ARROW Insights

What health care benefits are available in retirement? Health care in retirement is available from many sources. Government programs (such as Medicaid and Medicare) offer numerous health care benefits. However, you may need to purchase supplemental health insurance or Medigap, as well. Most Americans are eligible to begin receiving Medicare benefits at age 65, but qualifying for Medicaid may require some planning on your part. In addition to these resources, you may also be entitled to military health care benefits if you are a veteran, retired servicemember, or the spouse or widow of a veteran or retired servicemember. Continuing care retirement communities and nursing homes also offer health care services for older individuals. Depending on your specific needs and circumstances, you may use any number of these resources during your retirement years.

What is a trust? A trust is a legal entity that is created for the purpose of transferring property to a trustee for the benefit of a third person (beneficiary). The trustee manages the property for the beneficiary according to the terms specified in the trust document.

Long-Term Care Insurance: Introduction Whether you should purchase a long-term care insurance (LTCI) policy depends on your financial ability, age, health status, retirement objectives, and whether you have assets you want to protect. Once you've made the decision to buy, you'll need to decide how much coverage is enough. Insurance protects against an event that may (or may not) occur in the future. Buying sufficient protection is important, but the insurance must also be affordable for you. When considering the purchase of LTCI, you'll need to pay particular attention to the benefit amount and to the benefit period.

Irrevocable Life Insurance Trust: What is it? An irrevocable life insurance trust (ILIT), sometimes referred to as a wealth replacement trust, is a trust that is funded, at least in part, by life insurance policies or proceeds. If properly implemented, an ILIT can help minimize estate taxes and provide a source of liquid funds to your estate for the payment of taxes, debts, and expenses. Generally, assets you own at death are subject to federal estate tax. This includes life insurance policies and proceeds. Estates in excess of the applicable exclusion amount (in 2017, $5,490,000 plus any deceased spousal unused exclusion amount) may have to pay estate tax at rates as high as 40 percent. If you're an insured individual whose estate will have to pay estate tax, your family may receive less money from your life insurance than you originally planned for. An ILIT can solve this problem, and may be especially appropriate if your estate would not have to pay estate taxes were it not for the inclusion of the policy proceeds. Tip: Although this discussion concerns federal estate taxes only, an ILIT can also help minimize state death taxes.

What is life insurance? A contract Technically, life insurance is a contract between the policyowner (which can be you, "the insured," or a separate party) and an insurer. The policyowner agrees to make premium payments, and the insurer agrees to provide a specified sum to a designated third party (the beneficiary) upon your death. Tip: Contracts, including life insurance contracts, are governed by state law. And a will substitute Because proceeds are paid directly to the beneficiary, life insurance can bypass the probate process, saving both expense and delay. Purchased for four primary reasons Life insurance is one of the biggest players in the estate planning game. For some, it is the only way to ensure that family members will be able to support themselves after the death of the primary wage earner. For those with larger estates, life insurance can provide the funds needed to pay estate taxes (and other costs) without liquidating estate assets. For those with a business interest, life insurance can be used as a vehicle for business succession. Finally, for those with a generous spirit, life insurance can permit you to make charitable gifts.

Social Security is a federal system of programs designed to protect individuals and families against economic hardship. Most Americans work in occupations covered by the Social Security system, and they will at some point in their lives receive Social Security benefits. The system is administered by the Social Security Administration and financed mainly by Social Security tax (FICA) withholding on wages and by taxes on self-employment income. How does it work? .....