Kuzma Financial Services

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Financial Services

To develop a financial strategy for your future, it's important for your financial professional to see a complete, 360 degree view of your financial picture, including how your retirement assets are integrated and work with one another. We can work in concert with tax professionals or attorneys in our network to advise you on specific aspects of your financial strategy.

At Kuzma Financial Services, we offer or can refer you to professionals providing the following services:

Retirement Income Strategies Wealth Accumulation Asset Protection Tax Minimization Planning
Long Term Care Estate Planning IRA Legacy Planning Annuities
Life Insurance Charitable Giving IRA & 401(K) Asset Social Security Timing

* Your Insurance Professional and Registered Investment Adviser/Registered Representative is not permitted to offer, and no statement contained herein, shall constitute tax, legal or accounting advice. You should consult legal or tax professionals on any such matters.

Retirement INcome strategies

Retirement income plans are not just for the wealthy. As retirement nears, the traditional strategy has been to move growth-seeking products to more conservative, fixed-income products. This may have worked fine back when retirement was only expected to last five to ten years.

These days, however, people are living longer. Thanks to new prescription drugs and medical technology, it’s not unusual for someone retiring at age 65 to live to age 90 or longer. You may need to plan for your nest egg to potentially last 25 to 30 years.

One drawback to a longer life is the greater possibility of outliving your savings – creating all the more reason to develop a retirement income plan designed to last a longer lifetime.

A significant loss in the years just prior to and/or just after you retire can have a damaging impact on the level of income you receive over the course of your life. In fact, if a loss occurs earlier in life, there is also the chance that you have more time to recover (versus a significant loss occurring later in retirement). Why? Simply because a smaller pool of assets is left to sustain you throughout your retirement years.

We can help you design a guaranteed* retirement income strategy which incorporates insurance and annuity vehicles to create opportunities for long-term growth as well as guarantee income throughout your retirement.

*Guarantees are backed by the financial strength and claims-paying ability of the issuing company, and may be subject to restrictions, limitations or early withdrawal fees. Annuities are not FDIC insured.

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Wealth Accumulation*

Time doesn’t stand still, and neither does money. That’s why you can use time to your advantage when investing for wealth accumulation.

The longer you invest, the more time your money has to compound interest. If your portfolio has not fully recovered from losses in recent years, you may wish to consider a more aggressive allocation to make up for lost ground and get back on track to accumulating wealth.

However, given recent lessons learned in stock market investing, it is important to remember that more conservative retirement strategies typically have only a portion of the assets invested in the stock market. Other allocations should be set aside for more conservative investments and/or secured income contracts such as annuities. Annuities are long term vehicles designed to generate supplemental income during retirement.  They have minimum guarantees backed by the strength and claims paying ability of the issuing insurance company. After all, the last thing you want to do is lose more ground during the next market correction.


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Asset Protection

Because the market does not provide security, you may want your financial strategies to include some secured income products.  For example, annuities, which are insurance products with guarantees*, can provide a source of supplemental income throughout your retirement.

Twenty-first century asset protection calls for more than just strategic asset allocation. Product allocation—buying instruments that can protect your monies from negative returns early in retirement—is generally considered a more effective means of protecting assets.

Diversifying your retirement assets among a variety of vehicles—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you the best chance of meeting your retirement income goals throughout your lifespan.

*Guarantees are backed by the financial strength and claims paying ability of the issuing insurance company.

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Tax minimization Planning

Rising taxes are a concern for many individuals approaching retirement. It's important to incorporate tax planning into all of your financial decisions.

Investing in or purchasing a tax-deferred vehicle means your money can compound interest for years, deferring income taxes, providing the potential to earn interest at a faster rate. While very few financial vehicles avoid taxes altogether, insurance products only allow you to defer paying them until retirement – when you may be in a lower tax bracket.

Please note that withdrawals will reduce the contract value and the value of any protection benefits.  Additional withdrawals taken within the contract withdrawal charge schedule will be subject to a withdrawal charge.  All withdrawals are subject to ordinary income tax and, if taken prior to 59 1/2, may be subject to a 10% federal additional tax.

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Long Term Care

As the oldest Baby Boomers begin to wind through their 60s, one of the biggest concerns may not be outliving income, but outliving good health.

For seniors, home health care can cost $50,000 or more per year1, and nursing home care can run as high as $80,0002. Does your retirement income plan account for this kind of possibility?  Would you be prepared for twice that number as a married couple?

Considering that you have to exhaust virtually all of your financial means before Medicaid will pay for long-term care and neither your employer group health insurance nor major medical insurance will cover long-term care, it’s critically important to plan ahead for these potential expenses.

We can help evaluate your situation and determine if purchasing a long-term care insurance policy may be the right move to help insure your financial future.

1Genworth Cost of Care Survey, 2010
2MetLife Market Survey of Nursing Home, Assisted Living, Adult Day Services, and Home Care Costs, 2009

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Estate Planning

Estate planning is simply determining (while you’re still alive) where your assets should go after you die. Without a properly structured estate plan, your wishes may not be fulfilled, and your loved ones could be hurt both emotionally and financially.

While the concept is simple, the vehicles, planning and implementation process can be rather complex. Because of the potential impact of changes to estate tax law for 2013 and emerging vehicles to help you protect and transfer your assets effectively, it’s important to work with experienced estate planning professionals who stay current in this field and advise clients on a day-to-day basis.

We can refer you to professionals to help meet your individual needs.

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IRA legacy Planning

IRA accounts have become one of the largest types of assets inherited by beneficiaries. If you don’t anticipate needing your IRA money in retirement, you may wish to consider a legacy planning strategy to reduce taxes and increase the payout your beneficiaries will receive upon your death.

A properly structured IRA may provide your beneficiary(ies) a regular stream of income while leaving the balance of IRA assets invested for tax-deferred growth. The result may yield substantially more money paid out over the course of your beneficiary’s lifetime. We can help you evaluate your financial scenario to determine if IRA legacy planning may be the best means for ensuring a long-lasting inheritance for your heirs.

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Life Insurance

Life insurance isn't for those who have died—it's for those who are left behind. When shopping for life insurance, consider needs such as replacing income so your family can maintain its standard of living, as well as paying for your funeral and estate costs. A general rule is that you should seek coverage between five and seven times your gross annual income. As far as the various types of policies go, they can generally be placed into one of two categories: Term and Permanent.

Term insurance generally provides coverage for a specified period of time and pays out a specified amount of coverage to your beneficiary only if you die within that time period. In a level premium term policy, you pay the same amount of premium from the first day of the policy until the term ends. Permanent insurance, on the other hand, does not need to be renewed. A permanent insurance policy, on the other hand, will stay permanently in effect for the rest of your life so long as premiums continue to be paid.

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annuities

In the past, retirees could typically count on three sources of retirement income that divided roughly into thirds.  The three sources of income have traditionally been government funded Social Security, employer-sponsored components, and individual savings.  With this traditional scenario, both the government and employer-sponsored components of the plan were considered predictable—reliable  income sources that may also be adjusted  for inflation. Only one-third of the plan, individual savings, was the responsibility of the individual.  Today, however, the majority of the burden for retirement income seems to have shifted to the individual.  For this reason, you may want to consider a guaranteed* fixed income component to your retirement strategy. In short, adding an annuity may be an opportunity to help ensure a portion of your retirement income will be guaranteed*.

An annuity is a contract you purchase from an insurance company. For the premium you pay, you receive certain fixed and/or variable interest crediting  options able to compound tax deferred until withdrawn. When you are ready to receive income distributions, this vehicle offers a variety of guaranteed* payout options.  Most annuities have provisions that allow you to withdraw a percentage of the value of the contract each year up to a certain limit.  However, withdrawals can reduce the value of the death benefit and excess withdrawals above the restricted limit typically incur “surrender charges” within the first five to fifteen years of the contract. Withdrawals will reduce the contract value and the value of any protection benefits, and because they are designed as a long-term retirement income vehicle, annuity withdrawals made before age 59½ are subject to a 10% penalty fee and all withdrawals may be subject to income taxes.

* Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by carrier.  Annuities are NOT FDIC insured.
 Insurance Only Disclosure:
Your insurance professional is not permitted to offer, and no statement contained herein, shall constitute tax, legal or accounting advice. You should consult legal or tax professionals on any such matters. For guidance on your securities holdings, please consult with a broker/dealer representative or registered investment advisor


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Charitable Giving

Creating a charitable gift giving plan may provide you with multiple tax breaks: an income tax deduction, the avoidance of capital gains on highly appreciated assets and no estate taxes on the charitable contribution upon your death.

With the increasing tax environment we expect in the U.S. in coming years, there may be compelling reasons to integrate philanthropy into your financial and estate planning.

We can help you find a qualified professional to assist you with this.

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IRA & 401(K) Rollovers

When you change jobs or retire, there are four things you can do with the money in your employer-sponsored retirement plan:

  • Leave the money where it is
  • Take the cash (and pay income taxes and perhaps a 10% federal penalty tax if you are younger than age 59½ )
  • Transfer the money to another employer plan (if the plan allows)
  • Roll the money over into an IRA

Rolling over from one qualified plan to another qualified plan allows your money to continue growing tax-deferred until you receive distributions in retirement. We can help you determine if a rollover is the right move for you, and we can help you] find the best vehicle to help conserve and grow your rollover assets.

If you determine to cash out of the IRA, we can help you find the most suitable vehicles to help you reach your retirement income goals.

Neither the Company nor its agents or representatives may give tax, legal, or accounting advice. Individuals should consult with a professional specializing in these areas regarding the applicability of this information to his/her situation.


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social security timing

If you are in retirement or close to retirement age, you will want to make an informed decision about when to start drawing your social security benefits.
 
If you aren’t yet collecting social security payments, you may know how much you can expect to receive based on those letters the Social Security Administration sends you each year.

What you may not have investigated is how different your monthly income can be, depending on whether you start taking payments at age 62, 66, or 70.  There are also considerations about one spouse beginning to collect a portion of the other spouse’s benefits.

These are some of the reasons you will want to consider social security in conjunction with investments and insurance products, as only a portion of your retirement income strategy.

We can refer you to professionals to help meet your individual needs.

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Neither the Company nor its agents or representatives may give tax, legal, or accounting advice. Individuals should consult with a professional specializing in these areas regarding the applicability of this information to his/her situation.