Financial Services to Help You and Your Family
No matter what financial circumstances you are in, our Financial Services Representatives are here to help protect you and your family through the ins and outs of life’s many changing events. Whatever your unique situation, we have financial solutions designed to help.
We’ll work with you to help you prepare for the unexpected and take you step-by-step through the uncertainties of planning for your financial future.
Family and Life Changes
Big changes can happen in your life at any time, so you have to think carefully about financial decisions that may affect your future. Whether your family is growing or you’re trying to limit the impact of a transition on your loved ones, remember your long-term goals. You may be considering important life events like college or marriage; you may be put in a position of caring for the people who supported you throughout your life; or you may be negotiating a settlement to divide your combined assets—no matter what the situation, you’ve got a lot to think about. Planning now could help make the difference between just getting by and living comfortably down the road.
Here are some options to consider:
Preparing for the Future
As you develop your financial strategies, be sure to protect your assets and family against life’s uncertainties. There are many considerations to take into account as you approach retirement age.
Given today’s longer life spans and active lifestyles, you need to ensure you have a steady stream of retirement income. You may also be concerned about contributing to your children or your grandchildren’s college education. Finally, you should establish an estate plan to make sure the assets you’ve accumulated pass on to those you love, according to your wishes. Insurance coverage can provide a solid foundation for your future, protecting you and those who depend on you for financial security. Some basic protection planning now can help ensure you have the income and assets to meet your financial goals in the future.
Without proper planning and protection, unexpected hardships can have a devastating financial impact on you and your family. Unforeseen events, such as a serious illness, an accident that prevents you or a family member from working, the loss of a loved one, or the immediate financial needs of a child with special needs, may occur at any time. You don’t have to manage these situations alone. Our Financial Services Representatives have created a variety of solutions to account for your unique situation. Take action now to help ease your financial burdens in the future.
Help secure a more comfortable future with solid planning today. Protecting your wealth and assets involves taking advantage of a diverse array of financial solutions tailored to your long-term needs. You may be budgeting for the mortgage on a new home or learning to manage newfound wealth. Now it’s time to look toward the future to help protect your assets. As you think about ways to minimize your taxes, fund your retirement, and protect loved ones, you can work with our Financial Services Representatives to make the process easier.
Here are some options to consider:
529 College Savings Plans
If you find yourself intimidated by the ever-rising price of higher education, then a 529 college savings plan might be a key component in saving for a college education. A 529 college savings plan is a tax-advantaged way to save for college and pay for higher education expenses. Unlike some other savings vehicles, a 529 college savings plan may allow you to make sizable contributions. The funds may generally be used for any qualified college or higher education expense, including tuition, room, board, fees, books, supplies, and equipment. Tax benefits may be subject to certain restrictions.
Money in a 529 college savings plan grows tax deferred. And you may be able to withdraw the money without having to pay federal and state income taxes—depending on the plan and where you live—as long as it’s used to pay for qualified, higher-education expenses. 1 If the money from 529 college savings plans is used for other purposes, the earnings portion of a withdrawal is subject to ordinary federal income tax, an additional 10% federal tax, and any applicable state income taxes. 529 college savings plans may also affect a student’s eligibility for financial aid.
Types of 529 Plans
Although many details of 529 college savings plans vary by state, they generally come in two forms:
- College savings plans—allow you to invest your money in an account to pay for the student’s higher education expenses. Students can use the funds for qualified expenses at accredited institutions in the U.S. and abroad.
- Prepaid tuition plans—allow you to lock in tuition rates at eligible colleges or universities with a lump-sum investment or monthly payments. In other words, since you are paying in advance, you are avoiding potential tuition inflation down the road.
Gift Tax and Estate Tax Benefits
529 plans are partially exempt from the gift tax. You can contribute up to $14,000 ($28,000 for married couples) annually2 per beneficiary, or up to $70,000 ($140,000 for married couples) over a five-year period, without triggering the gift tax.3
Keep in mind that your gifts are excluded from your estate, so investing in a 529 Plan can be a smart strategy to reduce your estate tax.
Funds may be withdrawn without penalty if the beneficiary receives a scholarship (withdrawals can be made up to the scholarship amount), or in the event of the death or disability of the beneficiary. Ordinary federal and state income taxes would be owed on any investment earnings included in gross income.
1 A federal 10% penalty may be imposed on the earnings portion of a non-qualified withdrawal in addition to ordinary income tax.
2 Annual exemption amounts are subject to revision by the Internal Revenue Service.
3 If the Account Owner utilizes the special five-year lump sum exclusion and dies within five years of the funding date, the portion of the contribution allocable to the years remaining in the five-year period (beginning with the year after the Account Owner’s death) would be included in the account owner’s estate for Federal estate tax purposes. Clients should consult their tax advisor.
Investments in 529 college savings plans are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested.
Conditions, such as contribution limits, vary by plan. 529 college savings plans are subject to market risk and volatility. Accounts may lose or gain value. Diversification does not assure a profit or protect against loss
Before investing in any plan, investors should carefully consider investment objectives, risks, charges and expenses. Plan disclosure documents contain this and other information about the plans, and may be obtained by asking your financial advisor. Read these documents carefully before investing
Some states offer favorable tax treatment to their residents only if they invest in the state’s own plan. You should consult your tax advisor.
The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. We are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
People are living longer and that means more time and savings will be spent in retirement. If you need a tax-deferred investment to provide a guaranteed1 stream of income for life or a specified number of years, it might be worth considering an annuity. An annuity is a contract between an insurance company and an annuity owner. In exchange for a purchase payment, or series of payments, the insurance company guarantees1 to pay a stream of income in the future.
There are two types of annuities—Immediate and Deferred.
An immediate annuity is usually purchased with a single premium and begins a stream of income within the first 12 months from the date of issue. You decide when payments will begin within that period and how long to receive income.
- Immediate Fixed Annuity
An immediate fixed annuity provides a guaranteed and predictable stream of income during the payout period.
A deferred annuity is specifically designed to help accumulate assets for retirement. It also offers the ability to turn those assets into a guaranteed stream of income at some point in the future. You decide when payments begin and how long to receive income.
- Deferred Fixed Annuity
A deferred fixed annuity earns interest during the contract’s accumulation period. The interest rates are set by the issuing company and are guaranteed not to be lower than the minimum guaranteed interest rate shown in the contract. A contract’s accumulated assets can be converted into a guaranteed stream of income for the future.
1 Guarantees are based on the claims-paying ability of the issuing company and do not apply to the investment performance or safety of the amounts held in the variable investment options.
Annuities are not appropriate for everyone. There are fees and charges associated with owning an annuity.
Annuities do not provide any additional tax advantage when used to fund a qualified plan. Investors should consider buying an annuity to fund a qualified plan for the annuity’s additional features, such as lifetime income payments and death benefit protection.
Variable annuities are sold by prospectus. Before purchasing a variable annuity contract, investors should carefully consider the investment objectives, risks, charges and expenses of the variable annuity contract and its underlying investment choices. For this and other information, obtain the product prospectus and underlying investment choices prospectus from your registered representative. The prospectuses should be carefully considered before investing or sending money.
If taken prior to age 59 1/2, a 10% federal income tax penalty may apply. This information is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. MassMutual, its employees, and representatives are not authorized to give legal or tax advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Principal Underwriters: MML Distributors, LLC (MMLD) and MML Investors Services LLC (MMLISI) Members FINRA (www.finra.org) and SiPC (www.sipc.org) MMLD and MMLISI are subsidiaries of Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001.
Insurance products issued by Massachusetts Mutual Life Insurance Company, Springfield, MA 01111 and its subsidiary CM Life Insurance Company, Enfield, CT 06082.
Disability Income Insurance
A sudden interruption of income-due to an extended period of sickness or injury-can have serious financial consequences for many of today’s employees. If you are lucky, you may receive group long term disability benefits through your employer. However, you will need to make sure the benefits available through your group long term disability coverage are adequate for your needs. Group long term disability benefits are taxable if your employer pays the premiums, may be capped at a relatively low amount, and may not cover variable income such as bonuses or commissions. As such, these benefits may not be enough to maintain your lifestyle or pay all your bills if you become too sick or injured to work.
An individual disability income insurance policy can help supplement your group long term disability benefits and protect a larger portion of your income. This, in turn, provides a fundamental layer of security for your financial future. An individual disability income insurance policy you purchase on your own is fully portable, meaning you won’t have to worry about losing coverage if you change jobs, and the benefits paid are tax free if you are the premium payor.1. In addition, an individual disability income insurance policy is non-cancelable by the carrier (as long as the premiums are paid), and with a guaranteed renewable policy, your premiums will never change for the life of the policy. Disability income insurance policies have exclusions and limitations.
1 The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. We are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.
Disability income insurance policies have exclusions and limitations.
Individual Retirement Account (IRA)
Retirement may seem far away, but it’s never too early to determine how much you’ll need and to begin the process of saving. Making smart financial decisions now can help impact how you live in retirement. We can assist you along the way with our Individual Retirement Account (IRA) program—it’s designed to help you reach your retirement goals.
An IRA is a tax-deferred personal savings account that allows you to save for retirement without a company-sponsored plan. Throughout your lifetime, you can make tax-deductible “contributions” to your IRA, which you can then invest in basic securities such as stocks and bonds. For 2017, the annual amount you can contribute to an IRA is the lesser of 100% of earned compensation or $5,500. If you are age 50 or older (as of December 31 of the tax year to which the contribution relates), you are eligible to contribute an annual “catch-up” contribution each year of up to $1,000.
With a traditional IRA—the most common type of IRA—income taxes are deferred until you withdraw them, so you don’t pay annual federal (and, in many cases, state) income taxes on your earnings. At age 59 ½, you can make taxable withdrawals from the account called distributions for your retirement. If you choose to take distributions before you turn 59 ½ years old, the government imposes a premature distribution penalty of 10% on your withdrawal. Additionally, when you turn 70 ½ years old, you are required to take distributions by April 1 of the calendar year.
Roth IRA Account
Unlike the traditional IRA, contributions to the Roth IRA are considered “after-tax” and therefore not deductible, but you can take distributions from the Roth IRA tax-free. The maximum annual contribution to the Roth IRA for 2017 is $5,500, with an additional $1,000 “catch up” contribution allowed each year for individuals age 50 and older (as of December 31 of the tax year to which the contribution relates).
The Roth IRA became an option after the Taxpayer Relief Act of 1997, and allows for investors filing single on their taxes with an adjusted gross income in 2017 of less than $132,000 or married couples filing jointly with a combined adjusted gross income of less than $194,000 annually, to make limited, annual contributions toward retirement. There is no mandatory age at which you are required to take distributions from the Roth IRA, and there is no premature distribution penalty for amounts you withdraw from the principal.
Coverdell Education Savings Account (ESA)
The Coverdell Education Savings Account or Education IRA is a trust created exclusively for the purpose of paying qualified education expenses. You can contribute up to $2,000 per year to the account and those contributions will grow tax-free until distributed. In addition, the beneficiary will not owe tax on the distributions if they are less than a beneficiary’s qualified education expenses at an eligible institution.
Savings Incentive Match Plan for Employees (SIMPLE)
In this written salary reduction arrangement, eligible employees contribute to an IRA in their name. Your employer is required to make annual contributions for each eligible participant. This type of arrangement is available to self-employed individuals or owners of companies that have 100 or fewer employees and no qualified retirement plan. Employees are eligible for a SIMPLE-IRA if they earn at least $5,000 annually. SIMPLE-IRAs may be funded by annuities.
For 2017, the maximum employee contribution limit is the lesser of 100% of compensation or $12,000. SIMPLE IRA owners age 50 or older (as of December 31 of the tax year to which the contribution relates) may be eligible to make an annual “catch-up” contribution each year of $2,500. The money contributed to a SIMPLE IRA will accumulate tax deferred until money is withdrawn. Withdrawals are subject to ordinary income tax and, if taken before age 59 ½, a 10% federal income tax penalty may apply and this penalty is increased to 25% for distributions taken within the first two years of participation in the plan.
Life insurance can be the foundation of your financial security and can provide comfort and stability for your family. The purpose of life insurance is to help provide your loved ones with financial protection after you die, in exchange for the premiums you pay to your insurer during your lifetime. Some life insurance policies can provide you with financial protection for the short term, while others accumulate cash value, offering a living benefit that can be used for supplemental retirement income, funding for a child’s education, or cash for emergencies.1
Term Life Insurance
Term life insurance provides coverage for a set period of time at a generally lower cost than permanent insurance. Many term life insurance products allow you to convert to a permanent policy, such as whole life insurance. The cost of insuring oneself increases over time, so it’s important to understand your short- and long-term needs for financial security when you select a policy.
Permanent Life Insurance
Permanent life insurance provides you with financial protection for your entire life, as long as the policy remains in force. Because of the flexibility permanent life insurance offers, there are several types of policies you can purchase.
- Whole Life Insurance. The benefits of whole life insurance include guaranteed fixed premiums, a guaranteed death benefit and guaranteed cash value growth. This means that with whole life insurance, your premiums never increase as long as they’re paid, and you can also take advantage of “living benefits,” which enable you to borrow against the cash value of the policy for any purpose while you’re alive1. Borrowing cash from the policy can help in financing life-changing events or emergencies, and the policy’s cash value accumulates on a tax-deferred basis. One thing to keep in mind when purchasing whole life insurance is that loans reduce the death benefit of your policy, and loan interest should be repaid in order to prevent lapse.
- Universal Life Insurance. Universal life insurance provides lifetime death benefit protection along with flexibility that gives you choices as your needs and finances change. It offers options such as coverage amounts that may be increased or decreased, and premiums that you can vary based on your finances as long as there is enough money in the account to pay for the monthly insurance and administrative charges.
- Variable Universal Life Insurance. Variable universal life introduces an investment component. With variable universal life, you can allocate net premiums and account values among divisions of a separate account and guaranteed principal account. You can direct a portion of your net premium payments to any of the investment options available through the separate account depending on the particular variable universal life product. Each investment option offers a different level of risk and growth potential. One feature of variable universal life insurance (and universal life) is its premium flexibility: you can skip payments as long as your policy has accumulated enough account value to meet the monthly deductions. Also, you can add numerous riders to your policy. Riders are available for an additional premium.
**Variable life insurance policies are sold by prospectus. Before purchasing a variable life insurance policy, investors should carefully consider the investment objectives, risks, charges and expenses of the variable life insurance policy and its underlying investment choices. For this and other information, obtain the prospectuses for the variable life insurance policy and its underlying investment choices from your registered representative. Please read the prospectuses carefully before investing or sending money.
- Survivorship Life Insurance. Survivorship life insurance is a form of permanent life insurance that covers two people on one policy and pays a death benefit after both people on the policy have died. The cost for survivorship life insurance is usually lower than the cost of two individual policies.
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 (the 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 can 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.
2 Guarantees are based on the claims paying ability of the issuing company or companies.
Whether you favor an aggressive approach or a conservative one, we offer a breadth of mutual funds designed to match your investment goals.
What are Mutual Funds?
Mutual funds are professionally managed portfolios of stocks, bonds or other securities that pool the money of a group of investors who have common financial goals. The value of mutual fund shares will fluctuate so that when redeemed they may be worth more or less than their original cost.
Who needs Mutual Funds?
Mutual funds may be an appropriate option for investors at various income levels, and may help to reduce the worry of day-to-day issues such as what individual securities to buy and sell, or when to buy and sell them. They offer a level of diversity that can be hard to match as an individual investor. The increased diversification may reduce volatility.
Investing in a Mutual Fund
The types of securities a mutual fund can buy are spelled out in a detailed investment document called a prospectus. A single fund may own dozens or even hundreds of different securities. The prospectus also describes fund objectives and discloses the fund’s risks, charges, and expenses. You should read a fund’s prospectus and, if available, a summary prospectus carefully before investing.
Mutual Funds are sold by prospectus, which is available from your registered representative. Please carefully consider investment objectives, risks, charges, and expenses before investing. For this and other information about any mutual fund investment please obtain a prospectus and read it carefully before you invest.
SpecialCareSM is a program that provides access to information, from what you need to know in order to provide the best care to your loved one, to how to manage the needs of yourself and other family members. For example, you’ll learn why accepting a generous financial gift from a loving grandparent may not be in their best interest, and why disinheriting your child with special needs might be the right thing to do.
If you are caring for a person with a disability or other special need—a spouse, a child, sibling, dependent parent or other relative or friend—you should consider our SpecialCareSM program. The SpecialCareSM program, developed exclusively by Massachusetts Life Insurance Company (MassMutual), is an innovative outreach initiative that provides access to information, specialists, and financial products and services that can help improve the quality of life for people with disabilities and other special needs and their families and caregivers.
The SpecialCareSM program takes a team approach to help ensure proper life care planning for the future of a person with a disability or other special need.
A Special Care Planner1 or a MassMutual Financial Services Representative with the Chartered Special Needs Consultant® (ChSNC) designation2 can work with you and your professional advisors–your banker, accountant or financial planner, lawyer, social workers and health care providers—to review your financial picture and offer options that make sense for your situation.
By following a person-centered life care planning process, you can keep the person with a disability or other special need as the primary focus, and develop a life care plan that helps enable that person to obtain the best quality of life possible.
A life care plan is a coordinated program of social, medical, financial, and legal strategies for people with disabilities and their families. A life care plan continually changes to adapt to the needs of the individual throughout his or her life.
Financial Services Representatives. A Financial Services Representative who specializes in working with special needs will work with the person with a disability or other special need, their family members or caregiver, and their personal advisors to help you:
- Understand the social, medical, and legal needs of the person with the disability or special need;
- Review your financial picture;
- Learn about options that make sense for your situation;
- Ensure benefits such as Medicaid or Supplemental Security Income won’t inadvertently be jeopardized, and;
- Maximize finances, and help maintain the lifestyle of the individual with special needs.
Medical Professionals. Medical professionals provide informational and emotional support for the individual with special needs and/or families.
Social Workers. Social workers often act as the client advocate when working with other service professionals (e.g. schools, medical facilities, financial advisors and/or special care planners/ChSNC).
Attorneys. Attorneys provide legal services for people with disabilities and other special needs, their families or caregivers. They work closely with financial advisors and other Financial Services Representatives to develop the proper documentation for various items such as trusts.
Accountants. Accountants, working with Financial Services Representatives and other advisors, seek to understand the unique financial requirements of a person with a disability or other special needs and his or her family in order to help them properly develop a life care plan.
Family Member or Caregiver. The family member or caregiver plays a pivotal role in determining the proper care and benefits for the person with a disability by working closely with other members of the team.
Here are some external website links to provide families with further information to support loved ones with special needs.
Links to Organizations
- Academy of Special Needs Planners
- Brain Injury Association of America
- Easter Seals
- Autism Speaks
- Autism Society of America
- National Down Syndrome Congress
- National Down Syndrome Society
- National Spinal Cord Injury Association
- Paralyzed Veterans of America
- Special Needs Alliance
- United Cerebral Palsy
Links to Services
- Centers for Medicare & Medicaid Services
- Individual Education Plan (IEP)
- Office of Special Education & Rehabilitation Services (OSERS)
- Social Security Disability Benefits
Links to Educational Materials
For Family Advisors
If you have clients who are caring for a person with a disability or other special needs—a child, a spouse or a dependent parent—our SpecialCareSMprogram can help by providing access to information, specialists, and financial solutions that can help you and your client:
- find information and contacts related to health care issues,
- learn more about earning and supplementing an income,
- create a safe and accessible living environment,
- find needed special equipment,
- obtain educational assistance, and;
- enhance personal independence
Through our SpecialCareSM Program, MassMutual helps make a difference in the quality of life for people with disabilities and other special needs and their families and caregivers.
1 The Special Care Planner receives advanced training and information in estate and tax planning concepts, special needs trusts, government programs, and the emotional dynamics of working with people with disabilities and other special needs and their families. The certificate program is offered by The American College in Bryn Mawr, PA, exclusively for MassMutual Financial Services Representatives.
2 Chartered Special Needs Consultant (ChSNC®) – a professional designation awarded to those individuals who’ve completed 120 hours of academic classes in addition to holding either Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC) or Certified Financial Planner (CFP) designations and previously completing the Special Care Planner certification program. The ChSNC designation was developed by The American College in Bryn Mawr, Pennsylvania. The certification program and the professional designation evolved from MassMutual’s SpecialCareSM Program.
A trust is a fiduciary arrangement through which the trustee manages assets for the benefit of third parties. A trust is commonly used to transfer wealth to heirs or to favored charitable organizations. Insurance products, such as life insurance policies, annuity contracts and disability policies, may be used to fund trusts in appropriate circumstances.
Trusts are very flexible and may be drafted to meet the specific intent of the individuals creating the trust and customized to meet the specific needs of trust beneficiaries. You can use trusts as a key element in a comprehensive estate and wealth transfer plan, or to otherwise direct how your legacy will be managed and distributed after your death.
Advanced estate planning and trust services require specific knowledge typically not provided by many financial advisors. Using trust services means collaborating with a third party that has your best interests in mind while the trust is set up through an attorney. Trust services include:
- Investment management & prudent diversification of account assets;
- Periodic statements, annual tax reporting and investment reporting; cash management, safe custody and prompt distribution of assets;
- Processing of capital changes such as stock dividends, splits, exchanges and tenders;
- Bill paying, automated deposits and disbursements (ACH and wire);
- Income collection and allocation
Traditionally, advisors had to refer clients to other providers. The person appointed as your trustee should have the knowledge and capability necessary to administer sometimes complex arrangements and to meet the fiduciary duties and responsibilities that are imposed under trust law. If properly drafted by an attorney and administered by the trustee, a trust can ensure that trust assets are managed and distributed after your death as you had desired.