Is it ever too early to start thinking about money for the future you? Is it ever too late?
These are the questions we delved into on my Little White Lie Show with the awesome Kim Harris, AKA Legacy Creator. She empowers her clients to become financially capable so they can live remarkably. Kim’s answer? No, it’s never too early – and it’s never too late – to start thinking about your financial legacy.
You can watch the whole show here (don’t miss checking out Kim’s personal story – it might resonate with you)
We may be ready to rock whatever age we are – and you know we Little White Liars are doing that!
But the sober truth is that society (tax laws, insurance companies, financial institutions) DOES pay attention to “age”. So Kim encourages us to be informed and really smart about money. Because the longer we wait, the lower our chances of having a substantial amount of money to live on remarkably.
And here’s another sober truth: “Women are less likely to be financially prepared”.
This is because so many of us have been dependent on our significant other, usually the husband, to provide for us. “So we end up in this spot where if that doesn’t work out, then what do I do?” What’s more, the mortality tables state that women are living beyond eighty, and likely to outlive their male partners. Kim says, “I don’t want to work in my 70s and 80s. So, what do I do? How do I deal with that?”
I’m with Kim on that – how about you? Let’s dig in and see what recommendations she has for us …
Kim’s bottom line: “The trick is to use the tax laws to receive favorable tax treatment from the IRS,” so you can keep as much of your money as possible.
How do we protect our money for the future?
#1 “Consider a whole life policy. If you have not reached age 62 yet, you are still good to go… 62 is that age where life insurance companies say, “Okay. Well, no. She’s a little bit closer to the mortality rate than we like,” and it’s going to be harder for you to get insurance. But if you haven’t reached 62 and you’re in pretty good health, you can get a whole life policy that’s structured properly to protect you.”
#2 “Build your cash reserves, what I call a longevity plan.” For example, look into an annuity “which can provide you with what is called consistent income. Now, there are three types: deferred, immediate, and variable. These are fixed income annuities, but you can get them disseminated in either of those three ways.” The beauty is that annuities can be “guaranteed income for the rest of your life, no matter what your initial payment is.”
#3 “If you’re already at retirement age, say 62, you are a woman, and you don’t have enough money to live off of,” the third option may best. You pay an upfront cash amount in your annuity and take the payments later. You have 10 years to generate income, and “when you take that money at age 72 versus at 62, you’re able to take a consistent annual income.”
If you’re anything like me, you probably have lots of questions.
Do consult with a financial advisor about the possibilities – or talk to Kim! Either way, do what she does with her clients. Work out different scenarios, like “this is what a whole life policy is going to look like with your cash reserve after 10 to 15 years. This is what your annuity payments are going to look like if you decide to take your payments after 10 years,” and so on.
Don’t go it alone – get informed!
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