Worried about the direction the financial markets have taken over the past few months? You’re not alone. After nine consecutive years of growth, the markets ended 2018 on a down note. The S&P 500 finished the year down more than 6 percent, the first time it has ever finished a year negative after being positive through the first three quarters.1
 
In fact, some indexes have already entered bear market territory. The Nasdaq dropped more than 23 percent from its Aug. 29 high. The Wilshire 5000 and Russell 2000 also dropped more than 20 percent from their respective peaks in early September.1
 
If you’re approaching retirement, these losses could be stressful. When you’re younger and just starting your career, you have time to absorb losses and recover. That may not be the case if you’re only a few years from retirement. You’ll soon need to use your assets to generate income. A substantial decline may force you to delay retirement or make cuts to your planned lifestyle.
 
Fortunately, there are steps you can take to protect your nest egg and your retirement. Below are three tools that can help you reduce your exposure to downside risk. Talk to your financial professional to see how these may play a role in your financial strategy.
 
Diversification 
Nothing can protect an individual completely from market volatility, however aligning your portfolio with your risk tolerance, timelines and goals is a great starting point. Constructing a well-balanced and broadly diversified portfolio may help lower the exposure to risk. Working with a financial advisor to review your current plans to see if they are aligned with what you are wanting to accomplish can be very helpful. When doing something as important as preparing for the future, you don’t have to go it alone.
 
Fixed Indexed Annuity 
When it comes to investing, risk and return usually go hand in hand. Those assets that offer the most potential return often come with the highest exposure to risk. Assets that have little risk also offer little potential growth. It’s difficult to find growth opportunities that don’t have downside market risk.
 
There are some tools available, though. One is a fixed indexed annuity. In a fixed indexed annuity, allows your money the potential to grow on a tax-deferred basis. The potential growth comes in the form of interest credited to the contract typically anually.
 
Your interest credited each year is based on the return of a specific external index, like the S&P 500. The better the index performs in a given period, the higher the potential for the interest credits, up to a certain limit. If the index performs poorly, you may receive less or zero interest, but your contract won’t decline in value.
 
Fixed indexed annuities have guarantees* on the value of the contract. That means you’ll never lose premium because of market declines. A fixed indexed annuity could be an effective way to plan for retirement income without exposing yourself to market risk.

​Deferred Income Annuity 
Are you concerned about your ability to generate retirement income in the future? Or are you worried that your retirement income isn’t guaranteed*? A deferred income annuity, also known as a longevity annuity, could be an effective option.
 
With a deferred income annuity, you contribute a lump-sum amount and pick a date in the future to begin receiving income. At the specified time, the annuity company will begin paying you an income stream that’s guaranteed* for life, no matter how long you live. Work with your financial professional to project your income and see if a deferred income annuity can help you fill any gaps.

Life Insurance 
You’ve probably purchased life insurance at some point in your life with the goal of protecting your spouse, children or other loved ones. Life insurance is a highly effective protection tool, but it can also do more.
 
Some life insurance policies have a cash value account. Each time you make a premium payment, a portion goes into the cash value. Those funds grow on a tax-deferred basis over time. The growth usually comes in the form of dividends or interest, depending on the policy. You can also use the life insurance policy to generate tax-free income in retirement via loans or withdrawals.
 
If you have a life insurance policy, you may want to explore how you can use it to achieve low-risk, tax-deferred growth and possibly create supplemental income in the future. Or you may want to look at new policies and see how they can help you protect your assets.
 
Ready to protect your nest egg? Let’s talk about it. Contact us at Heritage Financial North. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
 
1https://www.nasdaq.com/article/is-a-recession-coming-heres-how-to-survive-cm1081931
 
*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
18496 - 2019/2/6

At first glance, you may not think that work and retirement mix. After all, retirement is all about leaving the working world. How can you enjoy your newfound freedom and lifestyle if you’re still working?
 
Working doesn’t have to mean giving up your freedom, though. You could work part time or seasonally. You could work as a coach, consultant or trainer and manage your own schedule. You could even freelance or drive for a ride-sharing company.
 
No matter which route you take, there are serious benefits to working in retirement. Obviously you get supplemental income, which could help you maintain your retirement assets and enjoy greater financial stability. Work could also provide socialization opportunities and help you meet new friends.
 
There are also a few considerations that you shouldn’t ignore. Are you healthy enough to work in retirement? What kind of schedule would allow you to still enjoy your retirement? And perhaps most important, how will the extra income affect your Social Security benefits?
 
Social Security is an important resource for retirees. In fact, nearly 90 percent of all Americans age 65 and older rely on Social Security for income.1 If you’re like most, Social Security will play an important role in your financial picture.

Does work impact your Social Security benefits? It depends on a number of factors, including your earnings and your age. Below are a few important guidelines to keep in mind as you plan your retirement strategy:

Before Full Retirement Age (FRA)
 
The earliest you can file for Social Security is age 62. You can file at this age even if you are still working. Regardless of whether you’re working, however, filing before your FRA could lead to a big reduction in your benefits, perhaps as much as 35 percent.2 Despite the potential reduction, many people choose to file for benefits as soon as they’re eligible.
 
The benefit reduction could be compounded if you file early and choose to work. Before your FRA, you can earn up to $17,040 in a year without seeing a reduction in your benefits. After you cross that threshold, however, your benefit is reduced by $1 for every $2 you earn. If you plan on continuing to work, think carefully about whether it makes sense to file for Social Security.3

Year of Your FRA
 
Most people’s FRA lands at some point between their 66th and 67th birthdays. The actual month depends on your date of birth. You don’t technically reach your FRA until that month arrives.4
 
Once you reach the year of your FRA, Social Security makes an adjustment to the work reduction. In that year, you can earn as much as $45,360 without seeing a reduction. Keep in mind that those are your maximum earnings up to the month in which you reach your FRA. After you cross the threshold, your benefit is reduced by $1 for every $3 you earn.

 After Your FRA 
 
In the month you reach your FRA, you can start working with no benefit reduction and no earnings limit. You can earn as much as you want and still receive your full Social Security benefit. At this time, Social Security also recalculates your benefit amount and excludes any months in which your benefit was previously reduced because of earnings penalties.
 
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.
 

1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
2https://www.ssa.gov/planners/retire/agereduction.html
3https://www.ssa.gov/planners/retire/whileworking.html
4https://www.ssa.gov/planners/retire/1943.html
 
Advisory Services Offered Through Change Path LLC, a Registered Investment Advisor. Heritage Financial North and Change Path LLC are not affiliated.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
17846 – 2018/7/30

​Is retirement approaching? Worried that you won’t have enough money? You have company. According to a recent study from the Transamerica Center for Retirement Studies, baby boomers have a median retirement savings balance of only $147,000.1 While that number may represent a good start, it’s unlikely to be sufficient to fund a long retirement.
 
Baby boomers face a number of unprecedented retirement challenges. Many don’t have pensions, which means they have to shoulder the burden of funding their expenses in retirement. Retirees also have to contend with a longer life span, which means they need to cover more years of spending. Health care is also a substantial area of expense.