Is an annuity better than a 401K? 16 Feb 2023, 9:58 pm

Serra Benefits & Insurance Services is here for you now and well into retirement. We offer fixed annuity retirement plans to supplement your income. This is your SAFE MONEY. Fixed annuities do not run the risk of unexpectantly losing money in the stock market. Especially considering time is valuable and we have less time to financially recover from market instability.

What is an annuity?

An annuity is a long-term investment contract issued by an insurance company. In return for your investment, they provide a reliable, steady stream of income for the life of the contract. Annuities are a good idea if you are nearing retirement and are looking for a strategy to protect yourself from outliving your income or to supplement your income.

You can get a fixed annuity in which the payments are spelled out exactly ahead of time in the contract. Or you can get a variable annuity with the potential for higher – or lower – payments, depending on the performance of a traditional investment portfolio. 

How does an annuity work?

Fixed Annuities work by providing periodic payments of steady income in the amount specified in the contract. If your contract says the payout rate is 5% on a $100,000 annuity, for example, then you will receive $5,000 worth of payments every year covered by the contract.

How much does a $100,000 annuity pay per month?

Let’s take a fixed, immediate annuity with a 5% payout rate as an example. That means, each year, you will receive payments totaling an amount equivalent to 5% of your investment.

Is an annuity better than a 401K?

One is not necessarily better than the other. Many will fund a 401K while still working. Then get an annuity (1 or more) at or in retirement. They may also opt to roll their 401K into an annuity for a guaranteed steady stream of income. An annuity and 401K are both retirement accounts with some significant differences. Let’s look.

Availability

• 401(k) plans are available only to individuals whose employers offer them. 
• Annuities are not employer-sponsored and can be purchased by anyone.

Contribution limits

• There are contribution limits for 401(k) accounts. 
• There are no contribution limits for annuities. 

As of 2022, the annual 401(k) contribution limit was $20,500.

Tax deferrals

• Both annuities and 401(k) accounts provide the ability to defer paying taxes on earnings until the money is withdrawn. However, contributions to 401(k) accounts may be deducted from your taxes in the years in which they are made. Contributions to annuities may not be tax deducted.

Taxes on withdrawals

• Because of that 401(k) deduction, withdrawals from those accounts are taxable in their entirety. Only the portions of annuity withdrawals that represent earnings are taxable.

What is the downside of an annuity?

An annuity is a long-term contract. Terms are often several years or more. Although accessible, there are also penalties for taking money out before age 59.5. Ideally, annuities are a good source of lump sum or lifetime income.

Are annuities safe?

Annuities are a safe investment. However, like any financial product, it is important to purchase from a highly rated, well-established insurance company with a good reputation. At Serra Benefits, we are appointed with all the major top-rated companies. We can consult, shop, and quote the most competitive retirement plans to fit your needs.

How Small Businesses in Oceanside Can Attract Big Talent With Benefits Packages 22 Feb 2021, 8:48 pm

Traditionally, small businesses have been at a disadvantage to their larger competitors when it came to benefits packages and attracting top talent. Many small businesses simply did not include the best benefit packages for their employees and prospective hires.

For many small businesses, this was a bit of a misstep, because, in addition to salary, great benefits are what many employees desire these days (especially with the ever-increasing costs of healthcare). If you are looking to attract top talent for your small business, you need to be reviewing your benefits packages. Here are some of the reasons why small business owners need to consider them.

Attraction and Retention

Your businesses can attract the right people with great salaries. Retaining them is another issue. If an employee runs into a health problem that takes most of that salary away, then he or she may be forced to leave to find a job with better benefits.

By establishing employee benefits, the company commits to investing in its workers. In turn, this reduces outside stress on the employees should they or their families have a health issue arise. Not only does this help to retain staff members, but it also could increase their productivity.

Saving Money

Companies and their employees both save money with benefits. The business reduces its expense liabilities because contributions are tax-deductible. Employees can get more money back on their tax returns since their contributions are taken out before federal, state, and social security withdrawals.

Reinforced Community

Teamwork is critical in small businesses, and employee benefits help to reinforce the belief that everyone is equally represented and cared for. Everyone in your business can receive the same benefit options and select the plan that is best suited to their situation. Employees want to know that they matter to you and the business. Offering great benefits is one of the top ways that you can show them that they are important and valued.

For more information on employee benefits packages for small businesses, contact Serra Benefits today or review some of our offerings online.

The Importance of Long-Term Care Insurance 15 Sep 2020, 10:48 pm

Human life expectancy has come a long way, but with longer lives comes a need for more extensive care. Long-term care, described as help needed to accomplish basic personal tasks in everyday life, has become a necessity for many people at some point in their lives. In fact, research has shown that 58% of men and 79% of women aged 65 and older will need long-term care eventually.

If so many people require long-term care, it’s no surprise that people seek out the benefits of long-term care insurance. Let’s look at why you should consider investing in it sooner rather than later.

Cost of Long-Term Care

While your regular health insurance or Medicare may help pay for immediate medical expenses, like prescriptions or appointments, long-term care insurance helps to compensate for the costs of living with long-term, chronic illnesses. Without it, you would be responsible for paying the costs out of pocket.

That might not seem so bad. After all, how much could it really cost? Well, it depends what kind of service you need. If you only require Adult Day Health Care, you can expect to pay about $1,517/month. However, if you’re in need of more extensive care, you should be prepared to dispense an average of $8,121 monthly for a private room in a nursing home. To put it into perspective, those who are unlucky enough to develop dementia will likely be paying more than one million dollars for care over their lifetime.

Cost of Insurance Premiums

The premiums you pay for your insurance are based on your age and your health status at the time of application, so it’s best to get approved for long-term care insurance well before you actually need it.  

According to the American Association for Long-Term Care Insurance, individuals can expect a 2-4% rate increase per year in their 50s and a 6-8% increase per year in their 60s. Clearly, a long-term care insurance policy is best purchased before your sixtieth birthday.

While you may feel too young to start thinking about your future, the importance of long-term care insurance is a timely affair. For more information or to talk about your options, feel free to contact Serra Benefits & Insurance Services online or to give us a call at 760-439-9700.

Life Insurance 7 Sep 2020, 9:11 pm

Young adults who are just starting out need life insurance for the new, big responsibilities they have, such as getting married, buying a house, or starting a family. However, just because you’re getting older doesn’t mean these responsibilities go away: in fact, many adults heading into retirement still have dependents, home mortgages, and debt. While your needs and priorities may shift from the days when you were a young adult, you can still benefit from life insurance after you retire.

Here are some of the reasons you’re never too old to invest in life insurance.

Longer Life Span

With so many medical advancements to keep us healthy, our life spans are increasing. On average, men live to age 84 and women to age 87, which is almost 20 years longer than in the 1950’s. If you retire at 65, you still have 20 years to support yourself. Are your pension savings and retirement income going to be enough? If you’re unsure, it’s a good idea to consider a life insurance policy to supplement your savings.

Debt

Debt is a fact of life for many families, including retirees. Increased medical costs, real estate investments, and other obligations can weigh heavily on your wallet, and on your loved ones in the event of your death. Life insurance coverage can reduce the burden on your remaining family members in the event that you have outstanding debt.

Dependents

Family structures aren’t as straightforward as they used to be. Recent and current economic pressures have resulted in situations where children remain at home, or where grandparents are the primary caregivers for their grandchildren. Additionally, those with children or a spouse that requires medical care or assisted living are often caregivers for life. Life insurance policies can help provide for dependents when you are no longer there to care for them.

Final Expenses

One of the main purposes of life insurance is to protect your loved ones after you’ve passed away. Therefore, it’s important to also consider final expenses such as funeral and burial costs and the potential financial burden they can impose on your remaining family. These services can be costly, and if your family can’t afford the costs, life insurance can help them honor you without added financial stress.

If you have questions or are ready to discuss life insurance, get in touch with us at Serra Benefits & Insurance Services online or by calling 760-439-9700.

Different Types of Life Insurance Explained 30 Aug 2020, 6:52 pm

Putting Off Life Insurance? How Serra Benefits & Insurance Services Can Help You Overcome What’s Holding You Back

If we took a national poll about shopping for life insurance, most of us would admit that we would rather do nearly anything but. At Serra Benefits & Insurance Services, we understand, as well as the reasons most people want to avoid the process. Let’s take a look at some common barriers that prevent people from deciding to find a life insurance agent and get the coverage they need:

• “I don’t want to spend money on something I don’t need right now.”—We get it. We think of life insurance as something older people need, especially if we are younger and in good health. No one wants to face the possibility of dying unexpectedly, and the sheer thought makes us acutely uncomfortable. However, you well know that unexpected tragedies or illness can strike indiscriminately. You need to prepare for your family’s future, and not let personal discomfort jeopardize it.
• “The policy options are too confusing, and I’m worried an agent will pressure me into expensive coverage I don’t need”—Our team knows this can be frustrating, which is why you will have the different types of life insurance explained in a way you can understand. Also, we focus on your goals and not sales targets, so that your coverage balances both your needs and your budget.
• “I don’t even know where to start when estimating the coverage I need.”—This is understandable, but we can help. A young professional with a stay-at-home partner and children clearly needs much more coverage than a debt-free retiree seeking burial-only coverage. We take the time to get to know you, your goals, and help you work through various scenarios so that you can see the financial picture clearly and make decisions that are right for you.
• “I can’t afford life insurance.”—By far, this is the most common excuse people have, but we are here to show you that you really can.

When you contact us, you will get a caring and compassionate team that will help you understand and compare life insurance types, and get the right coverage for you. Don’t procrastinate another day and gain the peace of mind that comes from knowing you are covered.

Need a Medicare Supplemental Plan? 6 Aug 2020, 6:26 pm

How Life Insurance Will Benefit Your Children 28 Jul 2020, 10:21 am

Not everyone wants to become a parent, but those who choose to have kids usually experience a dramatic change in their lives. You start thinking of “we” instead of “me”, and nothing else is more important than giving your little loved ones a life of health and happiness. You might not have realized it yet, but purchasing a life insurance policy is a great demonstration of love. Here’s why:    

Nobody Likes To Think About Death, But…

Death is not exactly the favorite topic of conversation for most people. In fact, psychology explains very well how we all fear death, but we are told to ignore it. The younger you are, the more you’re inclined to pretend that it’s never going to happen. The truth—and we understand it’s hard to accept it—is that we’re not in absolute control of our lives. How many stories have you heard about someone who left us too soon?

Life is unpredictable, but purchasing life insurance can give you some control of what happens after you’re gone. If you have someone who depends on you financially, it’s a way to take care of them and ensure their needs will be fulfilled.

…Your Death Is Not Only About You

Raising children is hard: it requires planning, patience, and unconditional love. After all, you want to ensure they will be happy and enjoy a good quality of life. However, the cost of raising kids goes beyond basic needs. Think about clothes, extracurricular activities, movie tickets, and birthday parties. The list of expenses looks almost endless.

How can anyone afford that? Well, becoming a parent also requires understanding that you’ll have to make sacrifices. Your children’s needs are more important than your dream vacation, for example.

Life insurance can give you peace of mind because you know that your kids will continue to enjoy the quality of life you wanted for them. The emotional impact of an unforeseen death is inevitable, but financial ruin is not. Remember that someone will still have to pay the bills and it might be too much pressure on the shoulders of your significant other, family, or friends.

Don’t make your family suffer twice! At Serra Benefits & Insurance Services, we offer many types of life insurance: term, permanent, universal, and final expense. Let us help you identify which one best suits your needs! Contact us through our website or call (760) 439-9700 to get started.

Why You Need To Choose And Update Your Beneficiaries 1 Oct 2019, 9:28 pm

Death can be difficult and nobody wants to think about it, but it’s also part of life.

We don’t mean to be downers, but we have seen many people not plan at all for the unexpected or inevitable. For example, when the deceased leaves a list of beneficiaries that is not up-to-date, families can be caught off guard. Sometimes the information left in a will differs from the life insurance policy, which can also lead to disputes.

While situations like these might put extra grief and stress on families, they’re completely avoidable. As long as you plan ahead, you can prevent family fights over your assets.

Why You Should Choose A Beneficiary

Proceeds from insurance policies, pension plans, and retirement accounts can go directly to your beneficiaries and bypass probate. When you don’t specify a beneficiary—or more than one, which is perfectly possible—your money goes to the estate, which causes a couple of issues.

First, it takes more time for your family to gain access to your assets. In some cases, more than a year. If you have someone who depends on you financially, this person will likely have a hard time.

Second, once your money is transferred to the estate because you didn’t choose a beneficiary, creditors can claim it. For example, if you owe money to anyone, these people are entitled to payment from your funds. On the other hand, your beneficiaries are not responsible for paying your debts.  Tips For A Choosing A Beneficiary

• Always have a primary beneficiary and a secondary/contingent beneficiary.
• Opt for revocable beneficiaries, so you can replace them without their consent (E.g: An ex-husband or ex-wife).
• Designate the percentages your beneficiaries will receive instead of specific amounts.
• Keep your list of beneficiaries updated.
• Get the advice of an attorney if you intend to name a minor as a beneficiary.
• Keep in mind that beneficiary designations can override your will.

Don’t let your family fight over your assets! At Serra Benefits & Insurance Services, we offer many types of life insurance and we can answer your questions and concerns regarding beneficiaries. Our experienced team is prepared to assist you with your needs! Contact us through our website or call (760) 439-9700 to get started.

When Should You Get Disability Insurance? 28 Mar 2019, 8:19 pm

Disability insurance can safeguard your income when injury or illness leave you unable to work. By replacing a portion of your income, a disability insurance policy ensures that you have the financial security to cover essential living costs like rent or mortgage payments, tuition, food, and utilities.

Unlike life insurance, many individuals don’t perceive a need for disability insurance until they find themselves unable to work. For many young workers, in particular, the risk of disability or illness is not seriously considered. However, nearly 1 in 4 20 year-olds will become disabled before reaching age 67. It’s also easier and less expensive to get disability insurance for young and healthy workers.

Taking the following factors into consideration will help to determine whether it’s the right time in your life to consider a disability insurance policy:

When Someone Depends on Your Income

If other people—spouses, parents, or children—depend on your income to cover living expenses, disability insurance can help to ensure that you are still able to provide for them. Even if you are the only person dependent on your income, it is important to consider whether you would be able to maintain financial security if your income were to disappear.

When You’re in a High-Risk Industry

Workers in manual industries such as labour, manufacturing, or field work are naturally at higher risk for injury or illness. For example, if a carpenter breaks a limb, it can drastically reduce his or her ability to work effectively. Even if a crew or company employs experienced workers and safe work practices, there is always a risk that an accident can leave an employee on the sidelines (or at home) until they have fully recovered.

When You’re At Risk for Illness

The majority of long-term absences are actually caused by illnesses, rather than accidents. For example, cancer is a leading cause of long-term work absence. Disability insurance also protects your income if an illness leaves you unable to work for a long period of time. For those at high risk for illness (or suffering from chronic or recurring illnesses or injuries), disability insurance can offer greater peace of mind.

When Your Work Insurance Package Doesn’t Cover Disability (or Isn’t Enough)

Many employers will include some form of disability insurance in employee benefits packages or health plans. However, it’s important to carefully consider the level of coverage offered, as group benefits may not be sufficient to ensure your financial stability without your regular income.

If you have questions about whether it’s the right time for you or a loved one to seek out disability insurance, Serra Benefits & Insurance Services in Oceanside, CA can help you make an informed decision about your insurance needs. Contact us today at 760-439-9700 to find out more.

3 Reasons Why You Need Travel Insurance 18 Jun 2018, 10:46 pm

We’re sure that you don’t plan to get sick or to break a leg when you go on a trip, but unfortunately, it might happen. In cases like these, a travel insurance policy can help you get the medical assistance you need and cover your expenses. You know the drill: “Better safe than sorry”. Here are some reasons to consider travel insurance:

Cover Your Medical Expenses

If you think that suffering an accident is bad, it gets ten times worse when you’re miles away from home. US residents traveling abroad are not necessarily covered by their health insurance, so purchasing a travel insurance policy is worth it. On the other hand, many foreign nationals traveling to the United States don’t know that medical services are very expensive in this country. When you’re covered, you enjoy your trip more because you don’t have to worry about it.

Run Away From Natural Disasters

We don’t want to be a buzzkiller, but some of the most popular travel destinations in the world are susceptible to natural disasters. There are active and dangerous <volcanoes in Hawaii that could dampen your vacation plans. Japan is undoubtedly a wonderful place to visit, but the country is often hit by earthquakes. Unless you’re a very adventurous person, chances are you’ll want to cancel your trip and get a refund. That’s what travel insurance is for.

Recover Your Money If You Need To Cancel

Let’s suppose that you have a business meeting in another country, but you get sick prior to the departure or you’re going on vacation and a parent dies. Most travel insurance policies cover pre-departure trip cancellations because, without it, it’s very unlikely that airline companies will give your money back.

Don’t risk your travel investments! At Serra Benefits & Insurance Services, we’ve got you covered through a partnership with Petersens International Underwriters and Geo Blue for international medical insurance. After all, if you keep yourself insured at home, why wouldn’t you insure yourself while traveling? Contact us through our website or call us at (760) 439-9700.