What's new at GFP:
At the end of February, our team member Courtney went to an insurance conference with the folks at LLIS to learn more about their products and services to better serve our clients. LLIS is an insurance broker out of Tampa, Florida with plenty of resources for us as advisors and you as a client. They provide information on life, long-term care, and disability insurances as well as quotes from several companies to help you make decisions on possible policies for you to purchase, as well as existing policies.
Life insurance serves several purposes. It provides income to your loved ones when you are no longer there to financially support them. It gives you tax-free means of estate transfer. It could serve a small business owner in a buy-sell agreement. Life insurance can be one of two basic types: term and permanent. Term is the least expensive and covers a certain period like when your kids are dependent on you, or for the term of your mortgage. Permanent insurance is more expensive but it accumulates value. There are many types of permanent life insurance and can serve different purposes depending on your needs.
Disability insurance can be even more important than life insurance. Per the Council of Disability Awareness "one in four 20-year-olds will become disabled before they retire. You may be surprised to discover that accidents aren't usually the culprit, however. Back injuries, cancer, heart disease and other illnesses cause most long-term absences." Disability insurance pays a percentage of your income if you are unable to work to support you and your family. Employers often offer both base coverage and supplemental coverage for long-term disability, but it may be worth getting an individual policy that will follow you to any employer.
Long-term care (LTC) insurance is one of our highest priority items to discuss with clients. It helps pay for skilled care or assistance with simple activities for people with chronic illnesses, disabilities and other conditions. It may cover nursing home, assisted living, adult day care services, home care, home modification, and care determination. The cost of care can derail a retirement plan and cause burden and stress to loved ones. Coverage can get pricey, but the coverage, should you need to activate your policy, will far outweigh what you pay into it. Some employers offer LTC policies, you can get a policy through state sponsored programs, and through individual plans offered through LLIS.
We will touch upon property, liability and casualty insurance as well as health insurance and employee benefits in upcoming newsletters.
Visit LLIS.com if you are interested to learn more. Take advantage of their many resources and even request a quote. Clients can schedule a phone call with Debbie to discuss your life, disability, and long-term care coverage and how that fits in with the rest of your plan.
Fund Spotlight: BNDX
Vanguard’s Total International Bond Fund is a low expense exchange traded fund compared to thousands of government and corporate bonds (basically IOU’s that pay back interest). We like this fund for our clients because of its high credit quality bonds and broad exposure across major bond markets outside of the United States including Japan (21%), France (12.1%), Germany (10.2%), Italy (7.7%), and the UK (7.3%). Investors are strategically protected against fluctuations in exchange rates and the fund is passively managed, which helps to keep the expense ratio low. Bond funds help protect client account balances from stock market swings.
Tax withholding:
As people begin finalizing their 2018 tax returns, many of our clients are noticing a larger (significantly larger in some cases) tax bill than in recent years. Taxpayers are feeling the effects of the Tax Cuts and Jobs Act that was passed in late 2017, including some itemized deductions (employee business, tax preparer, and investment expenses) as well as reduction in state and local tax deductions. These changes warrant a look at your tax withholding amounts on your sources of income in order to optimize your taxes for 2019. The IRS has a withholding calculator on their website, as well as a PDF of the most current Form W-4 that you can submit to your employer to adjust your withholding. Find those resources here and consider scheduling a phone call with Debbie to discuss whether you should revisit your tax withholdings for 2019 and other tax planning actions you can take.