Archive for the ‘Insurance’ Category

Shift Your Retirement Risks Away from the Business

Each year more than 500,000 small businesses close their doors, including 20,000 to 40,000 that are shuttered by bankruptcy.¹

Whether you are building a small business or are at the helm of an established, successful enterprise, you know that it can take everything you have in terms of time and money to survive the competition while also turning a profit.

However, allocating too much of your investment capital to one company — even your own — is a risky proposition. Obviously, it would be unwise to devote your entire retirement portfolio to a single investment, but this is exactly what you are doing if you invest in your company to the exclusion of all else.

One way to help insulate your retirement from the risks associated with surviving in business is by investing outside of your company. Sometimes it might seem that your only option is to reinvest profits back in the business in order to keep it growing. But by investing away from the business, you may be able to help insulate your financial situation from fluctuations in the market in which you conduct business.

There are some potential benefits of building wealth outside the business:

Greater bargaining power when you eventually sell the business because you may be able to wait for the best terms rather than accepting the first offer.

Possible alternative source of income to help bridge the gap if the company enters a lean period.

Defense against a reduced retirement lifestyle in the event that your firm pays you less retirement income or fetches a lower sales price than you had expected.

It’s natural to want to put everything toward the success of your business. We can help you evaluate potential investment opportunities and decide whether now is a good time to begin building wealth outside your company.

1) U.S. Small Business Administration, 2008

This material was written and prepared by StoneRiver–Emerald.
© 2009 StoneRiver, Inc.

State Children’s Health Insurance Program (SCHIP) Reauthorization Update February 9, 2009 The expansion and reauthorization of the State Children’s Health Insurance Program (SCHIP) was signed into law by President Obama on February 4, 2009. In California, the SCHIP is known as Healthy Families. This law keeps nearly 900,000 California children in Healthy Families. It also gives thousands more children access to health care. It provides money for 4 ½ years and gives financial stability for Healthy Families. Federal funds provide 2/3 of the funding needed for states to run their SCHIPs.

Making sure Healthy Families has enough money to cover children is important to Governor Schwarzenegger. The Governor is grateful that President Obama shares the same thoughts. Children who need coverage will be able to receive it. The reauthorization will allow California children access to comprehensive health, dental and vision care that is crucial for their healthy growth and development.

Click the following link to read the official press release:

http://www.mrmib.ca.gov/MRMIB/Press_Release_President_Signing_2009.pdf

Doing Fine in ’09?

Although 75% of Americans surveyed in the first quarter of 2008 thought the economic situation was “poor” at the time, 60% thought economic conditions in 2009 would be “good.”¹ Considering the market volatility over the past few months, will we see an improvement in 2009 economic conditions? What will this situation mean for you and your money?

Housing

The housing sector has taken a significant tumble recently. Although some
economists forecast another year of falling home prices, the decline is
projected to be less than half that of 2008.² Former Federal Reserve
Chairman Alan Greenspan speculated that home prices may start to stabilize or
touch bottom sometime in the first half of 2009, but could continue to fall
through 2009 and beyond.³

Interest Rates and Inflation

On October 29, 2008, the Federal Reserve lowered the federal funds rate from
1.5% to 1% and expressed a weaker economic outlook related to worries over the
financial and credit-market crisis. The Federal Open Market Committee said it
“expects inflation to moderate in coming quarters to levels consistent with
price stability….Nevertheless, downside risks to growth remain.”⁴

Before the rate cut, some economists believed that the Fed would have to
raise interest rates in the first six months of 2009.⁵

In a retirement poll conducted early last year, before their retirement
accounts and stock investments plummeted, many Americans already had a gloomy
outlook on the long-term future. In fact, only 29% of respondents were “very
confident” about saving enough to live comfortably in retirement; just 44%
thought they would be able to retire when they want to.⁶

When examining prospects for the near future, it is important to consider
your long-term financial goals. Economies and markets fluctuate constantly. It
can be tempting for investors to make decisions based on short-term fluctuations
without fully considering the long-term consequences.

Call today to discuss ways to potentially capitalize on financial
opportunities in 2009 while keeping sight of your long-term strategy.

1, 6) CNNMoney, March 21, 2008

2, 5) Wall Street Journal Economic Forecasting Survey, September 2008

3) The Wall Street Journal, August 13, 2008

4) Federal Reserve, 2008

This material was written and prepared by Emerald Publications.

© 2009 Emerald Publications

Variables You Can Count On

A majority of Americans aged 55 to 80 have fears about investment risks that
are undermining their confidence to invest in the stock market.¹ But
with traditional pension plans becoming more rare and Social Security’s future
in question, many Americans may need to pursue stock market gains in order to
avoid a retirement income shortfall.

One way to pursue gains in the stock market while also limiting downside
risks is through the use of living benefit guarantees that are offered with some
variable annuities (for an additional cost).

Living Benefits

A variable annuity is a long-term financial vehicle designed for retirement
purposes. The contract holder makes one or more payments to an insurance company
in exchange for the promise of an income stream or lump-sum payment to be made
at a future date. During the accumulation period, the insurance company invests
some of the payments in subaccounts selected by the contract holder that pursue
investment gains in various asset classes, including stocks.

Because it is possible for these investment subaccounts to lose money, some
variable annuities offer living benefit guarantees at an additional cost to help
guard against specific losses. These benefits can ensure that the contract will
reach a minimum value, provide a minimum income amount, or provide an income for
a specified period in the event that the subaccounts underperform.

There are contract limitations, fees, and charges associated with variable
annuities, which can include mortality and expense risk charges, sales and
surrender charges, administrative fees, and charges for optional benefits.
Withdrawals reduce annuity contract benefits and values. Variable annuities are
not guaranteed by the FDIC or any other government agency; they are not deposits
of, nor are they guaranteed or endorsed by, any bank or savings association.

Withdrawals of annuity earnings are taxed as ordinary income and may be
subject to surrender charges plus a 10% federal income tax penalty if made prior
to age 59½. Any guarantees are contingent on the claims-paying ability of the
issuing company. Because variable annuity subaccounts fluctuate with changes in
market conditions, the principal may be worth more or less than the original
amount invested when the annuity is surrendered.

Variable annuities are sold only by prospectus. Please consider the
investment objectives, risks, charges, and expenses carefully before investing.
The prospectus, which contains this and other information about the investment
company, can be obtained from your financial professional. Be sure to read the
prospectus carefully before deciding whether to invest.

1) NAVA, 2007

This material was written and prepared by Emerald Publications.

© 2009 Emerald Publications

Preparing Not to Inherit

An unexpected windfall would certainly be
a welcome gift for many people, but counting on an
inheritance to fund your retirement years could be a grave
mistake. Surveys suggest that only about 2% of baby boomers
have inherited $100,000 or more. Half of the baby boomers
who did inherit funds received $48,000 or less.¹

Numbers like that make it clear that preparing for
retirement will require adequate saving and investing — not
just working hard to stay in the good graces of wealthy
relatives.

More Americans are spending down their retirement savings
while living longer, more active, and more expensive lives.
Volatile real estate values, an uncertain economy, and ups
and downs in the market have also affected many retirement
portfolios. All these factors, in addition to expensive
health-care costs and higher living expenses in general,
could actually result in aging family members having fewer
assets to leave behind.

You may have family members who would love to leave you a
tidy sum, but it could be disastrous to leave your financial
future to chance. Be prepared to fund your own secure
retirement. If a windfall should one day come, you just
might be in the enviable position of leaving a lasting
legacy yourself.

1) The Wall Street Journal, June
14, 2008

This material was written and prepared by
Emerald Publications.
© 2009 Emerald Publications