sound retirement solutions to help you retire confidently · (gmwb) • a “living benefit”...

Sound retirement solutions to help you retire confidently

A sound retirement income strategy addresses three fundamental components:

• Growth potential• Access to liquid assets• Predictable income

Actively managing the allocation of your retirement savings to these three components is a key to retiring confidently.

Organizing your assets this way can help you diversify risk and accomplish multiple goals with different assets. It can also help you protect your predictable income sources, while allowing other assets in your portfolio to grow more efficiently by reducing the need for withdrawals.

Let’s look at these components and the types of assets they may include.

1 | Growth Potential. This component of your retirement portfolio is dedicated to growth opportunities and offers the best possibility of keeping pace with inflation. Examples include stocks, bonds, variable annuities, and mutual funds.

2 | Access to Liquid Assets. These assets are readily available for emergencies, supplemental income, or discretionary spending and do not incur a withdrawal charge. Examples include simple savings accounts, money market accounts, and cash value life insurance.

3 | Predictable Income. This is income that is guaranteed for life no matter what happens in the financial markets. Examples include Social Security, defined benefit pension plan benefits, and annuities that offer lifetime income options.

F U N D A M E N TA L C O M P O N E N T S O F Y O U R R E T I R E M E N T S T R AT E G Y

Growth

Access PredictableIncome

NOT A BANK OR CREDIT UNION DEPOSIT OR OBLIGATION • NOT FDIC OR NCUA INSURED • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY • NOT GUARANTEED BY ANY BANK OR CREDIT UNION

C O M M O N LY U S E D T E R M S

Bond A debt instrument that allows an investor to loan money to a corporate or government entity for a specific period at a fixed interest rate.

Cash Value Life Insurance

A permanent life insurance policy that builds cash value.

Certificate of Deposit (CD)

• A savings certificate entitling the owner to receive interest. • Includes a maturity date and a specified fixed interest rate and can be issued in

any denomination. • Generally issued by a commercial bank and is insured by the FDIC. • The term of a CD generally ranges from one month to five years.

Traditional Fixed Annuity

• Contract issued by an insurance company. • Offers a fixed rate of return that is guaranteed for a specific period.• May offer lifetime income options.

Guaranteed Minimum Withdrawal Benefit (GMWB)

• A “living benefit” generally available as an optional feature with underlying invest-ment products, such as a variable or indexed annuity.

• Does not guarantee the performance of any underlying investment. • Guarantees that a specific amount will be available for withdrawal for as long as the

annuitant lives. Excess withdrawals may have a negative impact on the guaranteed income amount.

Income Annuity • Contract issued by an insurance company. • Designed to provide a stream of guaranteed income for life or for a specific period,

depending on the type of annuity.• Provides little to no liquidity.

Money Market Account

• Type of savings account that typically earns a higher interest rate than a simple savings account.

• Minimum deposit and balance requirements are typically higher than those of a simple savings account.

Mutual Fund An investment product composed of a pool of assets collected from many investors for the purpose of investing in securities such as stocks, bonds, and money market instruments.

Stock A type of security that signifies ownership in a corporation.

Variable Annuity • A contract issued by an insurance company. • Used to accumulate tax-deferred savings over the long term.• Allocates assets among a number of subaccounts or investment portfolios, which

invest in corresponding underlying funds offered through the contract. • Contract value, which fluctuates over time, reflects the performance of the

underlying investments held by the funds selected, minus expenses. • The potential for growth also involves the risk that the investment may lose value.

© 2017 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com.AN7719 1217 CRN202011-221982

This material does not constitute a recommendation to engage in or refrain from a particular course of action. The information within has not been tailored for any individual.Guarantees and payments of lifetime income are based on the claims-paying ability of the issuing company. The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.Before purchasing a variable annuity or mutual fund, you should carefully consider the investment objectives, risks, charges, and expenses. For this and other information, obtain the prospectus from your registered representative. Please read the prospectus carefully before investing or sending money. You may also obtain the prospectuses (or summary prospectuses, if available) for the mutual fund or an annuity’s underlying investment choices from your registered representative.Annuity products are issued by Massachusetts Mutual Life Insurance Company and C.M. Life Insurance Company. C.M. Life Insurance Company, Enfield, CT 06082, is a subsidiary of Massachusetts Mutual Life Insurance Company, Springfield, MA 01111.Securities products and services offered through registered representatives of MML Investors Services, LLC, Springfield, MA 01111-0001 or a broker-dealer that has a selling agreement with MML Strategic Distributors, LLC, Springfield, MA 01111-0001. Both MML Investors Services, LLC, and MML Strategic Distributors, LLC, are subsidiaries of MassMutual, Springfield, MA 01111-0001.

Since 1851, MassMutual has been building a reputation for financial strength and integrity. At MassMutual, we operate for the benefit of our

customers. Our business decisions are based on a single guiding principle: to help people secure their future and protect the ones they love.

Learn more at www.massmutual.com.

MassMutual... Helping you secure what matters most.

A ST R AT E GY S P OT L I G H T

Estate Planning for the Non-Taxable Estate

OverviewThe Tax Cuts and Jobs Act of 2017 (TCJA) increases the federal estate tax exemption to $11,180,000 (2018) indexed for inflation. TCJA does not affect portability; therefore, married couples can pass $22,360,000 (2018) also indexed for inflation, estate tax free. A large majority of states do not have a state estate tax. This means that individuals will not be subject to estate tax. Although this is good news from a tax perspective, this has led to an unintended result. That is, many people who now do not have a taxable estate may procrastinate when it comes to planning their estate, reviewing their current estate plan or by not planning at all. At a minimum, everyone should have basic estate planning documents regardless of the size of their estate. Not having them can be a big mistake.

K E Y P O I N T S

Many people delay or do no estate planning because they think their estate is too small

Estate planning is important no matter the size of your estate

Family dynamics and goals will determine the type of planning needed

Note that under current law, the estate, gift and generation-skipping transfer exemption will sunset for years after December 31, 2025, reverting back to a $5,000,000 exemption, plus an inflation adjustment.

“Basis” PlanningThe basis of the property becomes its fair market value as of the date of death. If assets are given during life, the donee receives a carryover basis, i.e., same basis as in the hands of the donor. If that donee sells the assets, he or she will have to pay capital gains tax on the entire gain since the donor acquired the asset. Therefore, if a lifetime gift of a specific asset is contemplated, the donor should analyze the basis of that specific asset to determine if it is better to give the asset during life or wait until death to pass the asset to the intended donee.

PortabilityFor those dying in 2011 and later, portability allows a surviving spouse to use a deceased spouse’s unused exclusion (DSUE) (up to $11,180,000 in 2018). Subject to some rules, the surviving spouse can add the DSUE to his or her own estate tax exclusion and use it to make lifetime gifts or use it against his or her own federal estate tax. In order to take advantage of portability, the executor of the first deceased spouse must make the election on a timely filed estate tax return. This is important because non-taxable estates are not required to file the return. So incurring the expense to file the return and electing portability has to be weighed against not doing so and saving the expense. The analysis revolves around whether the assets left to the surviving spouse will appreciate above his or her exemption and the size of the surviving spouse’s taxable estate.

The ProblemThere are several reasons why individuals either procrastinate, do not prepare an estate plan at all, or fail to review their current estate plan. They may think they are too young, estate planning is only for the wealthy, or it’s too morbid to think about death. But what people forget is that their circumstances may change and that their estates may grow over time, either through growth of assets or by inheritance. And tax laws may change, subjecting their estates to estate tax. However, there are several reasons, other than estate taxes, to prepare an estate plan. This article will focus on some planning options for those without a taxable estate.

Potential Planning Considerations

Basic DocumentsEvery adult should have the basic documents as a starting point for his or her estate plan. These basic documents include a Will, a durable power of attorney, and a medical directive. These documents can provide estate distribution directions and reduce problems managing their financial affairs if they become incapacitated. Additionally, many people choose to execute a revocable trust. Among other advantages, a revocable trust can avoid probate in the state of death as well as hold out-of-state real estate so as to avoid the cost of probate in multiple states.


Providing for Surviving Spouse and ChildrenEven though a couple’s combined estate is under $22 million (which is a lot of money), does it make sense to leave all of it to the surviving spouse and/or children outright? Are they able to manage the money and make the necessary financial decisions? It may make sense to leave assets in trust for a surviving spouse and name an independent trustee to manage the assets to protect the spouse from possible creditors or predators.

Additionally, children may have similar difficulty managing money. They may have substance abuse issues, unstable marriages or spendthrift problems. Or, parents may just be uncomfortable leaving large sums of money outright to their children. Again, a trust may work in this situation whether it is to control the assets, keep them from creditors or make sure a child hits certain goals, such as finishing college or getting a job. An individual has significant discretion on how and when their heirs receive the assets.

Blended FamiliesSecond (or third) marriages can create additional issues. Spouses want to provide for the current spouse as well as children from a prior marriage. A qualified terminable interest property (QTIP) trust for the benefit of the surviving spouse with the remainder going to children from a prior marriage may be a recommended strategy. However, sometimes the second spouse is near in age to the children from the first marriage or a deceased spouse doesn’t want his older children to wait until the step-parent dies to receive their inheritance. In that situation a different strategy may make sense. Possibly leaving assets directly to the children from a prior marriage at the first death or using life insurance is a better solution.

Special NeedsAssets left to people with special needs must be placed into a properly drafted special needs trust (sometimes called a supplemental needs trust) in order for that individual to keep receiving state and federal aid, such as Supplemental Security Income (SSI). A special needs trust can be established in a Will or inter vivos trust and receive any funds designated to be left to an individual with special needs. Additionally, grandparents and other relatives need to be made aware of the requirements of a special needs trust so they don’t leave assets directly to a grandchild with special needs.

Beneficiary DesignationsMaking sure beneficiary designations are up to date is crucial. It is especially important if there is a death or divorce. Assets such as IRAs, employer retirement plans, annuities and life insurance should all have a primary and at least one contingent beneficiary. There have been too many situations where a married couple gets divorced but forget to remove each other as beneficiary on the assets. The result may be that an ex-spouse receives assets a decedent thought would go to someone else.

Closely Held or Family BusinessIf there is a family business and not all of the children want to take it over, then the challenge would be to somehow equalize the inheritances of those children in the business and those who are not. This becomes more difficult when the business comprises a large portion of the estate. Life insurance can be used to help solve this problem. However, as with all estate planning, this planning should not be left to the last minute.

GuardianshipWhen minor children are involved, it is important to nominate who should raise and care for them. A Will should nominate a guardian in it instead of leaving that up to a judge without knowing the decedent’s wishes. The same person who is chosen to raise a minor child does not have to be the same one to manage that child’s assets. In many situations it may be wise to leave the assets in a trust to be managed by someone other than the individual who is raising the child to ensure that the assets are used for the proper purpose.

The Bottom LineThe foregoing list of planning considerations is not exhaustive. There may be others that apply to other individuals or families. However, the common theme is that whether an estate is subject to federal estate tax is irrelevant to the need to plan. Nontax reasons for estate planning cannot be overlooked when putting together an estate plan. Consult your personal legal or tax advisor regarding your specific situation.

© 2018 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com.AS6026 518 CRN202005-229660

The information provided is not written or intended as specific tax or legal advice. MassMutual, its subsidiaries, employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.

Many parents would like to be able to pay for some or all of their children’s college education. They save money in accounts, such as Uniform Gift To Minors Act (UGMA) and Uniform Transfer to Minors Act (UTMA), and specific college planning custodial accounts like Coverdell Savings Accounts, and state-based college plans. While this money will be useful when it comes to paying the cost of college tuition, how will it affect your child’s financial aid?

A ST R AT E GY S P OT L I G H T

Unlocking the Mystery of Financial Aid Eligibility and Asset Ownership

When faced with filling out the Free Application for Federal Student Aid (FAFSA) form, parents may wonder if they have saved for college in an efficient manner and whether some of their other assets can be counted against them for financial aid eligibility.

There are many choices for a parent who would like to save for college. Is there a “right” place to save for all situations? No. Can knowing how your assets count for financial aid be useful in deciding where and how to save? Yes.

Let’s look at some of the common saving strategies and whether they count as a parent’s asset or a child’s asset and why that makes a difference for financial aid purposes.

Parental Assets 1 | Savings/Checking/Money Market

Account — considered to be 100% includable as an asset on the FAFSA.

2 | Retirement Accounts —• Traditional IRA — Not considered an

asset for FAFSA. However, a choice could be made to withdraw from a traditional IRA to pay qualified education expenses, and it would be exempt from the 10% penalty assessed for withdrawals prior to 59½. The withdrawals, though not penalized, will be subject to income tax.

• Roth IRA — Not considered an asset for FAFSA. A withdrawal from the Roth IRA is tax free up to the amount of contributions, but earnings would still be taxed as income if withdrawn prior to 59½. While the Roth IRA is not an asset for FAFSA, withdrawals need to be reported as untaxed income on the next year’s FAFSA, potentially reducing eligibility for need based on financial aid.

• Employer-Sponsored Retirement Plan (401(k), SEP, SIMPLE, 403(b) — Not an asset for FAFSA. Borrowing could potentially be done from the retirement plan for college expenses, but you will be charged interest on the loan until it is repaid. Loans from these plans, unlike IRAs, are not subject to income tax.

The savings that you are borrowing from are still tax deferred. The disadvantage of using these dollars is that in many plans the loan must be repaid in five years and if it is not, the remaining balance will be considered a taxable distribution. Also, if you leave the employer, the loan may be due all at once.

3 | Permanent Life Insurance — Not considered an asset for FAFSA. While life insurance is primarily purchased for the death benefit protection, parents could choose to take a loan1 out of the accumulated cash value of their life insurance policies to pay for or help pay for the cost of college. Permanent life insurance has the potential to build a cash value, which can be accessed through distribution2 or loan1. Policy loans are not considered to be distributions. It is important to note that policy distributions are treated as a return of your investment in the contract and reduce your tax basis. Once your basis is reduced to zero, distributions will be taxable. Therefore, it is important to talk with your financial professional when you decide to utilize your life insurance policy cash value.

1 Distributions under the policy (including cash dividends and partial/full surrenders) are not subject to taxation up to the amount paid into the policy (cost basis). If the policy is a Modified Endowment Contract, policy loans and/or distributions are taxable to the extent of gain and are subject to a 10% tax penalty. Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.

Loan interest is charged when a policy loan is taken. If you take additional policy loans to pay loan interest, your policy’s cash/account value will be reduced. At some point, no policy values may be available to pay additional loan interest and out-of-pocket payments will be required to prevent the policy from lapsing. Failure to pay out-of-pocket amounts will result in the loss of life insurance coverage and a tax liability in the year of lapse.

2 Distributions can come from current dividend distribution, surrender of paid-up additions, and/or partial surrenders.


until they are considered of the age of majority and able to own investments and insurance. A donor makes an irrevocable gift to the trust and the money is then controlled by the custodian until the child reaches 18 or 21 depending on the state. This type of account will be considered the child’s asset for financial aid, so it can have a high impact on eligibility. Also important to know, this asset will pass to the child at 18 or 21 whether or not the child attends college.

3 | Section 2503(c) Minor’s Trust — Considered an asset for FAFSA. This trust is a separate entity that holds gifts for a child until the child reaches the age of 21. The trustee is allowed to spend the trust’s funds to pay for college expenses for the child. Since this trust is considered an asset of the child, it will have a higher impact on eligibility. If the donor acts as trustee, the trust will be included in the donor’s taxable estate until the child takes over the trust at 21.

4 | Coverdell Education Savings Account — Considered an asset for FAFSA. A Coverdell is a trust created exclusively for the purpose of paying qualified education expenses. This account can be owned by the parent or child. If owned by the child, it can have a high impact on eligibility as it is considered able to be contributed 100% toward the cost of college. These accounts are also referred to as education IRAs.

4 | State-Based College Plans (Sometimes Called Section 529 Plans) — These plans are state-based college savings plans that have a low impact3 on financial aid though they are considered an asset for FAFSA. The money in these plans is controlled by the owner of the account, not the child. So, if the child does not go to college, he or she does not automatically receive the money at a specific age like an UGMA/UTMA account. Anyone can contribute to these plans on behalf of the child. Currently, contributions to state-based plans are usually tax exempt.

Tax benefits may be subject to certain restrictions. Since the account owner is in control of the account, the assets in the account are treated as parent assets rather than that of the child. Some states offer favorable tax treatments to their residents only if they invest in the state’s own plan. You should consult your tax advisor.

Child Assets 1 | Savings/Checking/Money Market

Account — Considered an asset for FAFSA. High impact on eligibility.

2 | UGMA/UTMA Account — Considered an asset for FAFSA. This type of account is also referred to as a custodial account in many states. Children cannot own investment assets or life insurance policies; therefore, a custodian will be required to own it on the child’s behalf

3 http://www.savingforcollege.com/intro_to_529s/does-a-529-plan-affect-financial-aid.php

© 2017 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com.

It is clear that an asset in the name of a child has a higher impact on financial aid eligibility than a parent’s asset. Does that mean you should not use any of the strategies where the child is the named owner of the asset? No. This is simply intended to make the parents aware of the need to plan ahead. Meet with a financial services professional and a tax advisor to look at different strategies that may work for a specific family situation.

Awareness of how assets are owned prior to applying for financial aid can make a difference in eligibility for aid, so be aware and plan ahead.

Not one planning strategy is right for all situations and parents can utilize multiple strategies to accomplish the goal of college funding. Out of the parents’ asset list, permanent life insurance and retirement accounts are not countable for financial aid purposes. Of course, there should be a need for life insurance to purchase a policy as utilizing access to policy cash value is a benefit but the purpose of the insurance purchase should be primarily for death benefit protection. Retirement plans and IRAs have advantages and disadvantages when utilizing them for college planning.

AS8450 617 CRN202006-213100

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.

Income Protection RealitiesIncome is critical to most workers’ financial security, yet they rarely think about how an illness or injury could prevent them from working and put their income at risk.

1 in 4 20-year-olds willbecome disabledbefore they retire8

Average duration for all MassMutualDI claims based on claims incurredfrom 1986 - 2016:

4 – Years

LifeIdentity HomeCar

You protect your car, home, life & identity

Most commoncause of disability³

Disability income gapThe Disability Income Gap is the di erencebetween current net income and the income you would receive if you were tobecome disabled.

The sample rate shown is for a male. DI insurance costs for a woman usingthe same parameters is $1,461.

Income?

$354,900²

$33,666¹ Average priceof a house

$763⁴Large coffee

$1,080⁶ Smartphone

service

$929⁷ Individual disabilityincome insurance

$840⁵ Satellite

television

$1,500,000$50K salary of a

35-year-old retiring at 65

Average priceof a car

90%illness

10%Accident/Injury

Income isyour mostvaluable asset

Look at how the annual costof Disability Income (DI)insurance compares to annualcosts of other products/services

Why not your income?

Chart assumes a 25% tax rate. Actual tax rates may vary.

Annual gross income

Net income

Net income after a disability

$400,000 Salary $100kbonus

$300,000

GAPDisability Benefits

$5,000 BONUS

$50,000 BASE

INCOME

Annual Gross Income

Annual Net Income

$41,250 NET

INCOMEINCOMEGAP

Chart assumes a 25% tax rate. Actual tax rates may vary.NOT FOR USE IN FLORIDA OR NEW YORK.

1 Kelley Blue Book, March 2016.2 Census Bureau, October 2016.3 Council for Disability Awareness 2014 Long-Term Disability Claims Review; Disability Claims by Diagnosis.4 Source: Fastfoodmenuprices.com 9/2017. Daily large coffee at Dunkin’ Donuts — $2.09 per day.5 Source: DirecTV.com 9/2017. XTRA package with DirecTV — $70.00 per month.6 Source: AT&T 9/2017. Unlimited talk, text, and 15GB data — $90.00 per month.7 Male age 30, Radius Choice 4A occ class, 90 day waiting period, benefit period to age 65, $4,050 monthly total disability

benefit. Annual premium for Female client with same assumptions: $1,461.8 U.S. Social Security Administration, Fact Sheet September 2017.

Renewability, Cancellability, and Termination: This policy is Non-Cancellable until the Policy Anniversary on or next following the Insured’s 65th birthday. During that time, we cannot change the premiums or cancel the Policy unless requested by you, and, as long as premiums are paid on time, we will continue coverage. Thereafter, the policy is Conditionally Renewable until the policy anniversary on or next following the Insured’s 75th birthday as long as the Insured is Actively at Work and is not Disabled. We can change the premiums while this policy is Conditionally Renewable.The Policy also sets forth certain limits. Waiting Period: The Policy does contain a Waiting Period. This is the period immediately following the start of Disability during which benefits do not accrue. Medical Examination: A medical examination is required to apply for the Policy. Exceptions, Reductions and Limits of the Policy: Regardless of the Maximum Benefit Period for all Policy and Rider Coverage, the Maximum Benefit Period is 24 months for each period of Disability caused or contributed to by a Mental Disorder. This Policy does not provide any benefit for any Disability:

• during a period of legal incarceration in a penal or correctional institution of more than 7 days or during a period of legal detainment of more than 7 days. Also, this time does not apply for completion of the Waiting Period.

• sustained during declared war or undeclared war or act of war.• caused or contributed to by normal pregnancy or childbirth.• sustained during participation in a riot or insurrection.• caused by any intentionally, self-inflicted injury.• sustained during the Insured’s commission of, or attempt to commit, a felony under local, state or federal law, or while

engaged in an illegal occupation.• that results from, or is contributed to, by a disease, disorder or physical condition that was excluded as a result of the

underwriting process by name or specific description. The Policy does contain a provision which may not cover a Disability which is traceable to a condition existing prior to the effective date of the Policy. There may be other exclusions or limitations associated with riders or endorsements if any are attached to your policy.Disability income insurance replaces a portion of your income with a monthly benefit should you become too sick or hurt to work.Radius Choice may not be available in all states.Radius Choice (policy form #XLIS-RC-15 and ICC15-XLIS-RC; ICC15-XLIS-RC in North Carolina) is issued by Massachusetts Mutual Life Insurance Company. Policies contain exclusions and limitations. For cost and complete details of coverage, please call your MassMutual representative or MassMutual at 1-800-272-2216 (press 3) to be referred to a representative in your area.

© 2017 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com.DI1947RC 1117 CRN201812-202003

Establishing your baseline financial goalsIdeas for those unsure of where to begin their financial journey.

When it comes to securing your financial future, getting started is often the hardest part. That may be because many individuals don’t even know where to begin. But every great achievement starts with one thing: a goal.

Read on to learn how you can help yourself set foundational goals towards attaining greater financial security. So you can protect those who matter most.

2

3

Why are goals so important?

Whenever you start any journey, you need to map out how you will get from where you are now to where you want to be. It’s the same when it comes to your finances: Establishing goals for yourself will help you map out what you want to achieve financially — so you’ll stand a greater chance of actually reaching those goals.

Nothing is set in stone.

Life changes. That means your goals will change over time, too. But setting goals today can help to put you on the right path right now. Then, on a regular basis, you can review your goals and adjust or realign them as necessary.

Important considerations: Types of goals & the key

financial components

There are two types of goals to consider when it comes to your finances — short-term goals and long-term goals.

In addition, you’ll see that planning your financial future will revolve around four key financial components:

• Income• Savings • Retirement• Debt

It can be as easy as 5-10-15-20!

Consider setting your financial goals around these four financial components using the concept of 5-10-15-20:*

5: Increasing your annual income by at least 5% each year

10: Saving at least 10% of your net annual income

15: Targeting a retirement nest egg of about 15 times your annual income

20: Planning to have your debt (excluding your mortgage) paid down within 20 years

Setting your financial goals can be as easy as 5-10-15-20!

*5-10-15-20 are guidelines for your consideration. Your goals may be different based on your personal financial

situation and other factors.

Increasing your annual income

by at least 5% each year

(short-term goal)

Key Question: Do you have a solid understanding of all sources of income that may be available to you?

Important considerations that will help you answer this question:

� Does your employer provide an annual cost-of-living or merit increase that can help you reach this goal?

� Is overtime pay available to you?

� Do you have other sources of income that may be available to you such as rental income?

� Do you have any hobbies or other personal efforts that can be used to generate income?

� Have you met with your tax advisor to review any tax minimization strategies?*

Action steps to help increase your income by 5% each year:

1 2 3

Saving at least 10% of

your net annual income

(short-term goal)

Key Question: How, and how much, are you saving each month (not including retirement savings)?


� Has a household budget been created — and followed — to accurately identify amounts that can be saved each month?

� Have you created an emergency fund equal to at least six months of salary?

� Do you automatically save a certain amount of your pay each month via direct deposit into a savings account?

� Do you know the interest rate for each of your savings accounts? Are you directing more money into higher-yielding accounts?

� Are there regular expenses that can be cut — or minimized — to make available funds that can be set aside for the future?

Action steps to help you save at least 10% of your net annual income:

1 2 3

Putting 5-10-15-20 into action

4

*The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and

representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their

own tax or legal counsel.

5

Targeting a retirement nest egg

of about 15 times your annual

income (long-term goal)

Key Question: Do you have an estimate of when you will retire, and where your retirement income will come from?


� Have you identified your target retirement date?

� Do you know what your estimated monthly Social Security benefit is, based on your target retirement date?

� Do you have retirement accounts, such as 401(k), 457, 403(b), IRA and Roth IRA?

� Do you have other sources of income (such as annuities, rent payments, investment earnings) that can provide you with monthly income in retirement?

� Do you plan to downsize your home or move to another state when retired?

� Have you tried to estimate your cost of living in retirement and how it will affect your retirement income needs?

Action steps to help you target retirement savings of about 15 times your annual income:1 2 3

Having your debt (excluding

your mortgage) paid down

within 20 years (long-term goal)

Key Question: Do you know your total debt and have you made plans to pay it down?


� Do you know your total amount of debt, including student loans, personal loans, and credit cards?

� Do you know the interest rate and applicable terms for each debt?

� Are you giving greater priority to paying down higher-interest loans?

� Do you allocate additional money toward paying down the principal on your debts?

� Have you created a pay-down schedule with estimated dates of completion?

� Do you know your credit score? Have you reviewed your credit reports that are made available by the major reporting agencies?

Action steps to help you plan to have your debt (excluding your mortgage)paid down in 20 years:

1 2 3

MassMutual, its employees and representatives do not offer services or advice related to debt management.

Your financial goals are as unique as you are. And over time, they will change. But by starting today to identify your goals, you can create a strategy designed to help you achieve them.

Working with your MassMutual financial professional can help you identify the financial goals you have in both the short- and long-term — and create a customized road map that can help you work towards those goals. He or she can help you learn about and evaluate a wide array of financial and protection vehicles that can serve several purposes — some of which can provide you with valuable protection for yourself and your loved ones today, as well as help you work toward greater financial security in the coming years.

Financial goals can be met with the help of whole life:

You can access your whole life policy’s cash value during your lifetime to help with the following financial goals:

• Supplemental retirement income• College savings• Financing a business-related need• Debt reduction or elimination

Any dividends received can be used for a wide array of purposes — including increasing your life insurance protection and reducing your premium.

Products and solutions that can help you reach your goals

6

1 Access to cash values through borrowing or partial surrenders will reduce the policy’s cash value and death benefit, increase

the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured.

Whole life insurance

A whole life insurance policy has value beyond the immediate protection the death benefit it provides. The policy has the ability to build cash value1 and participating whole life policyowners are eligible to receive dividends. While dividends are not guaranteed, the company has paid them consistently since the 1860’s.

Whole life can also help you:

� Protect who matters most

� Plan for retirement

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Disability income insurance

One type of insurance that’s commonly overlooked when it comes to planning for a more secure financial future is individual disability income insurance (DI).2

If you become disabled, you’ll still need to pay your bills and put food on the table. Even if you have disability income insurance through your employer, it may not be enough.3 DI can help protect more of your income if you become too sick or injured to work for an extended period of time.

DI can also help you:

� Plan for your financial future

� Protect your finances from the unexpected

You insure many assets like your home, your car and your life. But when you think about it, your ability to earn an income — when viewed over your entire career — is your most valuable asset. If you had to stop working due to a disability, the income you’re earning now — and the income many of your financial goals rely on — may not be there anymore.

Annuities

Annuities are specifically designed to help you reach long-term financial goals, whether you want to put money aside for the future, enjoy guaranteed income you can’t outlive, or both. Annuities may help your savings grow faster because you don’t pay income taxes on the money in your contract until you take a withdrawal. Annuities also are unique in that they can provide guaranteed4 lifetime income.

Annuities can also help you:

� Save for retirement

� Manage income in retirement

As the owner of the annuity, you choose the income option that best meets your needs. You can elect to receive income from your annuity for as long as you live, for a specific period of time, or a combination of both.

An annuity can be a valuable financial vehicle — one that can help you fund your changing goals throughout your lifetime. Your financial professional can help you understand how annuities work — and whether or not one might be worthwhile for you.

2 Disability income insurance has exclusions and limitation. For costs and complete details of coverage, call your agent

or MassMutual at 1-800-272-2217 for referral to an agent.

3 Supplemental individual disability income insurance does not coordinate with group long term disability coverage.

Claim decisions are rendered independent of each other.

4 Guarantees are based on the claims-paying ability of the issuing company.

© 2017 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com.

FY1052 817 CRN202008-216933

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual) (Springfield, MA 01111) and its

subsidiaries, C.M. Life Insurance Co. and MML Bay State Life Insurance Co. (Enfield, CT 06082). C.M. Life Insurance Co.

and MML Bay State Life Insurance Co., are non-admitted in New York.

For educational information and interactive tools that can help you reach your financial goals, visit www.massmutual.com.

Real people. Real issues.

Take inventory of how well you are navigating your financial future.For many people, the primary over-arching financial mistake is a failure to effectively plan for the future — whether that means failing to have a plan in place to minimize debt, protect your income, or build a retirement nest egg. Inside you’ll find nine planning best practices than can help individuals and families build a foundation for a solid financial future.

PERSPECTIVES

1 Establish a plan to pay down your debt so that it doesn’t interfere with your financial priorities.

1 2 3 4 5

According to a report from The PEW Charitable Trusts, Americans feel conflicted about debt: Nearly 7 in 10 (69 percent) said debt is a necessity in their lives, even though they prefer not to have it.1 Consider bucketing your debt into “good” debt (mortgage, student loan) and “bad” debt (credit card) and focus on paying down the bad debt first.

2 Develop a plan to protect your income in the event that you become disabled and can’t work.

1 2 3 4 5

Your ability to earn an income is your most valuable asset. Having an income protection plan in place, that may include disability income insurance, is a good way to help ensure you can meet your financial obligations should you become sick or disabled and cannot work.

3 Craft a plan to protect your loved ones in the event you are no longer around to care for them.

1 2 3 4 5

What if you were no longer around to provide for your family? Would your loved ones be able to achieve their dreams of a comfortable retirement or a college education? Would they even be able to afford basic living expenses? Having a plan in place, that may include life insurance, is a good way to help ensure your family is protected in the event you are no longer around to care for them.

4 Establish a savings plan to help fund your child’s education.

1 2 3 4 5

According to MassMutual’s State of the American Family study, nearly half of households agree that paying for child’s college education is something that they insist on.2 If your goal is to help your children pay for the rising costs of a college education, then starting a savings plan early with the right education funding vehicles is critical.

5 Have an understanding of the amount of income you will need in retirement.

1 2 3 4 5

You may need as much as 70% of your pre-retirement income to maintain your lifestyle in retirement. While this may be a good first start, you should still think about all of the financial obligations you

2

5 = completed with a written plan

4 = in the process of creating a plan

3 = talked about doing something, but have yet to take action

2 = given it some thought

1 = done nothing, haven’t even thought about it

Review the list and rate (by circling the appropriate number) how well you are doing with each of these financial issues.

3

will have in retirement, such as health care and living expenses, as well as your goals in retirement — traveling, starting a business, taking up new hobbies. All of these factors will provide insight into the amount of income you will need in retirement.

6 Have a diverse pool of retirement assets from which to pull income.

1 2 3 4 5

Social Security retirement benefits are a core component of retirement income for many Americans. They are one of the few sources of retirement income that is predictable, unaffected by market ups and downs, and may be adjusted for inflation periodically.

In addition to Social Security, a sound retirement income strategy addresses three fundamental components:

– Growth potential. – Access to liquid assets. – Predictable income.

The key to retiring confidently is to consider allocating portions of your retirement savings to vehicles addressing these components.

7 Have a plan in place so you are not a burden to your family as you age.

1 2 3 4 5

A growing concern and source of financial stress for many is the fear of being a financial burden on their loved ones as they age. Over three-quarters of households say that it’s important that their children aren’t burdened by taking care of them when they are older, indicating that families wish they knew more about how to plan for any potential long-term care issues that may arise later in life.2

8 Develop an estate plan that allows you to leave a legacy to your loved ones or favorite charitable organizations.

1 2 3 4 5

Estate planning is one of the most important things you can do for yourself and your family. Without proper planning, assets will pass at your death according to the rules of the state that you live in. Depending on the complexity of the estate, this could create some inheritance and tax issues, as well as not allow your assets to pass on to those you care about most in the manner that you choose. It is important that all adults create at least a simple Will that states how they wish assets to be distributed and have a plan in place to help pay for any potential tax burdens at death.

9 Ensure all strategies are flexible enough to allow for financial independence should your family situation ever change.

1 2 3 4 5

Life is filled with uncertainties, it’s difficult to lock in financial strategies that will account for every possible circumstance you may encounter. It’s these types of situations that sometimes prevent people from planning in the first place. In order to build a strategy that will stand the test of time, in spite of a world filled with uncertainties, it must be flexible. There are numerous ways that financial strategies can be structured to provide future flexibility and adjust with your evolving needs.

Add up your score

© 2018 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com.FY1053 618 CRN202106-231661

1 The Pew Charitable Trusts, The Complex Story of American Debt, 2015.2 MassMutual State of the American Family Study, 2018. Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual) (Springfield, MA 01111-0001) and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company (Enfield, CT 06082). C.M. Life Insurance Co. and MML Bay State Life Insurance Co., are non-admitted in New York.

How did you do?45–35: Congratulations. You are doing a great job addressing the real issues faced by real people.

34–25: Kudos for putting thought into addressing these issues. If you haven’t already, take the next step to begin working with a financial professional to help secure your financial future.

24–15: It’s time to stop putting it off. A plan is no good if no one is aware of it. Create real action steps to protect your financial future.

14 or lower: More attention is needed. It’s never too late to start. A financial professional can help to provide guidance on different types of strategies that may offer clarity to your financial future.

Based on how you did on this scorecard and the information detailed in this seminar, think of five action steps you can take immediately that may address your family’s needs.

1.

2.

3.

4.

5.

Share these results and action steps with your seminar presenter. He/she would welcome the opportunity to learn about your family and discuss ways for you to prepare for long term success.

Contact Information:

Name:

Phone Number:

Email:

Protect Your Value as a ProviderFinancial security for the people you care about

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Your family depends on what you provide for them. Protecting their financial security with life insurance is an important way to help ensure the future you envision for them.


1 Rate as of May 31, 2017, based on a 35-year-old male, Ultra Preferred Non-Tobacco underwriting class. All policies are subject to underwriting approval and premium costs will vary.

Your value as a provider may be your family’s single most valuable asset. Protect it with life insurance.

Insure What Matters Most to YouYour value as a provider may be your family’s single most valuable asset. It makes sense to protect it with life insurance.

Life insurance can be very affordable, and we can help you determine how much coverage you need and which type of policy is the best fit for your situation and budget.

A healthy 35-year-old male could purchase $500,000 of 20-year term life insurance for about $25 per month.1

The value you provide to your family, includes:

• Income — The money you earn helps pay for the basics like a home, food and clothing. It also allows you to save for things like college, weddings and retirement.

• Benefits — These include health and dental insurance, as well as retirement plans provided by your employer.

• Household Responsibilities — The cost of caring for children or maintaining your home can add up if you have to pay for these services.

H O U S E H O L D R E S P O N S I B I L I T I E S

B E N E F I T S

I N C O M E

© 2017 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. All rights reserved. www.massmutual.com.LI7081 717 CRN202007-213642

Vantage Term 20 Life Insurance (Policy Form TL-2009 and ICC09TL in certain states, including North Carolina) is participat-ing, annually renewable term life insurance issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001. Dividends are not expected to be paid.

Other insurance products issued by MassMutual and its subsidiaries, C.M. Life Insurance Co. and MML Bay State Life Insurance Co. (Enfield, CT 06082).C.M. Life Insurance Co. and MML Bay State Life Insurance Co., are non-admitted in New York.

Since 1851, our business decisions have been guided by our customers’ needs. Today, we offer a wide range

of financial products and services to help people secure their future and protect the ones they love.

Learn more at www.massmutual.com