HighPointe Financial Group: Life Advice for Women
Q: If I am a stay-at-home mom, do I need life insurance?
A: The simple answer is yes. Although you may not earn income outside of the home, what you do on a daily basis has an important economic value for your family. Should you pass away, the tasks you handle daily may need to be outsourced, such as childcare, cleaning, laundry, home maintenance, etc. While you probably do not need as much death benefit protection as your partner, it is important you have some insurance to help cover the cost of these tasks, especially while your children are young and still at home. However, ultimately, the decision to purchase life insurance should be based on long-term financial goals and the need for death benefit.
Q: My work sponsored plan allows me to make pre-tax and Roth contributions. Which is better?
A: Generally, people who are young and still believe they will see increases in their income may be better served contributing to a Roth IRA. Contributions go in on an after-tax basis, but when the employee retires, he or she can remove those contributions and all gains tax free. Those who are more established in their careers, have less time until retirement and have hit the top end of their earning potential may find more favorable results when contributing on a pre-tax basis. When contributions are made, a tax deduction is taken, reducing that person’s taxable income and overall tax liability. When the money is withdrawn from the account at retirement, ordinary income tax is paid on the contributions and gain. For those earning more now than they plan on spending annually in retirement, a pre-tax approach may be a better fit. ■
Written by: Katie Bennett
Contact Katie at kbennett@financialguide.com or 913-234-0300. Katie Bennett is a registered representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC (www.SIPC.org). Supervised from 10975 Benson Drive, Ste. 350, Overland Park, KS 66210 913-234-0300. Local firms are sales offices of Massachusetts Mutual Life Insurance Company (MassMutual), and are not subsidiaries of MassMutual or its affiliated companies. Any discussion of taxes is for general information purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate. CRN202108-251555.
