​While retirement and financial independence share some similarities, there are slight differences between the two. Retirement is part of a natural life cycle. You work for a long period of your life saving money. Then, once you reach retirement age, you stop working and enjoy the rest of your life in the manner that you wish.
 
Financial independence, on the other hand, is something that can be achieved at any age. You’re financially independent when you have enough assets and resources to decide on your own terms how, when and where you work. You may work, or you may not, but the decision is up to you.
 
Many people strive to reach financial independence early in life, mainly so they can enjoy the life they want to live in their younger, healthier years. While challenging, it is possible to achieve financial independence well before retirement age. Below are a few steps to get you started:

Get good at saving.
 
Knowing how to save money is a critical part of gaining financial independence. A great way to get in the saving habit is to pay yourself first. Create a budget and make savings a mandatory expense item. Pay yourself before you pay any other bills. After doing that regularly, you’ll get in the habit of contributing to your savings on a consistent basis.
 
Being frugal is another important piece of the savings puzzle. Maybe you can get by with a used car instead of a new one. Or perhaps you can use public transportation and services like Uber to avoid car ownership altogether. Instead of going on that costly vacation, maybe you can scale it back to a more affordable itinerary.
 
When you avoid substantial purchases, you free up cash flow to allocate toward savings. A budget can help you manage this process. If you don’t use a budget, now may be the time to get in the habit.

Avoid a costly home purchase.
 
Owning a big home is part of the American dream. It’s natural to want a big house, and if you have the means it can be a very tempting purchase. But big homes come with big expenses, such as the mortgage, taxes, maintenance, repairs, HOA fees, utilities and more.
 
If you’re looking to become financially independent at a relatively young age, you may want to consider a more modest home purchase. A smaller, less expensive home usually leads to reduced costs for your mortgage, taxes, maintenance and more. You also may be able to pay off the mortgage faster, freeing up cash flow to save or to support your lifestyle.
 
Also, don’t overlook the idea of renting. Yes, renting does create a regular monthly payment, but it also eliminates costs for taxes, insurance, maintenance and even some utilities. It could be a good strategy for you.

Develop multiple streams of income.
 
You may find that your salary isn’t quite enough to generate the kind of savings you need to achieve financial independence. Or perhaps you’re close to becoming financially independent but also need some part-time, side income to strengthen your financial stability.
 
Consider developing multiple streams of income either to boost your savings or to use as a fallback. For example, if you have a particular professional skill, you may consider picking up freelance work on the side. Doing this can create an additional stream of revenue and let you put more of your income toward your savings accounts.
 
Also, if you have a hobby or an interest, you might consider looking into monetizing it. You could also look into online platforms like Uber or TaskRabbit that let you make money when it’s convenient for you. Or perhaps you could teach others, giving lessons in your particular skill set either in person in your community or online.
 
Looking for financial independence? Contact us at Binversie and Associates today. We welcome the opportunity to help you examine your needs and develop a strategy. Let’s connect soon and start the conversation.
 
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.
16293 - 2016/12/19

​Remember hunting for Easter eggs as a child? There were few thrills more exciting than racing around the yard or a park to find as many eggs as possible. Your eggs may have contained candy, money or other prizes.
 
As an adult, you may be too old to participate in a traditional Easter egg hunt. However, there may be another egg hunt that could be far more lucrative. It’s a hunt for hidden retirement assets. Many people fail to inventory their available retirement assets. In doing so, they fail to identify assets that could play an important role in their retirement strategy.
 
Below are four often-overlooked retirement assets. Some of these eggs may be hiding in plain sight. If you haven’t created an inventory of your retirement assets, now may be the time to do so. You could have some valuable eggs waiting to be found.

Old 401(k) Plans 

There was a time when workers stayed with one company for most of their career. Those days are long gone. According to data from the Bureau of Labor Statistics, wage and salaried workers have been with their current employer for a median of only 4.6 years. In fact, the average worker changes jobs 11 times from age 18 to 48.1
 
When you leave a job, you also may leave behind a 401(k) balance. It’s possible that you still have balances held in former employers’ plans. Make a list of old employers and identify the ones where you may have participated in a 401(k) plan, profit-sharing plan or other qualified retirement plan. If you have an old balance, you could roll it over into an IRA and invest it according to your strategy.

Life Insurance Cash Value 

Do you own permanent life insurance policies? If so, those policies may have a cash value that you can use in retirement. Permanent life insurance policies have a death benefit, but they also have what’s called a cash value account. When you make a premium payment, a portion of that payment is allocated toward the cash value.
 
Your cash value account grows on a tax-deferred basis. The method of potential growth depends on the type of policy. Whole life insurance pays dividends, while universal life policies pay interest. Variable universal life policies allow you to invest in the financial markets. Depending on your type of policy and how long you’ve owned the insurance, you could have a significant amount of cash value.
 
You can use that cash value to provide supplemental income in retirement. For instance, you can withdraw your premiums tax-free. You can also take tax-free loans from the policy, though the loans do have to be repaid. Review your life insurance policies and see whether you’ve accumulated cash value that you can use in retirement.

Home Equity 

Thinking of downsizing in retirement? That could be a smart move. When you downsize to a smaller home, you may be able to reduce your costs for housing, taxes, maintenance, insurance and more.
 
If you have substantial equity in your home, you could also give your retirement savings a nice boost. For example, you could pocket the equity from the sale of your home and add it to your retirement assets.

Delaying Social Security 

Technically, this strategy doesn’t represent an asset, but it is a simple way to increase your retirement income. You can file for full Social Security benefits once you reach full retirement age (FRA). Most people’s FRA lands between their 66th and 67th birthdays.2
 
However, you don’t have to file at your FRA. If you choose to delay your filing, Social Security will increase your benefit by 8 percent for each year that you wait up to age 70. That 8 percent increase is a permanent credit, so it could represent a significant pay raise, especially if you delay your benefit filing for several years.3
 
Ready to find the hidden eggs in your retirement strategy? Let’s talk about it. Contact us today at Binversie and Associates. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
1https://www.nerdwallet.com/blog/investing/leaving-401k-behind-job-change-costly/
2https://www.ssa.gov/planners/retire/retirechart.html
3https://www.ssa.gov/planners/retire/delayret.html
 
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.
 
18692 - 2019/3/2

​Everyone is familiar with the popular saying “April showers bring May flowers.” The arrival of spring also means the arrival of rainy weather. While rainy days are never fun, they signal the end of winter and the coming arrival of blossoming flowers and warmer weather. In retirement you might be able to avoid rainy weather by moving to a tropical climate.
 
Of course, you may not be able to avoid rainy days with regard to your financial strategy. Emergencies happen at all stages of life, including after you retire. Taxes could be a challenge and may stretch your budget. Medical expenses and long-term care costs could pose a financial threat. Market risk is always a concern.
 
One way to protect yourself from emergencies and unexpected costs is to boost your guaranteed* income in retirement. The more predictable, guaranteed* income you have, the less vulnerable you’ll be to unplanned costs.
 
Not sure whether you have enough guaranteed* income in retirement? Below is a three-step process you can use to evaluate your income and take action. If you haven’t projected your retirement income, now may be the time to do so.

Step 1: Establish your income floor. 

Your income floor is the minimum amount of income you need to cover your most important expenses. The best way to determine your income floor is to develop a retirement budget. Granted, you can’t predict every cost you’ll face in retirement. However, you can probably make a reasonable projection based on your current expenses and your desired standard of living.
 
Highlight the expenses that are most important. These will include all your fixed expenses, which are the bills that have to be paid every month no matter what. You also may include a few discretionary costs, which are expenses that could fluctuate from month to month. For example, your most important expenses may include:

• Housing
• Utilities
• Insurance premiums
• Debt and credit card payments
• Car payments
• Medical costs
• Food
• Clothing
• Cellphone bill
• And more

 
Total up your most important expenses and see how much they will cost on a monthly basis. Also, don’t forget inflation. It’s likely that prices will rise slightly between now and your retirement date. The sum of your most important expenses is your income floor. That’s the minimum amount of income you need each month to live in retirement.

Step 2: Project your guaranteed* income. 

The next step is to project your guaranteed* income in retirement. Guaranteed* income is cash flow that will last no matter how long you live and that isn’t affected by market performance or other economic factors.
 
Social Security and pension benefits are good examples of guaranteed* lifetime income. The amounts don’t fluctuate from month to month, and the income lasts for life. Distributions from 401(k) plans, IRAs or other investment vehicles may not be guaranteed*, so you don’t want to include them in this calculation.
 
Add up your projected guaranteed* income. Does it exceed your income floor? If so, you have enough to meet your bare minimum expenses. If it doesn’t, you may want to increase your guaranteed* retirement income.

Steps 3: Fill in the gaps. 

Ideally, you don’t just want your guaranteed* income to match your income floor. You want it to exceed your income floor by a substantial amount. That way you can build a rainy day fund to cover life’s unexpected costs. Extra guaranteed* income could help you pay for medical bills, home repairs or other emergency costs.
 
One of the most effective ways to boost your guaranteed* income is to include an annuity in your retirement strategy. Many annuities offer optional riders known as guaranteed* minimum withdrawal benefits. These benefits allow you to withdraw up to a certain amount each year. As long as your withdrawal stays within the limits, the distribution is guaranteed* for life. It doesn’t matter how long you live or how the market performs. Your income remains consistent and predictable.
 
Talk to a financial professional about how to use an annuity to boost your guaranteed* retirement income. They can help you determine your income floor, project your retirement income and take action to protect yourself from financial rainy days.
 
Ready to boost your retirement strategy? Let’s talk about it. Contact us today at Binversie and Associates. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation.
 
*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.
 
18686 - 2019/3/25