factors that disrupted their work and retirement plans indicated that a personal health problem forced them to make different choices, and a gap exists between expectation and reality regarding the eventual need for long-term care. While just 37 percent of seniors believe they will need long-term care at some point, 70 percent actually do need it, and therefore many are ill-equipped for the financial demands.

The convergence of a multitude of factors, including rising health care costs, the age wave in America, and the growing gap between the average retirement age and average life span, has raised the profile of life settlements as a valuable option for seniors looking to meet unexpected needs and write the best possible last chapter for their lives.

“These social and economic trends create rising opportunities for life settlements as an option for some seniors who may benefit from an ‘equity release’ of a life insurance policy,” he said. “This may be an option for them to generate income to help fund their retirements.”

How To Pay For A Senior Living Community With Your Life Insurance Policy

Woman holding man's hand

It’s a common refrain: seniors who have always thought they would want to stay in their home as long as possible have a change of heart when they realize how convenient and enjoyable a senior living community might be. Oftentimes, however, there is a high, one-time entrance fee that can range from tens of thousands of dollars to hundreds of thousands of dollars. These entrance fees are used for future long-term care costs. Additionally, monthly prices for such facilities can range from $1,500 to $6,000.

Seniors may be drawn to retirement communities for different reasons—the availability social connections and arts and enrichment activities, the convenience of meals and other services, or the understanding that the regular upkeep of a house has become too burdensome. But since studies show that only about 3 percent of Americans buy long-term care insurance, the desire to move into an all-inclusive community can also bring plenty of financial uncertainty. Even those who have engaged in careful retirement planning are often unprepared for the mounting expenses, and long-term care becomes more expensive every year.

Enter the life settlement, an option for seniors who are holding onto life insurance policies they no longer want or need. By selling an unwanted policy for a payout larger than the surrender value, people over 65 can use the funds to help pay for the entrance fee and/or monthly costs of a retirement community. Life settlements can be the answer for those who find that their monthly income is insufficient to pay for the living situation that best suits their needs in their golden years. A life settlement serves seniors financially two ways: 1. by providing a sum of money to help meet expenses and 2. by removing the burden of paying regular insurance premiums.

It’s easier than ever for seniors to research life settlements and, if they qualify for a favorable sale, to walk through that process with a life settlement company like Magna. The first step is to use Magna’s simple life settlement calculator tool to determine initial eligibility, and from there an individual can schedule a phone call with one of Magna’s settlement specialists to learn more about the settlement offer and the steps to convert life insurance into a windfall.

If your senior living situation is less than optimal and the lack of resources has become a barrier to moving into that retirement community you have been researching, find out today if a life settlement might be the answer. Every day more seniors are learning that their old life insurance policy has hidden value that can improve their lives now.





Life Settlement Calculator

How much can I get for my policy?
Use our quick and easy life settlement calculator to estimate your payout value.




Thanks for calculating your policy value with us

Let’s discuss your life settlement options and next steps. Please enter your email. We will not sell or disclose your information.