But a life insurance review, as unexciting as it sounds, may be necessary and beneficial. Like changing the oil in your car, if you put it off for too long it could lead to bigger problems. Here are a few of the reasons you might want to pursue a life insurance review:

1. You Could Outlive Your Policy

What would happen if you lived longer than your life insurance policy? Poor performance, loans, incorrect ownership, or beneficiary choices could lead to a mess for your loved ones when your policy is needed most. There’s a chance your current policy may have an expiration date that you aren’t aware of. Many policies are set to endow at age 95 or 100, and while that may seem like a long time to live, in the past 30 years alone, the U.S. centenarian population has grown 65.8%. [1]

If you outlive your policy, the repercussions could be disastrous. Make sure you understand and plan for this situation, especially if you purchased your life insurance policy at a young age.

2. You Could Run Into Tax Problems

Life insurance is often thought of as being income tax-free at your death, but some policies are inadvertently set up to be taxable at death. If your policy was created this way, would that cause issues for your family? If it would, or if you aren’t sure if it would, an advisor may be able to help you rectify this problem and create a strategy to ensure your family isn’t caught off guard.

3. Your Policy Could Be Performing Better

How do you know if your life insurance policy is performing as expected? When you purchased the policy you were most likely provided a projection of values, but have you seen an updated estimate since then? How would it compare to what you were originally shown?

It’s possible that your policy is outperforming its original projection, but considering the direction of the economy over the past few years, it’s more likely that the policy has underperformed. If so, what might that mean for you and your plans for your loved ones?

Now may be a good time to update your projections and ensure they are on track. Most often, it’s easier to adjust a policy before it goes too far off course. Your advisor can help you evaluate how the policy has performed since you purchased it and how it is projected to perform in the future.

4. Your Policy May Be Outdated

Throughout the last few decades, life insurance has evolved into a more valuable and robust risk management tool. Today’s policies can cover more than just premature death. There are options to cover chronic illness and long-term care and they have the ability to direct policy cash values among multiple options — not just the insurer’s general account.

If it’s been a few years or decades since you first purchased your policy, you may need to add additional coverage, such as long-term care, with a rider, which can be more cost-effective than buying a separate policy.

Even if you don’t need to add features, you may still need to verify that your beneficiaries are up-to-date and check if you have the correct amount and type of coverage.

Reviewing Your Policy

Life insurance can be confusing, and it is often difficult to know if your policy is doing what it’s supposed to do. Through an insurance update, we can help you examine your policies in-depth so that you can have increased confidence that your plans are on track. If you are concerned about your life insurance policy or would like to schedule a review, contact one of our offices today.

About Capital CS Group

Capital CS Group, an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. CWS is comprised of professionals with diverse backgrounds and extensive experience and qualifications. CWS is uniquely qualified to serve a broad range of client needs. Their experience and expertise act as a foundation for their client service process, The Second Growth, which focuses on efficiently protecting, growing, and transferring to their loved ones the wealth and legacy a person has already built. With offices in Palm Desert and Anchorage, the firm serves clients across the country. Learn more by visiting www.CapitalCSGroup.com.

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1. Not Saving Early

Currently, only 52% of families in the U.S. have retirement accounts.^[1] While it may be tempting to hold off on retirement until the kids are out of the house or until you’re more established in your career, don’t. The longer you hold off saving for retirement, the harder it will be later on.

On the other hand, the earlier you save for retirement, the easier it will be for a bigger payout. There are more opportunities to contribute more money and more compound interest to accumulate over time. If you have an employer-sponsored plan with matching, that is more free money from which to benefit. For instance, if your employer matches 100% of 3% of your 401(k) and you have $100,000 by the time you retire, then your employer will give you an additional $3,000. For the same benefit, if you have $200,000 saved up, then your employer will give you an additional $6,000.

2. Choosing To Be Too Safe Too Early

While it’s always a good idea to be careful with your money, it does not mean “playing safe” is always the answer, especially when you are starting early. Investing in low-interest safe investments, such as CDs, would minimize the growth of your money over time and would result in a lower nest egg. According to Bankrate, the current rate of a 1-year CD is only 1.09% and a 5-year CD is only 1.85% in California.^[2]

Saving earlier in life affords you the opportunity to invest in moderate to aggressive stocks, allowing for more compound interest growth and affording enough time to recover should the market take a temporary downturn.

3. Getting Too Risky Toward The Finish Line

Just how being “too safe too early” is not recommended, being too risky too close to retirement age is not a sound strategy either. While investing in aggressive stocks can have the potential for a greater influx of money with bigger opportunity to “catch up” on growth, there is also great risk of losing money without recovery. Moving money to lower risk and moderate investments (such as bonds) is recommended to safeguard your money as retirement day approaches.

4. Not Finishing Off Mortgage Payments

With Americans moving from their households an average of 11.7 times in their lifetime,^[3] it’s no wonder that 44 percent of Americans between the ages of 60 and 70 have a mortgage when they retire, and as many as 17% of those surveyed say they may never pay it off.^[4] Getting rid of your mortgage payments will be one less bill to worry about and pay for in your retirement. Try to pay it off as soon as you can and keep refinancing to a minimum.

Your First Step To No Regrets

As outlined above, planning for retirement involves a lot of care, strategy, and timing. No one can predict the future of the economy or the market, but we at Capital CS Group can help you put a plan in place to ensure the best use of your money while providing the best safeguards available. To seek expert advice from one of our financial planners, call our office today.

About Capital CS Group

Capital CS Group (CWS) is an independent Registered Investment Advisory (RIA) firm that provides proactive financial advice and investment management for high net worth families, business owners, and institutions. Capital CS Group comprises professionals with diverse backgrounds and extensive experience, qualifications and is uniquely qualified to serve a broad range of client needs. CWS’s experience and expertise have been the foundation for their proactive client service process and client Standard of Care. CWS’s multi-generational approach focuses on efficiently protecting and growing wealth while providing proactive financial advice as a client moves through each new stage of life. With offices in Palm Desert, CA, and Anchorage, AK, the firm serves clients across the country. For more information: visit www.CapitalCSGroup.com or call us

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The good news is that there are things you can do to protect yourself from the worst-case scenarios should the need arise. It all comes down to making preparations and taking action by keeping these three things in mind.

Spread Out Your Investments

In the 1990s, investors placed their money heavily into the early e-commerce sites, and when that bubble burst, it birthed what is now famously known as “The Dotcom Crash.” When people were losing faith in the stock market, they looked at real estate as well as their own homes as the place to focus their sights (and money) on. However, the constant speculation and unsustainable rise in home values eventually led to the Housing Market Crash of 2008, and eventually bled into the Great Recession. If history teaches us anything, you never want to put all of your eggs in one basket as it’s never a guarantee that the basket will never fall.

Instead, diversify your portfolio with a combination of different investment sources. Modify your portfolio to include stocks of varying risk levels (safe, moderate, and high risk). Use some (not all) of your capital to go into business ventures (e.g., buying a second home to use as a rental property), if that is what you desire. This method will not yield high short-term ROI, but it will prevent you from crashing and burning should the market go downhill.

Don’t Overleverage Yourself

While there is nothing wrong with taking a loan here and there, make sure you don’t go too deeply into debt to support your investments. Don’t buy more house than you can afford, and certainly don’t go too crazy with margin trading (e.g., borrowing money for stocks you normally would not be able to afford). You want to have a sustainable hold on your financial investments, even on temporarily borrowed capital, in order to keep your repayments lower and affordable. Should there be a market downturn, you can at least have some peace of mind that you will still be able to afford whatever money you need to pay back.

Stop Trying To Predict When The Next One Is Coming

As tempting as it is to hold onto an investment and sell it at the height of the market right before the market plummets, don’t. No one can predict when the next market downturn will be. Even the experts get it wrong. Playing this game is a pure gamble, a risk that can result in a huge loss of money and assets when the cards don’t fall your way. This is one game you want to bow out of.

When you think about it, protecting your investments and assets creates a buffer between your money and whatever is to come in the market. You may not be able to control the future of the market, but you can at least take charge of how you handle your money today.

Are you ready to see all your options for protecting your money? We at Capital CS Group would love to start that conversation and answer any questions you may have. Call our office or contact one of our offices today.

About Capital CS Group 

Capital CS Group is an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. Capital CS Group is comprised of professionals with diverse backgrounds and extensive experience and qualifications. Capital CS Group is uniquely qualified to serve a broad range of client needs. Their experience and expertise act as a foundation for their client service process, The firm focuses on efficiently protecting, growing, and transferring to their loved ones the wealth and legacy a person has already built. The firm serves clients across the country in Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning and more. For more information: visit www.CapitalCSGroup.com or call us.

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