|
E-News ~ 4th Qtr 2005 |
|
From the office of Tim Olson, CEBS, CMFC It was a busy 2005 for High Deductible Health Plans (HDHP’s), as we saw many employers add high deductible plans as an option along with their traditional PPO plan. While we won’t know the outcome of their success or failure for years to come, HDHP’s are gaining momentum. ADVANTAGES
Will HDHP’s force employees to change habits, and shop for the best deal on a heart transplant? Hardly, but we have evidence that impacting what we spend on claims under $500 has the potential to save huge overall claim dollars for health plans. Only time will tell, but in the meantime, if you have any questions, do not hesitate to call The Olson Group. We wish you success and all the best in 2006 and beyond! Are Your Beneficiaries Up To Date? It is important to review your beneficiaries periodically. This applies to any asset that requires some type of beneficiary designation such as insurance policies, annuities, retirement plans, IRAs, disability, and long-term care. Every insurance/asset should have a goal/purpose, and every goal/purpose should have an asset. It is important to plan for the obvious, i.e. death, but also to look at what is not so obvious, that an asset may be spent or saved for living. Make it an annual event to get out your policies and check to see what you have. Basic changes that affect beneficiary designation are births, adoptions, marriage, divorce, etc. Situations that may develop and be overlooked include gift tax liability to a beneficiary, death of a beneficiary (have you named a secondary), birth of another child never added as beneficiary, and not changing the beneficiary after a divorce. Make sure your beneficiary designations reflect your intentions and change as your life events occur. Are You On Track To Reach Your Retirement Goals? Having enough money for retirement is the number one financial concern for many people. An annual review allows you to make adjustments in the steps necessary to meet those goals. Your retirement checkup should be about more than the numbers. Evaluating your goal and your strategy Make sure your goal is realistic. A common financial planning mistake is underestimating retirement income needs. You will likely have new wants and needs, such as travel and increasing health care costs. Factor in changing circumstances. Changes in health, family, job benefits and personal tastes can affect how much income you will need to support your retirement lifestyle. Think about the changes that have occurred during the past year and adjust your retirement savings accordingly. Reassess your asset allocation. Your retirement savings plan should include an allocation strategy for how your money is distributed across different asset classes, such as stocks, bonds, real estate, and "cash" investments. Check your diversification. You need to evaluate whether your holdings are diversified within each asset class. Checking your progress Analyze your year-end results. See how much your retirement savings plan assets performed during the year and then run the numbers through a retirement planning tool to determine if you are still on track to meet your updated retirement goal. Rebalance your assets. Your investments’ performance will determine whether you need to rebalance your portfolio to reflect your target asset allocation. Setting your saving goal for the year Determine your monthly contribution. You may need to adjust your monthly retirement plan contribution. Consider the overall benefits of increased contributions. Even if your investments posted a good year and your retirement plan is on track, increasing your contributions has advantages. Boosting your savings rate can give you the potential to retire early, provide additional tax advantages, and allow you to build assets that can eventually be passed to your heirs. Take advantage of opportunities to save more. The Federal Government has been increasing the amount you can put into your tax-advantaged retirement plan. The contribution limit set by the government in 2006 is $15,000. Also, if you’re age 50 or older, you may be eligible for a "catch-up" contribution that the government has increased to $5,000 in 2006.
Securities offered through
Sunset Financial Services, Inc. 3520 Broadway Kansas City, MO 64111 (816) 753-7000 (OSJ) Member NASD/SIPC Sunset Financial is not affiliated with The Olson Group. |
Safeguarding Your Finances The purpose of insurance is to protect people against financial disaster when they are unable to earn a living because of sickness or injury, or to give their dependents some type of income after they die. Whether to purchase insurance is an important financial decision about protecting one’s earnings and lifestyle. Many companies pay the entire insurance premium, or pay up to a certain amount of coverage. Some employers require waiting periods and others set up programs where an employee may receive limited benefits for the first year of employment and additional benefits on each anniversary of the start date. Short Term Disability - When an employee needs to be away from work for an extended period for a non-work related disability like maternity, illness, or injury, that employee may want to look at a short term disability (STD) program, which helps provide at least partial income protection. Long Term Disability - Every year 12 percent of the adult U.S. population suffers a long-term disability, and one out of seven workers will suffer a five-year or longer disability before the age of 65. Long-term disability usually begins after the short-term disability coverage period ends. It covers a portion of salary in case an employee is out of work for an extended period because of illness. If you become unable to work, regardless of the reason, the combination of your living expenses and your lack of income could bring extreme financial hardship to your family. Disability insurance provides replacement income in the event that you can no longer work. Life Insurance - There are two basic types of life insurance policies: whole life and term insurance. Term insurance is most common; whole life typically is the choice of people with large estates. Some people purchase coverage to enable their beneficiaries to meet their full financial responsibilities in the event of the insured’s death. Those expenses can include providing income to dependents, paying off outstanding debts (including mortgage payments), and paying estate taxes. The amount of coverage people elect depends on their estimated expenses. Long Term Care Insurance - The cost of nursing homes and home healthcare is high and rising currently, about $50,000 per year, an amount not covered by Medicare or other private medical insurance. Many people do not anticipate these costs when saving for the future, despite the likelihood of requiring this type of care. Premiums for long-term care insurance depend on factors such as age, sex, geographic location, and policy type. The cost of such insurance is lower when the insured person is young. Planning early can help an individual prevent his or her savings from running dry after a few years in retirement. "Finish each day and be done with it. You have done what you could. Some blunders and absurdities no doubt crept in; forget them as soon as you can. Tomorrow is a new day; begin it well and serenely and with too high a spirit to be encumbered with your old nonsense." Ralph Waldo Emerson "The future belongs to those who believe in the beauty of their dreams." Eleanor Roosevelt "Setting an example is not the main means of influencing others; it is the only means." Albert Einstein "Clouds come floating into my life, no longer to carry rain or usher storm, but to add color to my sunset sky." Rabindranath Tagore
Customer Service Contacts
AFLAC 1-800-462-3522 www.aflac.com Allstate (AHL) 1-800-521-3535 www.ahlcorp.com American Funds 1-800-421-0180 www.americanfunds.com Ameritas 1-800-527-0043 www.ameritasgroup.com Blue Cross Blue Shield 1-888-232-0942 www.bcbsne.com Cigna 1-800-221-6036 www.cigna.com Jefferson Pilot 1-800-423-2765 www.jpfinancial.com Met Life 1-800-686-9311 www.metlife.com OneAmerica (AUL) 1-800-261-9618 www.eretirement.aul.com Enrollment Fax: 1-317-285-1728 Principal Financial 1-800-547-7754 www.principal.com Quads Trust 1-800-342-8118 www.quadsweb.com Regional Care, Inc. 1-800-795-7772 www.regionalcare.com UNUM Provident 1-800-255-6148 www.unumprovident.com |
Maximum Benefit and Contributions Limits For 2003-2006
(As published by the Internal Revenue Service)
| 2006 | 2005 | 2004 | 2003 | |
|---|---|---|---|---|
| Elective Deferrals (401K & 403b Plans) |
$15,000 | $14,000 | $13,000 | $12,000 |
| Annual Defined Benefit Plan Limit | $175,000 | $170,000 | $165,000 | $160,000 |
| Annual Defined Contribution Limit | $44,000 | $42,000 | $41,000 | $40,000 |
| Annual Compensation Limit | $220,000 | $210,000 | $205,000 | $200,000 |
| 457 Deferral Limit | $15,000 | $14,000 | $13,000 | $12,000 |
| Highly Compensated Employee | $100,000 | $95,000 | $90,000 | $90,000 |
| SIMPLE Contribution Limit | $10,000 | $10,000 | $9,000 | $8,000 |
| Roth Contribution Limit At Age 50 or Older |
$4,000 $5,000 |
$4,000 $4,500 |
$3,000 $3,500 |
$3,000 $3,500 |
| Traditional Contribution Limit At Age 50 or Older |
$4,000 $5,000 |
$4,000 $4,500 |
$3,000 $3,500 |
$3,000 $3,500 |
| SEP Coverage | $450 | $450 | $450 | $450 |
| SEP Compensation Limit | $220,000 | $210,000 | $205,000 | $200,000 |
| Income Subject to Social Security Tax | $94,200 | $90,000 | $87,900 | $87,000 |
| Top Heavy Plan Key Employee Compensation | $140,000 | $135,000 | $130,000 | $130,000 |
| Catch-Up Contributions | $5,000 | $4,000 | $3,000 | $2,000 |
| SIMPLE Catch-Up Contribution | $2,500 | $2,000 | $1,500 | $1,000 |
|
The Olson Group 20214 Veterans Drive Suite 200 P.O. Box 543 Elkhorn, NE 68022 PHONE: (402) 289-1046 TOLL FREE: 1-866-289-1046 FAX: (402) 289-1012 EMAIL: tolson@theolsongroup.net |
Watko Benefit Group 7201 West 129th Street Suite 120 Overland Park, KS 66213 PHONE: (877) 685-0006 FAX: (913) 685-0068 EMAIL: gwatkins@watkobenefit.com |
Services | About Us | Directory | Newsletters | Region | HSA's | Voluntary Benefits
Contact Us | Home