New Year’s resolutions don’t have to focus solely on physical health and wellness. Gaining a better handle on your current financial situation and charting a path to a sustainable retirement lifestyle can be an equally meaningful resolution for the new year. 

Impactful Resolutions Should Start With an Honest Assessment

Resolutions should be built on an honest assessment of one’s current situation. This applies to all types of resolutions, whether related to health, lifestyle, or finances. 

There are a few key questions you can answer to ascertain where you currently stand on your finances and savings:

Potential Ideas for Financial Resolutions for Phoenix Savers

Create a Budget if You Don’t Have One or Revise Your Existing Budget

Many households don’t have a formalized budget, and they may not require one for the sake of day-to-day, short-term financial stability. However, even households that live comfortably today could benefit from a budget designed to achieve long-term retirement savings goals.

If you’re maximizing your current contributions to your employer-sponsored retirement savings, you may want to look into separate accounts to accelerate progress toward early retirement. Alternatively, if you already have a budget that you sometimes neglect, you may want to set new guidelines for yourself or fine-tune it for a more sustainable 2025.

Not all debt is equal, especially in the context of long-term savings and financial health. High-interest debt, such as credit cards, can hinder a household’s progress toward retirement savings goals. If you currently carry high-interest debt, or your interest payments are interfering with your ability to reach your retirement contribution goals, you may want to adjust your repayment approach.

Maximizing your 401(k) or IRA contributions allows you to take advantage of employee matching and the benefits of compound growth, but savers are not restricted solely to these types of retirement savings vehicles.

For example, if you’re someone who doesn’t have an employee-sponsored plan and you only invest the maximum contribution into your self-directed Roth IRA each year, you may want to investigate alternative accounts to increase your annual retirement savings.

Make sure you understand the tax implications of retirement savings options before you begin investing. It may be beneficial to discuss both current and future tax implications with the 

One financial New Year’s resolution that might cost you very little is diversification. If you, like many Arizona retirement savers, don’t regularly rebalance your 401(k) or IRA, or investment growth has led to your portfolio being overweighted in some categories, now might be a great time to rebalance your investments.

Retirement savers typically become more risk-averse as they approach retirement. If you haven’t adjusted your investment mix to achieve the ideal balance of risk and growth for your time horizon, the new year may present an ideal opportunity to do so.

Learn How Fullerton Financial Planning Can Help

The financial advisors at Fullerton Financial Planning help Phoenix-area retirement savers identify current weaknesses in their long-term savings plans and develop solutions to achieve their financial goals. We tailor our advice to your current financial situation, risk tolerance, and time horizon.

You can learn more about our process by attending 

one of our webinars or in-person seminars

 in the Phoenix metro area. We encourage interested investors to call us at (623) 974-0300 to schedule a free consultation with one of our advisors.

Setting Meaningful Financial Resolutions for the New Year 

Owners of family-founded and family-run businesses in Arizona face a variety of challenges while building and growing their business. Remaining competitive, staying ahead of market trends, and constantly adapting to the changing demands of consumers can keep business owners busy. The day-to-day demands on an owner’s time may cause succession planning to take a back seat to more pressing priorities.

Although it may not seem like an urgent task to deal with right away, beginning to think about succession planning years in advance can contribute to a much smoother transition when it is time to pass the torch. Taking steps to avoid some of the common challenges can enhance your peace of mind today and make retiring a more enjoyable and far less contentious proposition.

Family businesses often lack a formalized and detailed succession plan. It’s simply not top of mind for many entrepreneurs in the initial years of operating their business. Most small businesses fail within five to 10 years, and transitioning operations to a successor isn’t typically a pressing concern for founders until the business is durable, sustainable and possesses growth potential.

However, it’s not uncommon for successful small business founders to get so caught up in growing their thriving business that they don’t think much about passing their business on.

Many small business owners who are nearing or past 65 years of age are reluctant to step down, especially if there’s no clear successor. Settling on successors and beginning to coach and prepare the future owners and managers early can lead to a more successful transition.

Familial relationships can complicate the transition process if the founder and current owner has not established a transparent succession plan. Differing opinions within the family, sibling rivalries, disagreements over roles, and conflicts regarding business direction can create tension that spills over into personal lives. These disputes can make the successful transition of a family business particularly difficult.

Many founders take pride in passing their business on to their children or grandchildren. Keeping the business in their family may even be 

. It can be difficult to pass a business on to other family members if they don’t possess the necessary skills or experience to take over and smoothly continue operations.

Gaps in leadership development, training or mentorship can hinder transitions. This can also create disunity within the business, especially if long-time and experienced employees are passed over for family members with little experience or proven ability to run the business.

Clearly differentiating between ownership and management roles can be particularly important, especially in situations where long-time employees are more suited to manage than family members. Some family members may benefit more from ownership without being involved in daily operations, while others may prefer (or feel entitled to) leadership roles within the business.

Deciding on roles in advance and holding to plans can be vital for owners during the transition. Transparency and clear expectations can potentially decrease animosity if some interested parties are disappointed with the outcome.

Balancing Family and Non-Family Employees

Many small businesses have key non-family employees who possess institutional knowledge, unique skills, and sometimes many years or even decades of experience in management. The business’s increased valuation and continued success may be due in large part to these non-family employees, and the continued success of the business may be dependent on them.

Family business owners need to carefully balance their succession plans to ensure key employees aren’t lost due to bitterness or disappointment with decisions. It’s also possible for family members who are given ownership or management roles to face resentment or have difficulty managing employees who feel passed over.

Assigning value to a business can be difficult and lead to disputes among family members who want to sell their share or exit the business. Accurate and clear accounting and forecasting can help ensure every interested party is on the same page regarding valuation.

Founders often have strong emotional ties to the business they founded and built. They may be hesitant to retire or pass the business they built onto their family members if they are concerned their legacy won’t be respected and preserved. Alternatively, they may be reticent about the new generation making significant changes or adopting a different approach to operations.

Addressing the Challenges of Succession Planning

There aren’t always easy or straightforward solutions for some of the common challenges facing business owners during succession planning. Owners who clearly communicate with stakeholders, listen to concerns, and clearly explain their preferences and reasoning may experience more dependable succession outcomes.

Consulting with external advisors, including 

 and attorneys, may increase the likelihood of a smooth and successful transition. Business owners in Phoenix who are seeking guidance on retirement and succession planning can schedule a free consultation with the team at Fullerton Financial Planning by calling 

Challenges Faced by Family Businesses and Closely Held Enterprises in Transitioning Ownership and Management to the Next Generation

Asset protection trusts, which are usually irrevocable trusts, can be used to protect assets from creditors and legal judgments. The irrevocability is often crucial in this regard, as the grantor is essentially giving up their legal ownership of the assets to put them out of reach of creditors.

Arizona does permit the creation of Domestic Asset Protection Trusts (DAPTs), which allow the trust creator to also be the beneficiary.

Strict DAPT limitations and reporting requirements are enforced to prevent abuse of these specialized trusts. For example, Arizona DAPTs have a period in which creditors may be able to challenge transfers of funds into the trust in order to reclaim debts. If a creditor claim arises after the assets have been transferred into the trust and the waiting period has ended, they may not be able to reach those assets.

The structuring of these trusts can be complicated, and they aren’t available to everyone. In order to open an Arizona DAPT, at least one of the trustees is required to be an Arizona resident and maintain some assets in the state. Adherence to strict documentation and reporting requirements is vital to maintain the legality of the trust.

It is important to discuss your asset protection needs and trust formation plans with an estate planning attorney. They will be able to explain what a DAPT can and cannot do for you.

Timing Is Important for a DAPT to Be Effective

Domestic Asset Protection Trusts are not intended to be a reactive way to dodge legal judgments or creditors, which is why they have look-back periods in which transfers can be scrutinized and even reversed. Creditors can bring challenges, potentially even years after a DAPT’s creation, if they suspect a debtor or defendant in litigation sought to hinder, delay or defraud them through the creation of a trust.

DAPTs are designed to be established far in advance of any legal or creditor actions to offer proactive protection against future claims, lawsuits or bankruptcies. They’re a form of safeguarding assets from unforeseen future risks rather than immediate or short-term anticipated liabilities.

When Might Someone in Arizona Open a DAPT?

Any professional in an industry where malpractice insurance is required due to a high risk of litigation, like doctors and lawyers, might seek to pursue asset protection through a DAPT. These trusts can be an effective way to shield assets from unforeseen future malpractice claims or lawsuits.

People taking risks in a new business venture or those concerned with facing liabilities due to their business activities in the future may be able to shield their personal assets from claims arising from business bankruptcies, contractual disputes or other business dealings.

Individuals with a high net worth may want to protect their assets separately through a DAPT. The creation of a DAPT prior to marriage may also make the division of property in the event of a divorce more straightforward.

 DAPTs may be utilized as part of a broader estate planning strategy to ensure an individual’s wealth is preserved for future beneficiaries. A DAPT can also be used to protect assets from creditors in the future as well as regulate the disposition of assets to heirs to prevent irresponsible spending.

Financial privacy in wealth preservation: 

The structure of DAPTs can help shield some details of asset ownership and keep information out of the public record while also safeguarding future inheritance or earnings from unforeseen future threats.

Are Your Assets or Retirement Savings Being Properly Managed and Protected?

Safeguarding and growing retirement savings and assets can be extraordinarily complicated. There are many potential estate planning and asset management tools that can potentially be leveraged to meet your goals. The team at 

 can advise you on your options and help you understand which combination of 

 might help you reach your desired retirement and asset preservation destination.

What Is an Asset Protection Trust?

Potentially yes – in two important ways. First, the extra income you earn during those final working years can go toward savings and help sustain you in retirement. Properly invested, those dollars can continue growing long into the future. Second, you can put off drawing on benefits and retirement savings, allowing them to last longer.

Some retirement savings accounts, like 401(k)s, do have required minimum disbursements (RMDs) starting at age 72. Even if you continue working past 72, you will still be required to take the RMD. However, there is no age restriction for 401(k) contributions, so you can continue adding to your 401(k) even after you start taking RMDs.

Whether it’s in an older worker’s best interest to continue working and contributing to their retirement savings plan depends on their current savings and tax planning strategy. There is a truly diverse array of potential retirement savings and tax strategies that savers with unique situations may leverage, so there’s no one right answer to the question.

As a basic truth of savings, especially for people who are worried they haven’t saved enough during their working years to maintain their quality of life for potentially decades of retirement, saving more and waiting to draw down on those savings is generally a good thing.

If you and/or your spouse aren’t sure when to start claiming your Social Security benefit, you may want to read our 

. This is an incredibly complicated subject, and regardless of what you decide, you shouldn’t make the choice on a whim without considering the advantages and disadvantages of your choice.

There is a significant percentage of older workers who benefit greatly from working a few extra years to permanently bolster their Social Security payments via Delayed Retirement Credits. This is an especially powerful tool if your work history over the past several decades has gaps, or you have concerns about being able to maintain your quality of life based on your current estimation of your SS benefit.

These Delayed Retirement Credits accrue for every month you delay collecting your Social Security retirement benefit up to the age of 70. If you were born in 1943 or later, you can get an eight percent per year rate of increase (.66 percent increase per month) for four years if you forego collecting your full benefit at age 66 or the reduced benefit earlier.

 of birth years to rate of increase on the Social Security Administration’s website.

Whether work is actually good for you depends largely on how much you enjoy your job, your outlook on the value of staying busy and your physical activity level. If your job is sedentary, stressful and it makes you unhappy, this “benefit” might not apply to you at all.

However, some potential risks of retirement are isolation and a steep drop in regular physical activity, both of which can have negative effects on retirees mentally and physically. If work is keeping you active, engaged and stimulated, it may have a net positive impact on your overall health and wellness.

Can the Mental Stimulation of Work Slow Cognitive Decline?

 “cognitively stimulating work and activities” can 

 cognitive decline and some types of dementia. People are unique in all respects, including brain health, hereditary risks, mental acuity and cognitive function, but the common consensus among medical professionals seems to be that mental stimulation and physical activity is a net benefit for cognitive function.

Work is far from the only activity that can help in this regard, and mental stimulation alone is not a miracle cure for cognitive decline. Seniors who have fully retired can engage in many non-employment-related mentally stimulating activities, such as reading, playing games or learning a new skill to lower their risk of developing cognitive impairment or dementia. Still, if you are worried about cognitive function, delaying your retirement may be one way to combat it.

Staying healthy both mentally and physically may also reduce your need to spend your retirement savings on health care. The longer you can put off things like assisted living, memory care and expensive medical interventions, the better off you will be financially. 

Older workers in Phoenix who are looking at their retirement savings options may benefit from the assistance of 

 would be happy to discuss the potential advantages and disadvantages of delaying retirement based on your unique financial circumstances and goals. Call us at 

 Can Delaying Your Retirement Actually Benefit You? 

Are you an adult with a checking account? Congratulations, you have an “estate.” One of the most common misconceptions about estate planning pertains to who needs one. 

There’s no monetary threshold in the definition of an estate. If you have assets and you’re an adult, you have an estate that will need to be handled at the time of your passing. If you have no estate plan in place, your assets will be distributed via probate to the appropriate government entities and family members. 

Most people, especially those actively thinking about retirement or end-of-life decisions, aren’t satisfied with the idea of a judge or rigid legal process making all the decisions pertaining to disbursement of assets. You’ve spent your entire life building your estate – shouldn’t you get to decide where it goes when you pass?

We’ve recently compiled a detailed report   on the estate planning tools you can use to secure and strengthen your family when you’re gone. We’ve strived to explain the ways in which a comprehensive estate plan makes an extremely difficult time far easier for the people you love. 

The Gift of an Uncontentious Grieving Period

If you’re a parent or a grandparent, it’s likely safe to assume that your passing is going to be hard on your immediate and extended family. Two specific end-of-life responsibilities makes the loss of a loved one far more difficult for some families: funeral planning and probate. 

Unfortunately, the probate process and disputes regarding the dissolution of estates can become extremely contentious. This is especially true when there are heated disputes between children, ex-spouses or grandchildren regarding who is entitled to specific assets or properties. Those types of disputes can potentially tear a family apart. 

Most people don’t want their familial legacy to be acrimonious, which is why it’s generally best to prevent that process from ever occurring via an air-tight estate plan. 

What Do Community Property Laws in Arizona Have to Do with Death? 

Community property laws are usually discussed in the context of divorce. Any assets acquired via work or purchased during a marriage are considered community property. Those assets must be split evenly during divorce proceedings. 

The other event that triggers community property laws is death. In Arizona, your surviving spouse usually inherits your half of the community property as well as any separate property that wasn’t covered by community property laws (such as gifts, inheritance or assets and property acquired prior to the marriage). 

Things get more complicated if the person who died has children from a previous marriage or relationship. In that scenario, it may be the children, not the surviving spouse, who inherits your one-half of the estate if you don’t have a will or estate plan in place. 

You Can Help Your Family Grieve in Peace with an Estate Plan

Any person who has dealt with the death of a spouse or close loved one is likely familiar with the exceedingly long list of responsibilities that accompany this personal tragedy. Some of those tasks include: 

The process is arduous, complex and expensive. All these responsibilities can arrive entirely unexpectedly in some circumstances. 

You can give your loved ones the gift of handling these tasks yourself via a thorough estate plan that clearly dictates your wishes and the vendors to use. Bills can also be dealt with in advance, such as pre purchase funeral services, burial plots, urns or caskets and other necessary services. You can even assign part of a life insurance policy to a funeral home to pay for expenses. 

Doing so allows your family to grieve in peace instead of forcing them to stress about logistics and payment during a difficult time. 

Our Retirement Planning Team Is Here to Help 

At Fullerton Financial Planning, most of our efforts are dedicated to a happier topic – ensuring that you have the assets to maintain your desired quality of life during a long, relaxing and productive retirement. 

Although it’s not a fun topic to discuss, end-of-life planning is an unavoidable aspect of aging. We’re happy to provide additional tax planning and estate planning services to ensure we can provide a one-stop solution for our clients in Phoenix.

Speak with one of our planners today by calling (623) 974-0300.

 Give the Greatest Gift to Your Family by Establishing an Estate Plan 

When investors or advisors refer to dividend stocks, they’re usually referring to specific companies and shares that regularly pass a significant percentage of their profits on to stockholders. 

This profit sharing can be used by some retirees as income to fund their lifestyle. In order to reach the necessary threshold of passive income generation through dividends, you may have to invest a large portion of your nest egg into companies or funds that specifically hold high-dividend shares.

Although there are certain industries or types of funds known for profit sharing (like Real Estate Investment Trusts, or REITs), dividend investors can find reliable dividend stocks in a diverse variety of sectors. 

Some popular examples of high-yield dividend companies include: 

Are Dividend Stocks Good Bear Market Protection? 

Every company and investor is different, which is why you should strongly consider discussing your income preferences with a retirement planner or investment manager. 

Dividend yields are calculated by dividing the annual dividends per share by the current share price and multiplying the result by 100. However, the dividend yield doesn’t impact the actual dividend, it’s simply a metric used by investors to guide their decision making. There’s no direct correlation between a stock’s price and its dividend. 

Dividends can get cut, but those cuts are often due to a drop in earnings rather than a drop in stock price. 

In fact, there’s an incentive for companies to keep dividends stable when their stock price falls. Publicly traded companies want to incentivize their current investors to hold on to the stock instead of selling it. Paying a good dividend is a reliable way to entice investors to hold on to their shares.  

While these companies have an incentive to continue paying dividends during a bear market, stock prices still matter. Dividend payments may not make up for a drop in your holding’s valuation. 

Every investor needs to carefully consider their strategies based on their goals, which is why an investor who holds dividend stocks purely for passive income generation may hold while another investor may choose to sell. 

What’s the Difference Between a Dividend Stock and a Dividend Fund? 

A dividend stock is a single publicly traded company that offers a high dividend. A dividend fund is either an ETF or mutual fund that holds a diverse array of individual dividend stocks. A dividend fund can mitigate the risks previously discussed. A single stock may drop in valuation, even if it continues paying out a stable dividend. Dividend funds can drop in valuation as well, especially during market downturns, but the risk is greatly diluted across all the companies held by the fund. Dividend mutual funds and ETFS are also professionally managed, which means experts will make informed decisions based on the interests of fund holders. 

Whether you’re better off investing in individual dividend stocks or dividend funds depends on your personal preferences and knowledge. Avid investors may believe they can make better choices for their own savings than a fund manager can, and therefore choose to invest in individual stocks. Many retirees may prefer to follow the guidance of fund managers rather than try to manage a diverse dividend stock portfolio on their own. 

Stock price is not always a perfect indicator of a business’s health. Investors who want to micromanage their own portfolio should be cognizant of business risks that may affect future dividend payments.

Dividend rates are usually displayed in an annual format but are paid yearly, semi-annually or quarterly. A company that pays $3.00 per share will likely pay $0.75 every quarter, $1.50 twice per year or one yearly payment of $3.00. 

A stock’s ex-dividend date (or simply ex-date) is the day before the company records all shareholders eligible to receive a dividend. That means you will only be paid the dividend for the period if you own the share by the ex-dividend date. 

If you’re looking for passive income investment options for your retirement savings, you may be considering investing heavily in dividend stocks or funds. The team at Fullerton Financial Planning is here to answer your questions and provide guidance for your retirement investments. 

Speak to a financial advisor today by calling us at (623) 974-0300.

 What Kinds of Stocks Are Known for Paying Dividends 

A 401(k) is a retirement savings plan facilitated by an employer and managed by a third-party financial institution. Employees choose what percentage of their income they want their employer to contribute on their behalf. The money is deducted from the employee’s paycheck just like tax withholding. 

This method of retirement savings has helped millions of American workers prepare for retirement. It is far easier to save when you don’t have to make a conscious effort to do it on a regular basis. This set-it-and-forget-it approach to retirement savings (and investing) frequently leads to better outcomes in the long run. 

What Is a Tax-Advantaged Retirement Plan? 

Many retirement accounts offer some kind of tax advantage, including 401(k)s. Workers who use traditional 401(k) plans are making pre-tax contributions. That means the percentage of your income that’s being deposited into your 401(k) doesn’t have any taxes removed from it. At the end of the year, you don’t have to pay taxes on your 401(k) contributions, even though technically all those contributions come from your income. 

Everyone eventually does have to pay tax on their 401(k) disbursements (distributions) and withdrawals, but those aren’t intended to start until you’re 59 ½ at the earliest. Technically, you can withdraw money from your 401(k) whenever you like, but there is a steep IRS penalty on top of normal income taxes.

Although there are exceptions that will exempt you from early withdrawal penalties, they won’t exempt early withdrawals from income taxes. 

Although there are self-directed 401(k)s that can be used like any other brokerage account or IRA, most retirement savers who use 401(k)s are most likely to be given a handful of potential investment choices. 

Before making decisions regarding 401(k) investment picks, it’s important to understand one’s own risk tolerance. Some investment options carry significantly higher risk but also more growth potential. Others are quite low risk but will also grow at a slower pace than the riskier investment options. 

As a rule of thumb, most young retirement investors start out with high-risk investment strategies and gravitate to lower-risk options the closer they get to retirement. Protecting the value of your 401(k) is often more important than growth by the time you reach retirement. 

Most 401(k)s allow you to invest in specific mutual funds. These funds often include an S&P 500 fund, a large-cap fund, a mid-cap fund, a small-cap fund, international investment funds and funds specifically intended to be large-growth and high-risk as well as low-growth and low-risk, among others. 

Many 401(k) providers also offer more hands-off investment options where you simply choose a preferred 

, and the company manages the rest. For example, you may be able to set your retirement age and adjustments will be made to your 401(k) portfolio without the need for you to ever intervene. These options automatically alter your risk exposure and grow your money without you ever needing to rebalance your fund allocations. 

How you manage your 401(k) is a personal choice. Some people who don’t pay much attention to the market or investments may prefer a more turnkey approach. Others may want to micromanage their options and adjust their funds frequently. 

Many companies offer 401(k) matching as a hiring incentive and employee benefit. These matching funds are frequently in the three to six percent range. What that essentially means is an employer will match an employee’s contributions up to that percentage of their salary. 

If you made $60,000 and set your contribution to six percent to maximize your employer match, you’d be putting in $3,600 a year and your employer would be putting in $3,600 a year for a total contribution of $7,200 a year. 

Many employers match in the form of company stock, so they would technically be putting $3,600 of company stock into your 401(k) each year. In most cases, you are free to sell the company stock and move the proceeds into the other funds. 

Should You Maximize Your Employer Match? 

Some people believe that failing to maximize your employer matching funds is no different than leaving money on the table. However, every person is different. Some retirement investors believe they can beat their 401(k) investment options on their own through a self-directed brokerage account or some other investment strategy (like real estate). Others may simply not have the room in their budget to sacrifice that much of their check every pay period. 

Do You Want to Maximize Your Retirement Savings? 

Are you worried you haven’t saved enough for retirement? Are you wondering if there are better ways to grow your nest egg? Have you been saving in your 401(k), but aren’t sure it’s enough to maintain your quality of life during retirement? 

You don’t have to be in your 50s or 60s to have those questions, and it’s never too early to start planning for your future. 

 today at (623) 974-0300 to learn more about possible retirement investment strategies.

 Understanding 401k and the Affects It Has on Your Financial Future 

Life insurance can be leveraged to mitigate investment risk and can provide multiple tax-efficient strategies for your retirement plan.

 After all, insurance coverage-- such as home, auto, and health-- takes money out of our pocket, right? When focusing on building assets for retirement, life insurance is oftentimes viewed as just a 

 You may be wondering how you can protect your current 

 investments (like your IRAs and 401Ks) against the potential impact of 

 With its attractive tax advantages, life insurance can be a supplemental solution to help address those potential financial concerns.

Most of us do not think about the risk and return characteristics that make life insurance such a unique asset class. The reality is-- life insurance 

 in your overall financial strategy, offering more than just a death benefit. Life insurance can be leveraged to mitigate investment risk and can provide multiple 

Before we breakdown life insurance as an asset class, let's review some key terms you should know:

What are the different types of life insurance?

 (also known as pure life insurance), is a type of insurance that lasts a certain number of years, then ends. The term 

depends on what you choose when you take out your policy

, but common terms are 10, 20, or 30 years.

If you die during the term of the policy, the insurer will pay the face value of the policy to your beneficiaries. The cash benefit, which in most cases is 

, can be used for after death expenses such as funeral costs, mortgage debt, car debt, and so on.

, then there will be no payout. At your policy's expiration date, you may be able to renew your term policy, but keep in mind your premium could be higher, since it's typically recalculated based on your age and the time of renewal.

. This means that if you decide to give up your coverage to the insurer, you won't receive anything in return.

 provides death benefit coverage for the duration of the insured's lifetime. In addition to a death benefit, whole life insurance can also contain a 

cash value, which accumulates on a tax-advantaged basis

 than term, it covers you for your entire life. The savings component (cash value) of your policy can be invested, meaning that the policyholder has the access to the cash while alive. Most whole life insurance policies have a 

. If you have had your whole life insurance coverage for long enough, you may be able to receive some of the cash value of the policy upon 

 of when you pay premiums and may also permit you to change the amount of the subsequent death benefit. 

 offers many of the same benefits as traditional universal life insurance, with 

: the way interest is credited to the cash value of the policy. IUL interest is credited to the cash value based on the movement of a specific 

 or indexes over a specific period of time, within the parameters of a 

 policy includes an investment feature, which means the cash value of the policy will fluctuate based on the investment performance of a separate account that offers a 

. Life insurance policies may be subject to restrictions, limitations and early withdrawal fees or surrender charges. VUL insurance policies typically have both a maximum and minimum floor on the investment, as well as a 

. Exposure to the market and its volatility can offer significant returns, but also increase the exposure to risk. Policyholders should carefully assess their 

 before purchasing a VUL Insurance policy.

What are the Tax Advantages of Life Insurance?

Depending on your retirement goals, there can be a variety of ways to hedge your tax impact. What makes life insurance such a unique asset class, is that not only can it be a supplemental solution to address your financial concerns, but it also offers a variety of tax advantages, as well as distribution and transfer capabilities.

, beneficiaries of an individually owned life insurance policy generally do not have to pay income taxes on the death benefit. That said, there are instances in which your policy could be taxable. If you plan to earn interest on the policy, or if your life insurance is part of a 

Tax Advantage #2 - Tax-Deferred Accumulation Potential:

Any cash value growth in a life insurance policy is 

. While inside the policy, the owner is not subject to income taxes on the cash accumulation.

Tax Advantage #3 - Tax-Free Distributions:

Money borrowed or taken from the cash value of the policy are not subject to income taxes up to the "

"-- the amount you put into the policy through paid premiums.

Tax Advantage #4 -Tax-Free Accelerated Death Benefits: 

If the insured becomes terminally or chronically ill, a portion of the death benefit, "

," may be paid out while the insured is still alive. These tax-free benefits are paid on a per diem (or other period basis), and are excluded from income tax up to a certain limit determined by the IRS, per 

When it comes to the economy, it's safe to say our past informs our present. Throughout history, U.S. 

 in response to events both here in the United States and around the world. 

﻿Where are we today? Well, our government has a large amount of debt on their hands… in fact, it’s 

https://www.taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates

 (averaging over 60% and topping at 90%), we are at a major discount right now.

If you're looking to limit your chances of getting hit with higher taxes in the future, life insurance could be a potential way to 

In general, the more taxes you pay in retirement, the more income you'll need to generate in order to not only pay those taxes, but to also still live comfortably.

, our goal is to help you enjoy your retirement with confidence, not worrying about whether or not you have enough money to enjoy it. The last thing anyone wants is unexpected taxes when they begin to withdraw from their retirement accounts.﻿

There’s never a bad time to start planning for retirement. If you’re starting early or if you feel you’re way behind, or if you don’t know where to start, we’re here to help wherever you’re at in the process.

Sit down with a Fullerton Financial Advisor today

 and find out how you can get on track with your retirement goals.

 Using Life Insurance to Fund your Retirement 

our primary goal throughout your working years is to support yourself, your family, and to create a lifestyle that also leaves a legacy. So, how is it that almost 

70% of people don’t have even so much as a will?

 Many of us haven’t planned for transitioning our hard-earned wealth to others after we pass. While a financial plan sets a path for our retirement years, not having an estate plan is like letting all that work flounder.

sets a guide for how the wealth you built can continue to grow

Welcome to Our Financial Tips Blog

Setting Meaningful Financial Resolutions for the New Year

Challenges Faced by Family Businesses and Closely Held Enterprises in Transitioning Ownership and Management to the Next Generation

What Is an Asset Protection Trust?

Can Delaying Your Retirement Actually Benefit You?

Give the Greatest Gift to Your Family by Establishing an Estate Plan

What Kinds of Stocks Are Known for Paying Dividends

Understanding 401k and the Affects It Has on Your Financial Future

Using Life Insurance to Fund your Retirement

Estate Planning 101: Why Estate Plans Matter

Estate Planning 101: The Basics

8 Ways Couples Can Plan for Retirement Together