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Crucial Financial Concept for People Who Are or Have Been Married – 1 Chance to Get it Right!

Loss of Pension/Social Security Income Could Have Been Avoided…
by Adam Goodman, Life Insurance & Tax Free Retirement Expert
Financial Educator & Service Provider

Several times this past month a situation came up. I am going to share the concept with you so that if you or someone you care about finds themselves in a similar situation they will know how to handle it properly, and that they don’t find themselves in a bad situation financially in their 70’s, 80’s or beyond…

We often only get one chance to get it right, and what we don’t know can hurt us…

It relates to pension income in a divorce situation. It is similar to pension maximization, which is a concept that relates to maximizing pension income for married couples and optimizing the financial situation for the surviving spouse. If you have questions about it contact us for complete details.

Here is the situation…Couple gets divorced, one of them has a pension and as part of the divorce agreement, non pension spouse gets 50% of the pension and/or higher spousal social security benefit…

Here is the MILLION DOLLAR question…

How long does the receiving spouse want the pension/social security income to last???

The answer: For the rest of their lives….

The reality: The income will last as long as the individual with the pension/social security benefit is living…

Example: 65 Year Old Male and 57 Year Old Female, they divorce, and she gets 50% of his pension…Call her portion $1500 a month…She is counting on that payment, combined with her social security, and her supplemental savings as her financial foundation for her retirement/golden years…Fast forward 7 years, she is 64 about ready to retire, and he passes away…Without a pension protection plan in place her $1500 monthly payment stops too….

Solution: As part of the divorce agreement she purchases a life insurance policy on her soon to be ex husband, she owns it and when he passes away, the $1500 monthly pension income will stop, yet there is an income tax free death benefit that she can use to replace that lost income.

In these situations relations can be cordial or not at all, it is best to get the insurance in place as part of the divorce agreement. A life insurance policy can not be put in place without the consent of the insured, which in a contested or non amicable situation might be withheld….

Don’t let yourself or someone you care about get caught in this type of situation.

For help putting the Life Insurance plan in place and determining the right type, amount, and duration please visit our website or give us a call at (702)-483-SAFE (7233).

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