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HOW FAST SHOULD YOUR BUSINESS GROW?

Many companies operate under the assumption that there is no limit to growth, as long as sales can increase. Growth, however, can easily outstrip a company’s financial resources. The key is to determine an “affordable growth rate.”

To accomplish this, the affordable growth rate (AGR) formula can be used. This formula assumes that: (1) sales can increase only as quickly as assets; and (2) debt will grow at the same rate as equity.

Based on these assumptions, AGR indicates the financial performance necessary to support expected sales growth. The formula also identifies how fast the company can grow without changing its debt structure. Thus, it is an effective planning and budgeting tool.

To determine the AGR, multiply retained earnings by the annual percentage increase in the “stockholders’ equity” figure on the balance sheet. For example, a company retains 80% of earnings (distributing the rest as dividends), and achieves a 30% return on stockholder equity. In this case, the AGR is equal to 24% (.80 x .30). This means that by maintaining a 24% growth rate, the company can also maintain a constant debt-to-equity ratio. A faster growth rate would force the company to either increase the ratio or sell more stock.

Certainly, it is important for all business owners to plan the growth of their company. By using the AGR formula, the necessary cash flow to pay current expenses can be maintained.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. BPGA0UU-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-155134

WHERE THERE’S A PLAN, THERE’S A CONTINUED BUSINESS

The idea that someday, someone else will be running your business may be a difficult one to consider. However, because death is a fact of life, it is important to face the inevitable. Therefore, if you wish your business to continue—and thrive—after you are gone, consider taking the time now to create a business succession plan.

A business succession plan is far more than a legal document designed to pass your possessions on to beneficiaries upon your death. It is a comprehensive estate planning tool that can include everything from shareholder buy-sell agreements to management plans, as well as any other documentation relevant to the smooth operation of your business. Whereas traditional estate plans are usually designed to lessen potential tax burdens, the business succession plan may include such considerations, but is aimed primarily at maintaining the overall health of your business.

Protection for Your Family and Your Executors
Proprietorships and partnerships must cease operation upon the death of an owner or partner. If a family member or executor attempts to carry on your business—without the proper granted authority—he or she can be held personally liable for all debts and any decline in value of the business, while your heirs are entitled to all profits of the business.

The business succession plan can clearly state the future financial options of your business: Who has the authority to continue its operation? Will it be sold, liquidated, or continued? Who are potential buyers and do they have the cash to accomplish the purchase in a timely fashion?

For sole proprietors the business ends, and the business assets and liabilities become the assets and liabilities of the estate. If a sole proprietor does not want to change the form of business ownership, but does want to retain the business, the planning concerns involving the administration of the business during the estate settlement period, and the continuation of the business after the estate has been settled, need to be addressed. The proprietor’s will must give the executor certain powers during the period of estate administration such as: 1) the power to retain the business interest indefinitely; 2) the power to do everything possible to operate the business successfully; 3) the power to re-organize the business, incorporate it, or merge it with another business; and 4) the power to borrow money, if necessary, to help the estate meet its need for liquidity.

The Status of Your Spouse and Employees
In all cases, your spouse should be informed of decisions regarding the disposition of your business. In the case of employees, specific details and confidential information need not be disclosed, but the fact that arrangements have been made to help safeguard their welfare can be communicated through a meeting or memo.

How to Begin
An estate planning team consisting of your attorney, accountant, and qualified financial professional can help you devise a business succession plan, including all the necessary documents and required information. There are established methods for a transition that will leave both your business and any successor management free from unnecessary worry.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. BOEG044-04

The information provided 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 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.

CRN201412-155139

ASSESSING THE NEEDS OF AN AGING PARENT

Planning for the future needs of aging parents can often be a sensitive and delicate task for adult children to undertake. Baby Boomers who must balance the needs of their own children with concerns about their parents’ well-being, have become known as members of the “sandwich generation,” as they struggle to provide multigenerational care and support. The amount of stress that comes with stretching oneself too thin is supported by today’s culture, which often seems to revere the notion of “superman” and “superwoman.” However, providing care for aging parents does not have to be a task that you face alone.

Although the topic may be difficult to broach, many are surprised to discover that talking with parents about their needs often opens doors of communication and strengthens familial bonds. One way to do this is through an assessment—which takes a thorough look at one’s physical, mental, environmental, social, and financial situation—to discover areas of concern and help ensure that risks are lessened, and that independence is maintained for as long as possible. You can perform an assessment by yourself, or enlist the aid of a professional who can help provide solutions for any situations that might arise. Following is a list of some issues you may want to cover.

Health
• Do your parents suffer from any chronic diseases or illnesses?
• Do they experience incontinence, weight fluctuations, bone fractures, unsteadiness, dental problems, or other irregularities?
• Can you provide a list of doctors and other medical professionals your parents visit?

Psychological
• Have they ever been diagnosed with any of the following conditions: depression, anxiety, Alzheimer’s disease, or dementia?
• Do they show signs of mood swings, forgetfulness, confusion, or depression?
• Do they appear to have a decreased interest in things that once captivated them, such as friendships or recreational activities?

Prescriptions
• Do you have a list of your parents’ medications and dosage amounts?
• Do they take their medicines as directed?

Lifestyle
• With what level of ease do your parents move about the house? Do they need walkers, canes, or other special devices, such as bathroom grab bars?
• How many of the following activities can they perform on their own: bathing, dressing, communicating by telephone, walking, climbing stairs, cooking, cleaning, and driving?
• If your parents have pets, are they able to give them the level of care they require?

Safety Issues
• Is their living environment secure, and does their home contain safety features such as smoke alarms, grab bars, and non-slip flooring?
• Can they perform the necessary maintenance on their home and yard?
• Do they know how to protect themselves from predatory scams and fraud?

Social
• Is the contact information of friends and family members easily accessible?
• Do they interact with friends or have social contact on a regular basis?
• Are they close to family members whom they see often?

Hygiene
• Has their level of personal hygiene remained the same?
• Do they need help with routine tasks such as washing, shaving, or hair and teeth brushing?
• Are clothes appropriate and clean?

Money
• Are your parents able to pay their bills and maintain good financial health?
• Do they have, and can they locate, legal documents such as wills, powers of attorney, etc.?
• Do you know where to find important information about insurance and financial accounts?

You may wish to expand upon this partial list, or speak with a qualified professional about areas of particular concern. In many cases, a parent may require more assistance in one area than another.

Boomers who are struggling to meet the demands of older and younger generations may find that outside help is necessary. In many situations, assistance has a price tag. Proper planning can help smooth the necessary transitions, both financially and emotionally. For many families, long-term care insurance can provide a measure of support. Preparing today can help you provide for your family’s needs tomorrow.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. LTCASSAP-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-155175

ASSET PROTECTION AT A GLANCE

Many people focus their efforts on increasing their financial resources, yet they may give relatively little attention to protecting those assets once they are accumulated. However, without the proper legal protection, the financial security you have worked long and hard to build could easily be threatened by an unexpected lawsuit.

In today’s litigious society it is not only the wealthy who should be concerned. Even individuals of moderate means, who have home equity, savings, or retirement accounts could be at risk. Business owners and professionals, such as doctors, dentists, lawyers, and accountants may be especially vulnerable to claims from customers/patients/clients, suppliers, employees, and lenders.

Lawsuits can be expensive and time-consuming to defend. Even if you think you are in the right, you may be forced to settle, because it may be more costly to fight a lawsuit than to pay a settlement. Also, regardless of whether you win or lose, you must generally pay for the costs of your own defense. However, with proper advance planning, there are some relatively simple and inexpensive ways to help protect your assets from the threat of litigation.

Life Insurance
In many states, life insurance death benefits and cash values are exempt (in whole or in part) from the claims of creditors of the insured. However, the exemption for life insurance cash values may depend on the ability to prove that there is no attempt to defraud a creditor.

Qualified Retirement Plans
You may also want to consider maximizing your contribution to your qualified retirement plan. In order to be tax qualified in the eyes of the Internal Revenue Service (IRS), qualified plan assets may not be assigned. The United States Supreme Court has interpreted this to mean that account balances in a qualified plan are generally protected in bankruptcy situations. In non-bankruptcy situations, state laws govern whether assets in a qualified plan are protected from the claims of creditors.

Primary Residence
Life insurance policies and qualified plans aren’t the only ways to protect assets. Most states provide some kind of asset protection for a primary residence. The key may lie in how the residence is titled. One form of titling, called “tenants by the entirety,” is often necessary to insulate home equity against the claims of creditors.

Trust Funds
In some cases, a “spendthrift” clause in a trust will prevent creditors from attacking trust fund assets. However, this protection almost never applies in the case of so-called “self-settledtrusts. In other words, you cannot typically set up a trust for your own advantage, unless you cede all control and benefits. It may, however, be possible to establish such a trust to benefit selected family members.

The Bottom Line
When planning your estate, it is important to give thought not only to building wealth, but also to protecting your assets from the threat of lawsuits and the potential claims of creditors. Some relatively simple and inexpensive strategies may exist to achieve this end. However, it is important to bear in mind that asset protection planning is a complex topic and may require the assistance of qualified legal and tax professionals.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFGASSE4-04

The information provided 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 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.

Insurance issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201412-155148

EVALUATING YOUR GROSS ESTATE

One of the first steps in determining your federal estate tax liability is determining what assets and property are considered part of your estate. From this starting point, it will be easier to project future estate growth and develop the appropriate strategies for meeting your ultimate goals.

Treasury regulations relating to the taxation of property owned at death contain a catch-all definition that the “gross estate of a decedent who was a citizen or resident of the United States at the time of his death includes the value of all property, whether real or personal, tangible or intangible, and wherever situated, beneficially owned by the decedent at the time of his death.”

Taking Stock
Among those often overlooked items that are includable in your estate are your rights to future income, such as your right to payments under a deferred compensation agreement or partnership income continuation plan. Likewise, your interests in any business you own at your death are includable in your gross estate. In addition, your personal property, investments, real estate, retirement plans, and proceeds of life insurance policies that you own are also included. The value of Social Security survivor benefits, either lump sum or monthly annuity, are not included in your gross estate.

The actual task of determining what is includable in your gross estate can require some in-depth analysis. Your estate should be re-evaluated each year so your beneficiaries and heirs will be spared from facing agonizing decisions over your wishes and federal estate tax requirements. In addition, the use of certain estate planning documents, coupled with any necessary adjustments to property ownership, has the potential to minimize estate taxes and maximize any estate tax credits.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. EPXC104-04

The information provided 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 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.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201412-155151

FAMILY MATTERS: LENDING TO YOUR CHILDREN

Have you ever considered lending money to your child for a down payment on a new home, to bankroll a business venture, or for some other large expense? Many adult children seek financial assistance from their parents if they encounter difficulty securing a bank loan due to lack of a credit history or collateral. For their part, many parents want to help their children succeed in life and are willing to give them a financial boost if they have the means. Though most parent-child loans do not go awry, if a loan does sour it can have serious consequences for unsuspecting parents. Here are four pointers to heed before lending funds to your child:

1. Document the Loan. If you expect the money to be repaid, consider treating the loan as seriously as a banker would by requiring the proper documentation. If you seal the deal with a handshake, and the business later fails, you must be able to convince the Internal Revenue Service (IRS) you made a bona fide loan in order to deduct it as a bad debt. To give yourself a sound basis for a tax write-off, request the following:

– a note and written loan agreement
– collateral or other form of security
– a repayment schedule and repayment records
– a plan indicating the loan will be repaid as scheduled
– proof the business was solvent when the loan was made, if applicable

Proper documentation can also help you avoid other complications. For instance, if your child were to divorce, a written loan agreement identifying who is responsible for repayment, and on what terms, could prevent a former spouse from refusing responsibility for the debt or claiming the money was a gift. It could also keep an ex-spouse from obtaining—through the division of marital assets—a controlling interest in a company you funded.

2. Know the Rules. The IRS allows you to deduct bad debts only after you have tried to collect them, by legal means, if necessary. So if you want to write off the loan, you must be prepared to take legal action to collect it.

If, after taking legal action, you’re still unable to collect the loan, you may write it off as a short-term capital loss by subtracting the outstanding loan balance from your total short- and long-term capital gain for the year. If the loss exceeds your total capital gain, you may deduct it in $3,000 increments each year until it is entirely written off.

3. Treat the Bad Debt as a Gift. Instead of a lawsuit, you may have the alternative of treating the bad debt as a gift. In 2013, the IRS allows each taxpayer to give up to $14,000 per person per year free of gift taxes. Thus, both parents together could offset an uncollectable debt with a combined gift of up to $28,000 per year with no tax consequences. (Any amount exceeding this limit may be subject to gift taxes.)

4. Use Common Sense. Lending money to a child may have certain tax consequences for you, and it’s important to be prepared. Consider the odds of a successful follow-through on your child’s part. Think twice before lending money for a risky venture unless you are willing to part with it as a gift with possible tax consequences, if need be.

Supporting a child’s dream can be an exciting and rewarding experience for a parent. However, pay attention to potential tax traps and legal pitfalls before opening your checkbook and seek professional advice.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFOBLEN2-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001.

CRN201412-155531

SHIELDING YOUR INSURANCE FROM ESTATE TAXES

Life insurance can help provide for your heirs, and act as an important estate planning tool. It can offer protection to loved ones when they need it most, and help ensure financial obligations will be fulfilled. One thing that many people do not realize is that life insurance can add a significant amount of wealth to their overall estates, and can possibly cause assets to surpass the applicable exclusion amount ($5.25 million in 2013), the amount that can be sheltered from estate taxes. However, with proper guidance, it is possible to keep your life insurance policy proceeds out of your estate, as well as provide immediate funding for short-term financial needs.

You may already know that life insurance policy benefits are contingent upon incidents of ownership. In general, an incident of ownership is the right to exercise control over the policy, or to receive an economic benefit from the policy. When planning estate conservation, it is important to know that policy proceeds cannot be shielded from estate taxation if you have held any incidents of ownership in the policy during the three-year period preceding your death.

Incidents of ownership in life insurance include any powers to surrender the policy, to pledge the policy as collateral, or to assign the policy and any reversionary interest equal to 5% or more of the value of the policy before death. Incidents of ownership also applies to any power to act as a fiduciary of a trust that holds insurance on your life if you established the trust, you transferred the policy or consideration for the policy to the trust, or if you can exercise any fiduciary power over the trust for your own benefit. However, your estate will not include your life insurance proceeds merely because you initiated its purchase or paid its premiums within three years prior to your death.

Entire policy benefits will be included in your estate unless all incidents of ownership are transferred more than three years before your death. In practice, application of this rule is not always clear. In some circumstances, life insurance policy proceeds may be included in an insured’s taxable estate even though the insured was never named as the policy owner.

Steps You Can Take
For new life insurance policies, proceeds are not included in the estate of the insured when another person (often an adult child or an irrevocable trust created by the insured) is the initial applicant and owner of the policy, and when the insured never possesses an incident of ownership in the policy.

If you want to keep life insurance proceeds out of your estate on existing policies, you will need to transfer any incidents of ownership in the policy to another person at least three years before your death. In addition, you must make sure that your estate is not the beneficiary of the policy, and that the policy beneficiary is not required to use policy proceeds to pay estate claims and expenses.

A Plan of Action
The above guidelines can help you develop a plan of action for keeping your life insurance proceeds out of your estate. However, before you take any action that might affect your policies, consider all of the alternatives, and seek professional counsel on how to best achieve your specific objectives.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. EPLA012-04

The information provided 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 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.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act of 2010) extends the “sunset” provision contained in The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which was to repeal the EGTRRA tax law changes on December 31, 2010, to December 31, 2012. Unless there is future legislation, the tax laws affected by the provision of the Tax Relief Act of 2010 will revert on January 1, 2013 to their status prior to EGTRRA; this affects income tax rates and deductions as well as gift, estate and generation-skipping transfer tax rates and exemptions.

CRN201412-155167

THE ABCS OF ESTATE PLANNING

Many people share the common misconception that estate planning is something only very affluent individuals should do before they die. However, estate planning is important, even for those individuals of modest means. Planning for the disposition of one’s assets upon death can offer significant benefits to all parties involved.

The greatest benefit may lie in knowing that your wishes will be respected. Naming your heirs—and relieving them of unnecessary costs and stress by carefully designating which assets they will receive—is preferable to having a court make such decisions for you.

The estate planning process not only includes designating your heirs, but it may also include establishing vehicles—such as trusts—to help protect your assets. This will help ensure your assets go to the people you care about, and can help minimize taxes. In the event of mental or physical incapacity, an estate plan can designate people to help care for you and your property through a durable power of attorney and a health care proxy. You may also want to include a living will among your estate planning documents, so your health care providers know your wishes regarding the possible use of life-sustaining measures in dire situations.

Put It in Writing
A will is the basis of any estate plan, whether it is simple or complicated. In drawing up your will, consider using the services of a qualified attorney. Although you may think you can do it yourself, an estate planning professional has the experience to ask questions you may not have considered. For instance, would your elderly parents be able to manage an inheritance if they were to survive you? Would you want your children’s spouses included in your estate? If your estate were affected by a divorce or the death of a child, how would you want those situations to affect the distribution of your assets?

Name Names
The first name to settle on is that of your executor. Next will be the beneficiary(ies) of your insurance policies. Beneficiaries, and contingent beneficiaries, of assets in retirement accounts, such as pensions, 401(k) plans, and Individual Retirement Accounts (IRAs), are kept on record with the retirement plan administrator, and these nominations take precedence over your will. Retirement assets pass directly to the beneficiaries, bypassing probate court. If the estate of the deceased is named as the beneficiary of an insurance policy, the policy’s proceeds are included in the probate estate.

What about Estate Taxes?
Assets transferred to a spouse will not be subject to estate taxes, regardless of value. However, transfers to other beneficiaries, such as children, may be subject to estate tax if they are in excess of the applicable exclusion amount ($5.25 million in 2013).

Certain advanced planning tools can be used to fund the payment of estate taxes, such as life insurance and trusts. For high value estates, a gifting program is often used to reduce the value of the estate, thereby minimizing taxes. For specific guidance, consult your qualified tax and legal professionals.

Regardless of your net worth, there are a number of reasons why you should consider an estate plan. Take steps now to help ensure your wishes will be followed and that provisions will be made for your dependents and loved ones.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. EPGBAS02-04

The information provided 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 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.

CRN201412-155166

A LOOK AT MEDICAID

For an increasing number of families, long-term care planning is becoming a topic discussed with an unfortunate frequency. When a once-healthy and vibrant person needs full-time care—either suddenly or through the ravages of a progressive illness—staggering pressures can bear down on that person, his or her immediate family, and close friends.

One of the first and most natural questions is that of cost: Where will the money come from to allow the loved one to receive the care he or she needs? Lifetime savings can be depleted in a relatively short period of time without proper planning.

At some point, the discussion of funding care will no doubt turn to Medicaid, a difficult topic to deliberate when combined with the stress of caring for a loved one and a topic many otherwise well-informed individuals misunderstand.

What Is Medicaid?

Medicaid is essentially a state and federally funded program that is administered by both levels of the government. First and foremost, it is an entitlement program, differing from Medicare in that it is a needs-based welfare program. Eligibility for Medicaid is said to be both “categorical” and financial. In other words, eligibility first depends on a person being over age 65 or having a physical or mental incapacity that causes them to need care. Financial criteria based on both income and assets are then assessed.

What Are “Countable” Assets?

While dollar amounts may vary somewhat between states, individuals typically may have no more than $2,000 of “countable” assets and a low maximum monthly income that varies depending on the state in which the individual resides. The asset test causes the most confusion; all assets are countable unless specifically exempt. This includes savings and all real estate other than a personal residence.

The shocking news for many couples is that their joint resources are considered together in determining whether one spouse meets the Medicaid resource limits. The excess above these limits must be spent down in order for the individual to qualify for Medicaid.

As one might expect, a number of techniques have been devised that can help protect assets from having to be “spent down” to pay for care. These may include the use of a gifting program and a “Medicaid trust,” the conversion of assets to income, and increasing the level of exempt assets. Caution is the watchword; misuse of any of these techniques can make a difficult situation even worse.

One option is to have planned ahead for the possibility of needing long-term care, either in a nursing home or at home, by obtaining insurance that will help protect you or your loved ones. Professional assistance with planning is a necessity, according to your personal needs.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. LTCMED00-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201412-153819

COBRA: CONTINUING HEALTH CARE COVERAGE

Health care costs continue to rise. According to the Kaiser Family Foundation Health Research and Educational Trust’s annual survey for 2012, health insurance for single coverage went up by 3%, and by 4% for family coverage. In 2012, the average employer-provided health insurance benefit for single coverage cost $5,615 and $15,745 for family coverage. Since 2002, average premiums for family coverage have increased 97%—outpacing workers’ wages and inflation.

Group health insurance through an employer is typically less expensive than individual coverage. In the event your employment ceases, could you cover these costs out-of-pocket, and for how long? By law, you may be guaranteed continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), but you will have to assume the cost of coverage.

COBRA applies to employers with more than 20 employees (except churches, the Federal government, and the District of Columbia). This legislation requires an employer who maintains a group health insurance plan to provide employees with an option to remain covered by the employer’s plan for a specified period of time, if the employees or their family members lose coverage upon the occurrence of certain events (such as reduced or terminated employment).

However, it’s important to note that COBRA provides for continued coverage under the employer’s existing plan, not a new form of coverage. Thus, employees who previously did not elect coverage either for themselves, their spouses, or their dependents may not elect continuation coverage that is broader in scope than the coverage they were provided during their employment.

Who Is Covered?
To qualify for continuation coverage as a “covered employee,” an employee must be a participant in his or her employer’s group health insurance plan. An employee’s spouse or dependent children will be covered as “qualified beneficiaries” if they were covered by the plan at the time of the COBRA qualifying event.

If continuation coverage is elected, the employer may charge the employee or beneficiary up to 102% of the employer’s health insurance premium during the continuation period. The extra 2% is intended to reimburse the employer for administrative costs associated with providing continuation coverage.

What Is the Coverage Period?
COBRA provides that the period of continuation coverage is based on two classes of qualifying beneficiaries. For widows/widowers, divorced spouses, spouses of Medicare-eligible employees, and dependent children who become ineligible for coverage (by virtue of age or dependent eligibility requirements), continuation coverage must be provided for at least 36 months.

Terminated employees and employees who lose coverage because of reduced hours are eligible for only 18 months of coverage. If a qualified person wants to receive continuation coverage, he or she must elect to do so within a 60-day election period. If elected, coverage must be provided during the 60-day period beginning on the date coverage would otherwise have lapsed. If a plan participant waives his or her right to elect continuation coverage during the 60-day period, the waiver may be revoked at any time up to the end of the 60-day period. The employer is not required, however, to provide retroactive coverage in this situation.

The continuation coverage under COBRA is a valuable component of an employee benefits package. With health care costs continuing to rise, having the option of continued coverage can be invaluable. As you take steps to build financial security, make sure you plan for the unexpected. Setting aside a cash reserve equal to three to six months of your income can help you prepare for sudden, significant expenses, such as the responsibility of paying for your own health insurance.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. INHCOBRA-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-155178

DISABILITY INCOME INSURANCE: SOME FEATURES SAY IT ALL

Prospective insurance buyers are often confused about disability income insurance because the features and benefits vary widely from one policy to another. Essentially, there are a few key elements that could make a big difference when you make your choice. If you are in the market for disability income insurance, here are some of the things you should consider:

Definition of “Total Disability.” Does the policy define total disability as a condition during which you cannot perform the main or substantial duties of your “own occupation” or “any occupation”? A policy that refers to your “own occupation” generally pays benefits if you cannot return to work in your own field. A policy that refers to “any occupation” generally would pay benefits only if you were unable to perform any job, either your own, a lower paying job, or a job in a new occupation.

Duration of Benefits. Even if you have to choose a smaller benefit amount to keep the premiums affordable, look for coverage that protects you until age 65. Note: There are policies available that offer benefits only for a limited period, for example, a maximum of two or five years, and the nature of your occupation may affect the duration of coverage.

Amount of Coverage. Most plans set a limit on the percentage of income you can insure-usually 50% to 60% of your total gross earnings. If you have an employer-provided plan that offers only limited group coverage, you may consider buying supplemental, individual disability income coverage.

Elimination Period. The waiting or “elimination” period is the amount of time you must wait before disability benefits can start. Remember, shorter waiting periods involve higher premiums and vice versa. In addition, the waiting period is determined when a policy is issued, not when disability commences.

Taxation of Benefits. Benefits may be tax free if you pay the premiums using after-tax dollars. Benefits under most employer-provided plans are taxable because they are usually paid with pre-tax dollars (although it may be wise to verify this with your tax professional).

Partial or “Residual” Coverage. After a serious disability, many people are able to return to work only on a part-time basis. Partial or “residual” benefits allow you to receive partial disability benefits, as well as your part-time income, until you fully recover. Without this feature, your benefits may stop as soon as you return to work.

Portable Coverage. Policies that allow you to carry your coverage from one job to another have an obvious advantage. Coverage from a professional association could be one such example of portable coverage that is not tied to your place of employment, not to mention any individual disability income policy that you might buy on your own.

Of course, prior to shopping for a policy that best suits you, it is important to determine the right amount of coverage you need in light of what coverage you may or may not already have. Therefore, make it a point to review your insurance coverage and needs on a regular basis in order to ensure you are adequately protected.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. INDBENS-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.

CRN201412-155176

FINANCIAL STRATEGIES AND DIVORCE—A HOUSE DIVIDED?

Divorce ranks as one of the most stressful of life’s events. Because it often involves change in every conceivable area of life, it usually requires a fundamental re-examination of life goals and expectations.

Once divorce has moved from a possibility to a reality, it is essential that you learn how to protect your legal rights. From a financial perspective, divorce involves three things: division of marital property, child support, and alimony. Understanding the divorce process will help position you to have the law work to your advantage on all three fronts.

While by no means a complete list, the following steps should help you anticipate what might lie ahead:

Consult an Attorney. As soon as divorce has become a possibility, learn your legal rights. An initial consultation does not obligate you to file for divorce; it lets you preview the proceedings and can help re-affirm your personal sense of control. You may want to explore the pros and cons of both litigation and mediation as methods to settle property and custody arrangements.

Draft a Chronology. Start detailing the details of your marriage. Dates are important, including the date of your marriage and date of separation, as well as the birth dates of your children.

Inventory Everything. Compile a complete list of what you own and what you owe. Gathering recent tax returns, insurance policies, retirement plan documents, and financial statements should help you organize a comprehensive financial picture. Begin thinking about which possessions you would like to keep and which you wouldn’t mind relinquishing.

Determine Your Cash Flow Needs. Analyze your current expenses, while married, and try to estimate their cost once you are on your own. This information will help you prepare a cash flow statement that will become the basis for negotiating your financial support needs. Remember to consider potential new expenses, such as counseling or childcare. Also evaluate your future insurance needs.

Explore Your Career Options. Whether you have been working full-time, part-time, or not at all, now may be a good time to assess your career options. If you have put your own career on hold for the sake of your spouse’s career or your family, you might consider seeking additional support for any training needed to resume your career. Clearly, your financial situation will determine if you are going to further your education or possibly work a second job. Keep in mind that a crisis, such as a divorce, can be a great motivator toward planning and achieving a more satisfying future.

The emotional shock of divorce may tempt you to place all of the responsibility for the details on your attorney. However, you should keep in mind that once the divorce is final, you, not your attorney, will have to live with the consequences. Active participation may be the best way to help achieve an outcome that protects your interests and meets your needs.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. MISDIVOR-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201412-153821

ISSUES FACING GROWING FAMILIES

Jeff and Melissa, who are both in their late twenties, have been married for five years. Jeff is a sales representative for a biotechnology company, and Melissa works as an ophthalmic assistant at a local eye clinic. During the early years of their marriage, they enjoyed a lifestyle supported by two incomes. Without children, they were able to be somewhat carefree about their spending. Now, however, they are contemplating having children and are raising questions about the financial implications of enlarging their family.

Discussions with family and friends have led them to the conclusion that uncertainty may be the defining characteristic of their generation. Jeff and Melissa are facing a new reality: financial uncertainty not faced by previous generations. With a decline in the popularity of traditional pension plans and the future of Social Security in question, individuals may be increasingly responsible for their financial well being. In the future, company retirement plans and government sponsored social programs may offer less support to today’s workers than these resources offered past generations.

Here are some of the issues that now concern the couple as they look to the future:

– With their college days not too far behind them, they know their parents made sacrifices to send them to good schools. How difficult will it be for them to save for a child’s education? What about saving for more than one child?

– If Melissa intends to devote most of her time to being with the children, how would she manage financially if Jeff, who would then be the primary means of support in the family, were to die unexpectedly?

– They both participate in 401(k) plans at work, but will they be able to save enough for a comfortable retirement? What about Social Security? Will the system change significantly?

Since most young couples have not had enough time to accumulate a lot of money, life insurance can help provide an instant estate, thereby assuring money will be available in the case of an untimely event (such as an early death). Depending on specific needs to be met, such an instant estate could provide annual income for the surviving spouse, money to help pay the mortgage on a house, and funds to help pay for a child’s education.

Jeff and Melissa hope to arrive at a realistic assessment of what they should and should not do financially, what they can and cannot afford, and what sacrifices they might need to make to assure financial security for both today and tomorrow. They know their spending choices will have to be made carefully, and that preparing for a bright financial future will require setting goals now.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFGEMFM1-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201505-171860

IT’S TIME TO CONDUCT AN INVENTORY

Try closing your eyes and listing your living room furnishings or the contents of your jewelry box. If you have trouble coming up with a complete tally, imagine how hard it would be after the stress of a fire or burglary.

Making a written inventory of your household valuables can be one of the best money-saving steps you can take. Property insurers are less likely to question claims based on such inventories, particularly if you submit photos, receipts, CDs/DVDs, or an appraiser’s statement for valuable items. Your insurance company may even be able to give you a useful inventory form to fill out. Make sure to keep a copy of your inventory of household valuables with your insurance agent or in your safe deposit box.

For the Record
Write down the date you purchased each item of value in your home, including its price. If an appraiser has estimated the value of any of your possessions, record the estimate and the date of the appraisal, making sure the appraisal is precise and explicit.

Describe each object in as much detail as possible. Be sure to include its age, brand name, size, model number, and other relevant facts. For sterling silver tableware, note the manufacturer, pattern, and number of place settings. If your possessions are extensive and of particularly high quality, you may want to record their visual details with a video camera.

In some categories of property, such as clothing, you may wish to group together a number of articles and attach a single estimate of value. Unless you have closets filled with designer originals, there may be no reason to complicate matters by describing everything in your wardrobe.

Remember, of all the ways to record your property, the worst one is memory. If you don’t remember you own it, neither will your insurance company, so take the time today to conduct a household inventory.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFGVALU2-04

CRN201412-155528

KEEP A REALITY CHECK ON PERSONAL DEBT

Most everyone has, at some point in their lives, accumulated personal debt—some more than others. Whether debt is a cause for concern depends upon a number of factors, including: how the economy is faring; your particular earning and economic prospects for the near and long term; and the type of debt you incur. By being conscious of your spending habits, including credit card use and large purchase habits, you can better understand ways to control debt—before it starts to control you.

To gain a perspective on personal debt, it is useful to distinguish between healthy and unhealthy debt. Healthy debt refers to borrowing in order to purchase assets that are likely to appreciate in value, such as a home or business. Healthy debt is especially worthwhile to assume if you are able to itemize certain repayments (e.g., home mortgage interest) on your tax return and, as a result, qualify for certain tax deductions.

Unhealthy debt, on the other hand, refers to borrowing in order to purchase consumables or assets that are likely to depreciate in value, such as a vacation or an automobile. Unhealthy debt has taken an even more negative turn since the government stopped allowing tax deductions for most consumer debts, such as personal loans and credit cards.

Debt Management Basics
For most people, managing debt effectively is a learned skill. The following pointers may help you get your debt under control:

Categorize debts. To gain control of personal debt, you might start by developing an overall picture of your current debt situation. Debts should be categorized as healthy or unhealthy. They should then be scheduled according to whether they are short-term (e.g., credit cards), intermediate-term (e.g., auto loans), or long-term (e.g., mortgages and home equity lines of credit). The interest rate for each type of debt should be noted.

Pay off the “right” debt first. It usually makes the most sense to pay off high interest rate debt first, especially if the interest is not tax deductible (e.g., credit cards). Ideally, you should have enough in savings to pay off short-term debt, if needed. Because credit cards are typically used to purchase consumables, rather than assets that appreciate, they can easily tempt consumers to live beyond their means. Thus, it is best to develop the habit of paying off this type of debt on a monthly basis.

Avoid the minimum payment trap. Interest that accumulates by stretching out payments can make even a “bargain” costly in the long run. To understand the impact of making only minimum monthly payments, you may want to ask your credit card company how long it would take to pay off your current balance at that rate, and how much total interest you will ultimately have to pay. This information prompts many individuals to adopt a “pay-as-they-go” strategy.

Curb impulse spending. If you are prone to impulse spending, you may find it best to avoid shopping when you don’t have a specific purpose in mind. Or, you could try to delay impulse purchases for 24 hours. Once you have had a chance to “sleep on it,” you may discover the impulse has passed.

Benefits in Good Times and Bad
If you are like many people, spending may not be based solely on financial considerations. Emotional factors may sometimes cause confusion between what you think you need and what you actually do need. Still, the reality of living in the 21st century may leave you with little choice but to amass at least some debt. However, with discipline and planned spending, you can most likely manage your debt and live within your means.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFBDEBT5-04

CRN201412-155532

NEW ECONOMIC REALITIES FOR TODAY’S YOUNG COUPLES

For today’s young couples, the route to a secure future may be looking a lot different from the way it once appeared. Their income may be less certain compared to previous generations, and the demands on their financial resources are greater. In addition, rapidly evolving technology will likely require many individuals to change or reposition their careers more than once during their lifetimes. With the future of Social Security in question, and many employers no longer offering traditional defined benefit pension plans, employees must now rely heavily on their own savings to provide the bulk of their retirement income.

Meeting the Challenge of Uncertainty
What’s a young couple to do? Meet Kate and George. They’re both in their mid-twenties and have been married for two years. Kate is a computer programmer at a software company, and George is a manager at a local retail store. Before they were married, they lived in the city and enjoyed relatively financially carefree lives. Now, they own a home in the suburbs and are hoping to start a family soon.

As they begin to pursue their dreams, Kate and George are beginning to encounter the uncertainty many in their generation will face as a matter of course. Although their jobs are presently secure, many of their friends and relatives work for companies undergoing restructuring and are less certain about their job prospects. Since they’ll be depending on two incomes to support their family, how will they manage if one of them loses his or her job? And, will their desired standard of living be affected if they each ultimately undergo a number of career transitions?

The possibility of an uncertain income stream raises even more questions. Will they be able to afford the number of children they want? Once they’ve started a family, will they be able to save for their children’s education? Will they have adequate financial resources in case either of them becomes sick or disabled? And, what about their own retirement? Although they both participate in 401(k) plans at work, will they be able to save enough to retire comfortably?

A Clear-Eyed Assessment Today—A Brighter Tomorrow
Although they face a challenging future, Kate and George are getting off on the right foot by asking these questions. A realistic assessment of their goals and the economic climate they may face will allow them to develop alternative courses of action. If they start now, while they’re still young, they’ll have more flexibility in their spending choices and in determining the sacrifices they may need to make to secure both their current and long-term goals.

As Kate and George steer themselves toward a secure financial future, they’ll be in a better position to achieve their dreams by keeping their eyes wide open. By making informed financial decisions and choosing appropriate strategies today, they’ll be less likely to lose their way if they encounter personal and economic detours tomorrow.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFGEMFM3-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

Principal Underwriters: MML Distributors, LLC. (MMLD) and MML Investors Services, Members FINRA and SIPC (www.FINRA.org and www.SIPC.org) MMLD and MML Investors Services are subsidiaries of Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001.

CRN201412-155660

SECURING YOUR CHILD’S SPECIAL NEEDS

If your child has special needs, he or she depends on you for financial support. And more than likely, this support will be necessary for the rest of your child’s life. So, what can you do to help maintain your finances today, while securing your child’s financial picture for tomorrow?

Cash value life insurance can be a valuable tool for protecting both current and future costs associated with raising a child with special needs. A life insurance policy’s cash value component has the potential for tax-deferred growth during the insured’s lifetime. Over time, the cash value can accumulate into a ready source of cash to supplement financial needs in the future.* Also, from the policy’s first day forward, the insured is immediately covered by the policy’s death benefit. Thus, a child with special needs would be ensured funds to obtain proper and necessary care in the event of your untimely death.

This unique combination of benefits is achieved by linking insurance protection and savings with premiums dollars. Premium payments first pay the cost of pure insurance coverage, including the expenses and mortality factors of the insurance company; the company then invests “leftover” dollars to build the cash value of the policy. In addition to cash value buildup, some policies have periodic dividend payments (dividends are not guaranteed) that are a result of lower expenses, lower mortality rates, and higher investment results than were predicted when premiums were set.

One additional long-term benefit typically associated with permanent life insurance is predictability of expense. Premium amounts payable at policy inception will not change and will continue until the cash value of the policy equals the face amount of the policy. The point at which premium payments cease is clearly stated in the policy (typically age 65, 75, 85, or 95). The length of the payment period will, of course, affect the dollar amount of the premium payments.

Another attractive feature that comes with a permanent life insurance policy is the guarantee of insurability as long as the policy remains in force. Once the individual to be insured provides initial evidence of insurability—and as long as premium payment responsibilities are met—the insured is guaranteed coverage for life in accordance with the terms of the policy. Evidence of insurability will never be necessary again, as long as the original policy remains in force.

The final feature to consider is the value of life insurance as a “creditor,” if necessary. Funds may be borrowed against the cash value of the policy at any time.** Loan approval must come from the insurer, but it is generally fairly routine. No repayment schedule is set beyond regular payment of interest on the loan and outstanding loan balances deducted from the death benefit in the event of the death. Loans should be used sparingly and paid off in a timely fashion.

Once you have studied the options available, you need to view them in relation to your personal needs. In the case of a child with special needs, these needs are generally twofold. First, you’ll need to provide for your family and child with special needs, as well as meet other financial obligations in the event of your death. Second, you may need to have a product that will allow you to access cash values, when they are available, in a place that will help you supplement long-term financial obligation. By meeting both of these needs, cash value life insurance can help you ensure a secure today and tomorrow for your child with special needs.

* It is important to note that distributions of cash value policy will have an impact on the policy. Distributions under a 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 can reduce the policy’s cash value and death benefit, can 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.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. INLA033-04

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. 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.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201412-153828

SPECIAL NEEDS CHILDREN REQUIRE SPECIAL PLANNING

Parents of children with physical, mental, or emotional disabilities devote countless hours to caring for their special needs. Parenting a child with special needs requires that you trust many doctors, teachers, therapists, and care providers to give you and your child the best advice at the right time. You must also trust yourself to make decisions that could impact your child’s future comfort, care, and development.

Concerns about the future are very real. Where will your child live after you and your spouse are no longer alive? Who will care for your child, and where will the money come from? Fortunately, help is available with local, state, and Federal programs easing some of the monetary demands on the family. In addition, there are private groups that can help with long-term care. If you wish to provide the highest level of care, however, you will need to plan for the best possible use of your funds.

A document that may be most helpful for families needing to make provisions for a child with special needs is a special needs trust. This device would allow a trustee, typically a family member familiar with your child’s needs, to use funds placed in a trust by you, for the necessary care. It offers sufficient flexibility to handle almost any situation, while providing privacy in the details of the arrangements made by parents, grandparents, or others who wish to make a gift to a child with special needs.

While you may feel that trusts are only for the very wealthy, the financial situation of a family with special needs require prudent life care planning to prevent loss of agency funding after the parents are gone. For example, assets received as an inheritance might disqualify an adult child from receiving public funds for housing, medical care, and other government programs. Assets placed in a properly drafted trust, however, and directed to uses other than those available through government sponsorship, remain available for the individualized care a parent might wish to provide.

What Steps Should You Take?
With the guidance of a financial advisory team made up of an attorney, CPA, and other financial professionals that specialize in working with families with special needs, the first and most important step is to explore the types of third-party trusts suitable for your situation. Then, establish a trust to benefit your child with special needs.

Part of this task will be to choose a trustee. Many families choose either a trusted friend or family member, but you also want to consider some available options; you may decide to appoint three people to administer the trust. This reduces the burden on all and allows for discussion to help ensure the best care possible.

Also integral to the establishment of the trust is to change all beneficiary forms—directing proceeds of pensions, life insurance, Individual Retirement Accounts (IRAs), and other assets that you wish to commit to the future care of your special needs child—to the trust rather than to the child.

To ensure adequate funding of the trust, assess your personal insurance picture, including long-term care, catastrophic health-care, major medical, and life insurance.

Finally, keep a “Personal Needs Notebook” in which you record all aspects of your emotional and monetary support, physical care, family members, friends, and advocacy groups involved with your child.

Replacing the love and care you give to your child with special needs may be impossible, but providing for a future filled with support and competent care is within your grasp. Planning now for the time your child must go on without you can be one of the greatest gifts of love you have to give.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. EPTH083-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-155170

SURVIVING THE LOSS OF A SPOUSE

One of the most difficult experiences in a person’s life is the loss of a spouse. In addition to feeling pain from the loss of your loved one, you may also feel stress associated with needing to make many important financial decisions. In order to feel secure, you need to know that your personal finances will still run smoothly. Many serious decisions will need to be made, and they may have a lasting impact on your financial future.

The unpredictable aspect of sudden loss is that you never know how you will react to events until they actually occur. No one can ever be completely prepared to deal with personal trauma compounded by legal and financial concerns, but there are steps you can take to help you navigate through this difficult period. Finding a way to maintain structure in your life is essential, especially at a time when important supports may be disintegrating.

Picking Up the Pieces
After the initial shockwaves hit, there are matters that will require immediate attention: notification of family and friends; funeral arrangements; and contacting an attorney to review the will and handle the legal aspects of your spouse’s estate. Let your family, closest friends, and most trusted advisors help you with some of these details and short-term decisions, but proceed with caution regarding major financial decisions, such as whether to sell your home; borrow or lend money; invest; make major purchases; or make work/career changes.

During this period, you will most likely face competing demands on your financial resources. If your spouse was the primary breadwinner, it may take some time to assess your financial situation. During the first few months pay bills that need to be paid, but spend cautiously, and pay attention to cash flow and liquidity.

Rebuilding Your Life
Certain timetables (e.g., timely filing of tax returns) must be considered, and much of the financial recovery process should be orchestrated to match your emotional recovery. Some of the important aspects that will have to be addressed may include assessing the needs of dependent children, making housing decisions, determining your income needs, making decisions about insurance settlements, re-evaluating insurance needs, and managing money on your own.

Many of these decisions may flow naturally from your need (and/or desire) to participate in the workforce. Will you want to work? Will economic necessity dictate that you must work? If you are currently employed, will you stay in the same position? If you have not worked for some years, how well will your skills fit the current job market? Will you need to acquire more education or enhance your technical skills?

While professional counsel will be helpful, allow yourself to take things slowly. Your goal should be to develop a sense of command and control concerning your financial future. Align yourself with financial professionals who will have the patience to work with you at your pace—professionals who will help you gain the knowledge and confidence necessary to go it alone.

Obviously, the earlier you begin to educate yourself concerning financial matters, the better prepared you will be to withstand the impact of facing sudden loss. The quality of your life may depend on your financial skills and your willingness to take responsibility for managing your own financial affairs. With time and a little effort, things will begin to improve.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFPLONE1-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201412-155173

TEN WAYS TO STRETCH YOUR MONEY

Most people would like to have more money in their bank accounts, while working less. Although this may seem like a never-ending dilemma, there may be a solution. Think about it: The best way to stretch the money you make without working more hours is to avoid excess spending in the first place. Some people call this a budget, but you could just as easily call it a spending plan.

Here are 10 tips to help stretch your hard-earned cash in today’s challenging economic climate:

1. Create a spending plan. Many people resist the idea of a budget, and associate it with hardship. Instead, look at it in a positive way. Create a monthly “spending plan” for your fixed and discretionary (optional) expenses. When you plan your spending, you may find you spend more wisely, because you’re taking control.

2. Pay yourself first. Put savings at the top of your spending plan. If you wait until the end of the month to save any leftover cash, you may find yourself without a nest egg when you need it most. A good general rule of thumb is to save at least 10% of your income before spending the rest.

3. Track your spending. Record your expenditures for a month, especially for small optional items. You may be surprised to discover how easily purchases costing only a few dollars can add up. At the end of the month, review your expenditures and adjust your spending plan accordingly. Once you see where your money is going, you may want to make different choices about your spending.

4. Live within your means. Many people feel they never have quite enough to live on, yet they probably know people who manage successfully on less. Spending is relative. If your expenses are in line with your income, you are living within your means.

5. Shop for value. Look for opportunities to get more value from each dollar spent. Join a warehouse or shopping club and buy in bulk. Purchase clothing, furniture, and household goods when they are on sale. Consider buying used cars and appliances. Big-ticket items like these often depreciate substantially in the first one or two years.

6. Minimize debt. Keep your debt level low. By reducing debt, you also minimize interest and finance charges. When you are tempted to charge a purchase, remember that you are committing yourself to pay for it from income you have not yet earned.

7. Eat in. Restaurant dining can be expensive, since you are paying for service, as well as food. Tips and meal taxes can add 20% or more to the bill. Liquor and desserts (which you otherwise might not eat at home) can boost the tab even higher.

8. Reduce housing costs. Housing is a major fixed expense. Consider reducing this cost by buying or renting a smaller place, or one with fewer amenities. If you rent, and plan on staying in an area for more than a few years, consider buying. Owning a home is often more expensive than renting at first, but the costs are usually lower in the long run. Remember, a house is an investment that generally appreciates over time.

9. Trim transportation costs. Transportation is another large expense for most families. Many households now own more than one vehicle. The more cars you own, the higher the costs for insurance, repairs, fuel, and parking. Use public transportation, or carpool, if possible. The savings in vehicle-related expenses may offset any slight inconvenience.

10. Set aside a cash reserve. Having a cash reserve can help you stick to your spending plan and help keep you out of debt when emergencies, such as a major car repair or short-term disability, arise.

Cutting back on excess spending does not have to be difficult, nor does it mean that you must continually deny yourself many of life’s simple pleasures. You will find that, when you live within your means and pay yourself first, your debts will decrease as your savings grow. A personalized spending plan can provide that “extra” income and stretch your hard-earned cash.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFBMORE2-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-155665

A VACATION HOME—THE ULTIMATE HIDEAWAY

Are you dreaming of a mountain cabin or an ocean-front bungalow? Then you may want to know that a vacation home can offer some tax savings. If you choose to use the home solely for enjoyment or combine business and pleasure by renting the property part time, it is important to understand the tax laws for a second home.

As long as the combined debt secured by the vacation home and your principal residence does not exceed $1 million, you can deduct all of the interest paid on a mortgage used to buy a second home. This advantage is restricted to two homes. Should you purchase a third home, interest on that mortgage is not deductible. However, regardless of how many homes you have, you may be able to deduct all of the property tax paid.

One break enjoyed by homeowners—the right to immediately deduct points paid on a mortgage—applies only to a principal residence. Points paid on a loan for a second home must be deducted gradually, as the mortgage is paid off.

Personal Residence
Your vacation home is considered a personal residence even if you rent it for up to 14 days a year. In such a situation, you may retain the rent tax free without jeopardizing your mortgage interest and tax deductions. However, you may not deduct any rental-related expenses. If you rent out the house on a continual basis, things may become more complicated. Depending on the breakdown between personal and rental use, different rules apply.

If you buy primarily for pleasure but rent for 15 days or more, the rent you receive is taxable. Because the house is still considered a personal residence, you may deduct all of the interest and property tax. You may also be able to deduct other rental-related expenses, including the cost of utilities, repairs, and insurance attributable to the time the house is rented. In some cases, you may be able to deduct depreciation. When the house is considered a personal residence, rental deductions cannot exceed the amount of rental income you report. In other words, your second home cannot produce a tax loss to shelter other income. In most cases, the interest and taxes assigned to the rental use of the house, plus the operating expenses, more than offset rental income, thus limiting your ability to write off depreciation.

Rental Property
Now, consider your tax situation if you buy a property primarily as an investment and limit your personal use of the property to 14 days a year (or 10% of the number of rental days, whichever is greater). Because the house is a rental property according to the Internal Revenue Service (IRS), your deductions can exceed the amount you receive in rental income.

If your rental income does not cover the cost of renting the house, you may be able to claim a taxable loss. Rental losses are classified as passive and can be deducted only against passive income, such as another rental property that realizes a gain. If you do not have passive income to shelter, the losses have no immediate value; however, unused losses can be used in the future when you have passive income.

There’s an exception to this rule, however, that permits taxpayers with adjusted gross income (AGI) under $100,000 ($50,000 if married filing separately) to deduct up to $25,000 ($12,500 if married filing separately) of passive losses against other kinds of income, including salaries. To qualify, you must actively manage the property. The $25,000 allowance is gradually phased out for taxpayers whose AGI is between $100,000 and $150,000.

If your vacation home is considered a rental property, the mortgage interest attributable to the time the property is rented is a business deduction. The remainder cannot be deducted as home mortgage interest since the house doesn’t qualify as a personal residence.

These tax laws also apply to apartments, condominiums, mobile homes, or boats with basic living accommodations. Generally, this means the property must include a sleeping space, bathroom, and cooking facilities. If you are considering the purchase of a vacation home, keep in mind that, from a tax perspective, that mountain cabin or ocean-front bungalow may be the ultimate dream home.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. REXHOME3-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

Principal Underwriters: MML Distributors, LLC. (MMLD) and MML Investors Services, Members FINRA and SIPC (www.FINRA.org and www.SIPC.org) MMLD and MML Investors Services are subsidiaries of Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001.

CRN201412-155523

LIFE INSURANCE—HOW MUCH IS ENOUGH?

You are probably aware of the importance of having enough life insurance coverage to handle the financial contingencies that may affect your family in the event of your death. Determining the necessary amount of life insurance can be complicated. One general rule of thumb is that you should have enough coverage to equal five to ten times your annual salary. However, you should determine the “right” amount of life insurance coverage for you and your family with a careful “needs analysis” rather than using an arbitrary formula.

The needs analysis approach incorporates an evaluation of your family’s most important financial obligations and goals. This leads to planning insurance coverage to help address mortgage debt, college expenses, and future family income, as well as to provide liquidity for meeting future estate tax liabilities.

Mortgage Debt
The first point worthy of consideration is whether your life insurance proceeds will be sufficient to help pay the remaining mortgage on your home. If you are carrying a large mortgage, you may need a sizable amount. If you own a second home, that mortgage should also be factored into the formula.

College Expenses
Many people want life insurance proceeds large enough to help cover their children’s college, and possibly graduate school, expenses. The amount needed can be roughly calculated by matching the ages of your children against projected college costs adjusted for inflation. This calculation should be revised periodically as your children get closer to college age, and it may be a good idea to be as conservative as possible when estimating long-term financial goals.

Continuing Income for Your Family
The amount of income you will need to help provide for your surviving spouse and dependents will vary greatly according to your age, health, retirement plan benefits, Social Security benefits, other assets, and your spouse’s earning power. Many surviving spouses may already be employed or will find employment, but your spouse’s income alone may not be sufficient enough to cover the monthly expenses of your family’s current lifestyle. Providing a supplemental income fund can help your family maintain its standard of living.

Estate Taxes
Life insurance has long been recognized as an effective method for establishing liquidity at death to pay estate taxes and maximize asset transfers to future generations. However, this use of life insurance requires qualified legal expertise to help ensure the proper results.

Existing Resources
If your current assets and retirement plan death benefits are sufficient to cover your financial needs and obligations, you may not need additional life insurance for these purposes. However, if they are inadequate, the difference between your total assets and your total needs may be funded with life insurance.

There are many factors to consider when completing a needs analysis. In addition to the areas already mentioned, some other questions you might want to address include the following:

1. How much will Social Security provide and for how long?

2. How do you “inflation-proof” your family income, so the real purchasing power of those dollars does not decrease?

3. What is the earning potential of your surviving spouse?

4. How often should you review your needs analysis?

5. How can you use life insurance to help provide supplemental retirement income?1

6. How do you structure your estate to reduce the impact of estate taxes?

7. Which assets are liquid and which would not be reduced by a forced sale?

8. Which assets would you want your family to retain because of sentiment or future growth possibilities?

9. If your spouse remarried, how would that impact any college savings plan currently in place for your children?

As you develop an insurance strategy, remember to analyze your existing policies. Calculate the additional coverage you may need based on your family’s financial obligations and any other resources, such as retirement benefits and savings. Remember, having the proper life insurance coverage can play a major role in any family’s financial protection.

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.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. INLJ2UU-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

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.

CRN201412-155520

REGULAR REVIEWS: BUILDING YOUR FINANCIAL FOUNDATION

Today, there are many financial strategies that can help you reach your short- and long-term goals. Your financial professional can be a valuable resource as you review your financial situation, assess your progress, and make any necessary adjustments.

Most everyone has, formally or informally, a financial strategy that should be regularly reviewed. For example, you probably follow a budget, save for special goals, or look over your retirement savings from time to time. Whether paying your bills or preparing your income tax return, you are frequently looking at your finances. At least once each year, however, you should pull all your records together and take a close look at your entire financial picture.

Here’s a brief description of what a typical annual review might entail. A financial professional can assist you with this annual review.

1) Cash flow analysis. Does your income equal or exceed your fixed and variable expenses? The amount of income that exceeds what you spend is called positive cash flow. If your expenses exceed your income, you have negative cash flow. If your cash flow is negative, it may be time to reorganize your budget and minimize any unnecessary expenses so that you can focus on saving for your future.

2) Provide money for special goals. For every financial goal you establish, you need to address the projected cost, the amount of time until your goal is to be realized (time horizon), and your funding method (a scheduled savings plan, liquidating some assets, or taking a loan).

You should plan your goals according to priority. Most importantly, you should have an emergency fund of at least six months of income to handle life’s unexpected turns. Secondly, you may establish a savings plan for larger, long-term goals, such as your child’s wedding or educational expenses. Finally, consider the priority of more flexible goals (e.g., purchasing an automobile, making home renovations, and planning a vacation).

3) Enrich your retirement. Are you going to have enough money when you retire? Pensions and Social Security may provide insufficient income to maintain existing lifestyles during your retirement years. Consequently, review your retirement needs and plan a disciplined savings program for your retirement.

4) Minimize income taxes. Many taxpayers reduce their liability by taking advantage of tax breaks, such as contributing pre-tax dollars to an employer-sponsored retirement plan. Most also claim deductions for mortgage interest, traditional IRA contributions, or charitable donations. In addition, there may be other ways of reducing your tax liability. For example, under appropriate circumstances, losses or expenses from previous years may be carried over to the next tax year.

5) Beat inflation. Suppose the current inflation rate is 4%. In order to maintain your buying power, you would need a 4% annual wage increase so that your income keeps pace with rising prices. A decline in your buying power would certainly lower your standard of living and affect your lifestyle. As a result, you might want to consider putting your money to work for you to beat inflation.

6) Manage unexpected risks. You are probably well aware that life involves risk, which could lead to financial loss. For example, you could become disabled without income, or an untimely death could cause financial hardship for your family. As a result, many have made insurance the cornerstone of their overall finances because it offers protection that can help cover potential liabilities and risks.

These six steps will help you focus on the important issues that affect your finances. As you review your financial situation on an annual basis, you will probably need to make alterations due to changing goals and circumstances. If you faithfully keep track of your progress in these areas, you may be able to both afford your future and finance your dreams.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFBAR02-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001.

CRN201412-155664

REMARRIAGE: ALTERING YOUR FINANCIAL PLAN TO MEET YOUR NEEDS

In previous generations, men traditionally handled the family finances. While this arrangement may have worked well during the husband’s lifetime, the consequences of the wife’s lack of involvement in the family’s finances often became clear after her husband died. Today, more women are actively directing the outcome of their personal finances, and for good reason.

Women need to plan for a time when they may be on their own. Through divorce, widowhood, or personal choice, the odds are high that a woman will be independent at some point in her lifetime. Financial planning is essential for women throughout life, but it becomes especially important in the event of remarriage, as financial arrangements may need to be made for ex-spouses and children.

If you are in a second marriage or about to remarry, you may want to consider the following important points about managing your personal finances:

Bank Accounts. Sharing joint accounts may help to dissolve any mysteries about where and how family income is spent. Many couples decide to split expenses evenly, but seriously consider having the higher wage earner pay the larger portion of the bills.

Prior Debt. Will each spouse be responsible for the other’s debt incurred before the marriage, and if so, to what extent? Keeping the indebted spouse’s prior debt separate will help ensure the other spouse’s property remains out of reach of creditors.

Property Acquired before Remarriage. Owning previously acquired property in your own name can prevent the risk of losing personal property to your spouse’s potential creditors. Also, doing so may have estate tax benefits. In 2013, estates valued in excess of $5.25 million may be taxed as high as 40%. Every individual may exclude up to $5.25 million from estate taxes in 2013. Keeping your own property in your own name can help ensure that you minimize estate taxes while providing an inheritance for children from a previous marriage.

Home Ownership. The majority of couples choose to title property jointly as tenants by entirety. When one spouse dies, the home passes to the surviving spouse tax-free. When the surviving spouse dies, up to $5.25 million may be protected from taxation in 2013.

Retirement. Saving enough for retirement is a major financial objective for married couples, and women have unique concerns when considering this goal. First, women typically live longer than men, so their retirement funds need to last longer. In addition, women often spend more time out of the workforce than men as a result of caregiving responsibilities, and because of this, they are less likely to have pensions and full Social Security benefits. The gap between gender incomes makes it especially important for women to prepare for retirement.

Insurance. Disability income insurance can provide financial protection in the event you or your spouse are unable to work because of an accident or an illness. These policies can ensure that funds for bills and expenses will continue to be available. Similarly, life insurance can provide a measure of financial security upon death. Life insurance can help ensure that children from a prior or current marriage will have the funds to attend college, the mortgage will continue to be paid, and the surviving spouse will have some replacement income.

Estate Planning. Blended families have unique estate concerns, so it is important to plan for the final disposition of your assets. Trusts can be a valuable tool to minimize estate taxes and to help ensure that your assets are distributed to your heirs according to your wishes. For example, at death your assets can pass to a trust, from which your surviving spouse will receive income without access to the assets themselves. At the death of the surviving spouse, the assets can then pass to children from your current or previous marriage. This gives the surviving spouse financial security and provides an inheritance for your children as well. In addition, if the surviving spouse later remarries, the trust precludes your assets from their marital or community property.

Anyone who remarries needs to balance his or her financial past with the financial future. By addressing financial strategies as soon as possible, you can avoid disputes and build financial security for your extended and blended families.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFWREMRG-04

The information provided 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 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.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

Principal Underwriters: MML Distributors, LLC. (MMLD) and MML Investors Services, Members FINRA and SIPC(www.finra.org) and (www.sipc.org). MMLD and MML Investors Services are subsidiaries of Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001.

CRN201412-155661

WHAT YOUR CHILDREN SHOULD KNOW ABOUT YOUR FINANCIAL AFFAIRS

Many parents may find it uncomfortable, or think it is unnecessary, to inform their children about their personal matters. Yet, preparing your family helps everyone feel better about your financial and health care wishes, and it can ease the decision-making process in many important areas.

As you grow older, informing your children of financial, estate, and medical arrangements that could affect the entire family helps everyone prepare and plan for the future. This knowledge need not include exact facts and figures; however, the following information should be made available to, and be understood by, your grown children:

Life Insurance. Life insurance is typically purchased to provide cash to help cover mortgages, liabilities, expenses, estate taxes, and lost income. Knowledge of the existence and whereabouts of life insurance policies can be of critical importance to children when settling their parents’ financial affairs. A policy locked in a safe-deposit box may not be found in a timely manner, if ever.

Other Insurance. Adult children should be aware of any other insurance policies that you may have—including health, disability income, and long-term care insurance. If you are age 65 or older, they should also have a basic understanding of Medicare coverage and be aware of any health insurance policies that go beyond coverage provided by Medicare. Older adults can greatly benefit when their children understand and follow appropriate procedures, as well as submit any necessary forms in a timely manner.

Wills. It is important to prepare a will in order to avoid leaving the disposition of your estate up to your particular state and its laws. To help ensure assets are distributed according to your wishes, both you and your spouse should prepare wills, review them regularly, and make necessary updates as circumstances warrant.

Although the exact contents may be kept private, the existence and location of wills should be disclosed to all family members. Wills should not be kept in bank safe-deposit boxes, which may be sealed at death. The original will may be left with your attorney for safekeeping.

Trusts. Although wills accomplish many estate-related tasks, trusts may help protect your estate from unnecessary taxation or mismanagement by individuals who might lack the understanding to handle matters appropriately. Trust documents should be kept with wills for ease of access. Be sure to discuss pertinent terms with those who will be involved. As children reach adulthood, it is common for parents to select a responsible daughter or son to act as a trustee in the event of the parents’ deaths.

Living Will. This document specifies your preferences regarding the administering or withholding of life-sustaining medical treatment. Under many state statutes, a patient must be considered “terminal,” “permanently unconscious,” or in a “persistent vegetative state” before life support can be withdrawn. Copies of living wills should be made available to anyone who would be involved with your care or that of your spouse, and the originals should be kept in a safe, readily accessible storage place.

Health Care Proxy. This legal instrument allows you to appoint a person to act as an agent on your behalf to make medical decisions if you should become incapacitated. A copy of the health care proxy should be filed with your primary doctor and your hospital, if possible. The individual appointed as your agent should also retain a copy.

Durable Power of Attorney. With a durable power of attorney, an individual or financial institution may act as an agent to oversee your legal and financial affairs in the event of your incapacity. Grown children need to be informed of the steps that have been taken to ensure the competent direction of your affairs, should the need arise. However, their actual involvement in your affairs may be limited, according to your desires. A power of attorney automatically terminates upon the death of the principal.

Assets and Debts. It can be beneficial for your children to know that a list of your assets and debts exists, without necessarily seeing the list itself. An asset list, developed and updated regularly, may include information on your bank accounts, real estate holdings, pension holdings, annuities, business agreements, brokerage accounts, boats, cars, works of art, collectibles, other valuables, and insurance policies. A debt list should include information on your current mortgages, consumer indebtedness, personal loans, and business obligations. Both lists should identify where paperwork and associated files for each item can be found.

Planning for a worst-case scenario may help your loved ones through an unforeseen tragedy. At first glance, preparing these lists and the associated documentation may appear burdensome. Once completed, however, both parents and children can enjoy a sense of confidence that the thoughtful planning they have implemented will ultimately be properly fulfilled.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. EPOC153-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

CRN201412-153825

BUILDING RETIREMENT CONFIDENCE

Many people may be unaware of the amount of savings they will need to fund a comfortable retirement, according to The 2013 Retirement Confidence Survey (RCS) by the Employee Benefit Research Institute (EBRI).* The annual survey aims to discover what percentage of income Americans are saving for retirement, and whether or not the nation as a whole has a realistic financial picture for the years to come.

The Results
Survey results indicate that only 13% of workers feel very confident about having adequate retirement funds, while 28% are not at all confident in their ability to fund a comfortable retirement. Perhaps more alarming is the fact that 28% of all workers surveyed say they have less than $1,000 saved for retirement, and only 46% have tried to calculate how much they need to save to live comfortably in retirement. Based on these and other findings, Americans have a crucial need to make saving money and financial management a top priority, so they can be secure and stable in their retirement years.

Where to Begin?
So, what can you do to start saving more and spending less? A good plan begins with saving at least six months’ worth of income in case of unexpected or emergency expenses. Cars break down, roofs spring leaks, and other “surprises” often seem to come out of nowhere. Having an emergency fund can help ensure these needs will be met as you continue to build your financial future. Once you calculate the amount you need to set aside, establish a monthly goal for saving toward this emergency fund, and pay it faithfully like any other expense until you have reached the predetermined amount. An emergency fund should be conserved in a relatively liquid, low-risk account.

A cash reserve is your first step toward obtaining financial security. As you accomplish this goal, consider utilizing some of these smart, money-saving tips to reach your retirement goals, as well as develop a healthy spending and saving plan:

Stash it before you cash it. Many employers offer some type of retirement savings plan, such as 401(k)s,403(b)s, or 457s. Sign up and allocate a certain amount or percentage of your paycheck to be directly deposited into a retirement account. This money is deducted from your income before taxes and may have a relatively minor effect on your net pay. Furthermore, if your employer offers matching contributions, this will automatically increase the principal in your account—that’s free money for taking the initiative to plan your future.

To enhance your new savings habit in your personal life, consider signing up for automatic transfers from your checking account to savings accounts or an Individual Retirement Account (IRA). A good general rule is to increase the percentage you save every time you get a raise. This way, your savings and income have the potential to grow together throughout the years and outpace the eroding power of inflation.

Set limits. Credit cards, debit cards, and ATMs make cash readily available at the touch of a button. Take a moment to calculate a reasonable spending allowance for a week. At the beginning of the week, withdraw that amount and limit your spending. A set budget can help you prioritize necessities.

Use tax advantages when available. If your employer offers flexible spending accounts (FSAs), you may contribute pre-tax earnings for medical and dependent-care expenses. These funds can help parents save tax dollars when paying for childcare, for example, but in order to not lose any money, the whole amount contributed must be depleted by the end of the year. Any remainder will be forfeited.

Pay yourself. When your credit card, new car, or school loan is finally paid off, consider “continuing” those payments by making deposits into your own savings account. Eliminating debt will increase your net worth, and by continuing to build your savings, you can greatly increase your assets.

Contribute to your piggy bank. Loose change adds up over the course of a year. Pay for everything with bills and make nightly change deposits into the piggy bank. To take this a step further, consider occasionally depositing one dollar bills or even five dollar bills. If this is done faithfully, you will likely have more than a $1,000 at the end of the year.

Conserve any windfalls. Every now and then people receive large amounts of cash at once. Inheritances, tax refunds, and company bonuses are all windfalls that may leave you flush with excitement. Those things you have been wanting may now seem to be a transaction away, but hold on. Allocate the amount received into three portions: one for long-term savings goals, one for short-term savings goals, and to reward yourself, one portion for spending money. This way, you will get to splurge on something you’ve been wanting and have the satisfaction of continuing to meet your savings goals.

Have fun for free. Sometimes, we all spend money out of carelessness or boredom. Make a list of fun and inexpensive things to do, and when you feel cash burning a hole in your pocket, do these things instead. Go for a hike, go to a museum, or even take a drive through the country. Think about your list, and stick to it whenever you feel like buying useless items. By weeding out the unnecessary from the necessary, you will be that much closer to achieving your financial goals.

Results of the Retirement Confidence Survey indicate that more than half (57%) of those saving for retirement report that the value of their savings and investments, excluding the value of their primary home and defined benefit plans, are under $25,000*. Consider this: Saving a mere $20 per week will amount to $1,040 at the end of the year. With a 5% annual return and 25 years of saving, those $20 contributions could amount to well over $50,000.

Saving to meet short- and long-term goals doesn’t have to be difficult, but it does require that you take a proactive approach. With a little time and effort, your goals may become a reality.

*Source: Employee Benefit Research Institute (EBRI), The 2013 Retirement Confidence Survey (RCS).

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFGAMSAV-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

Principal Underwriters: MML Distributors, LLC. (MMLD) and MML Investors Services, Members FINRA and SIPC (www.FINRA.org and www.SIPC.org) MMLD and MML Investors Services are subsidiaries of Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001.

CRN201412-155669

DIVORCE AND RETIREMENT PLAN PROCEEDS: A CASE STUDY

It is rarely pleasant to discuss divorce, yet it is an unfortunate occurrence that happens with increasing frequency in our society. Because divorce involves the dividing of assets, some of which have tax implications, it is important to be aware of the “tax traps” that may be lurking. As more Americans participate in 401(k) plans and other defined contribution retirement plans, dividing vested retirement plan assets in divorce situations has created complex financial issues.

A True Case History
In 1987, a New Mexico orthodontist (Dr. Arthur Hawkins) agreed to give his wife (Glenda) $1,000,000 from his retirement plan as part of their divorce agreement. He assumed Glenda would be responsible for paying taxes on the money since she would eventually have control of it. After all, he wasn’t taking money out of the plan. . .or so he thought. Neither he nor Mrs. Hawkins reported the distribution on their separate 1987 tax returns.

In 1989, the Internal Revenue Service (IRS) demanded that both parties include the distribution on their separate 1987 tax returns, prompting each to petition the Tax Court for a ruling. In A. Hawkins, 102 TC 61, Dec. 49,638, the Tax Court ruled that the divorce agreement was not a qualified domestic relations order (QDRO), leaving Dr. Hawkins with a Federal income tax bill of almost $400,000, while his ex-wife received $1 million tax free.

Fairness would seem to dictate that the spouse receiving the money would pay the tax on it, and that may have been the case had the taxpayer filed a QDRO as part of the divorce decree.

A QDRO is a judgment, decree or order that is made pursuant to state domestic relations law that relates to child support, alimony, or property rights pertaining to a spouse, former spouse, child, or other dependent, referred to as the “alternate payee.” A QDRO creates or recognizes the existence of the alternate payee’s right to receive all or a portion of the benefits payable to a participant under a retirement plan. If properly drafted, the QDRO can ensure that the alternate payee pays the taxes on benefits awarded to him or her.

To be protected through a QDRO, it must specify:
• The name and address of the plan participant and the “alternate payee” (typically, the participant’s spouse).
• The name of each plan to which the order applies.
• The percentage (or dollar amount) of the benefit to be paid to the alternate payee.
• The period of time, or the number of payments, to which the QDRO applies.

The QDRO must go in the divorce decree or court-approved property settlement document. The decree should also specify that a QDRO is being established under Section 414(p) of the Internal Revenue Code and the particular state’s domestic relations laws. Intent to establish a QDRO is insufficient; it must be spelled out in the divorce papers.

In Hawkins, it was the position of the Tax Court that the divorce agreement was not clear enough to recognize or assign rights to the former wife as an alternate payee to benefits payable under the plan because it did not contain a reference to Section 414(p).

On Second Thought…
Dr. Hawkins appealed the Tax Court decision and received a favorable ruling in 1996 (Hawkins v. Comm., 86F.3d982, 10th Cir. 1996) in which the 10th Circuit Court maintained that the Tax Court’s reading of the Section 414(p) requirements was too narrow. Specifically, the Appeals Court held that the exact wording of Section 414(p) did not have to be present in the decree in order for the QDRO requirements to be met.

Getting divorced can be “taxing” enough, but it need not be made more difficult by poor drafting of a QDRO. And, although the decision in Hawkins allows a certain amount of latitude in the language used to draft a QDRO, applying the proper language in a divorce decree may ease some of the inevitable complications that can arise when dividing retirement plan assets. At a minimum, qualified legal advice should be obtained to ensure that any desired planning actions are properly worded and structured.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. RPTQDRO2-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

Principal Underwriters: MML Distributors, LLC (MMLD) and MML Investors Services LLC, Members FINRA (www.finra.org) and SiPC (www.sipc.org). MMLD and MML Investors Services LLC are subsidiaries of Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001.

CRN201412-155168

MAKING LIFE’S TRANSITIONS MORE MANAGEABLE

Some life transitions, such as a career change, are planned. Others, such as job loss or divorce, can be sudden and unexpected. One common thread running through all transitions is the insecurity of wondering if you will have enough money to get you through. This concern may be exacerbated by not knowing exactly when the transition will be complete. While the goal of finding a new job (in the case of job loss) or landing a first job in a new field (in the case of a career change) is clearly defined, it is the timing of achieving the goal that can cause a great deal of financial anxiety.

One way of dealing with this problem is to determine your financial staying power. This exercise allows you to project how far down the road your financial resources will carry you. While there may always be a certain amount of money worries, by knowing how much time you can buy, you can better concentrate on the task of accomplishing your transition goal.

The process begins by examining how much it costs you to live your current lifestyle. To do this you will need to go back over your check book and credit card receipts to find out where your money has been going. In addition, don’t forget those cash expenditures and frequent ATM stops that lighten your wallet on a daily basis.

Once you have a good idea of your average monthly expenses, you can match them against the financial resources you have committed to the transition. This will include cash on hand, any reliable cash inflows such as a spouse’s salary, investment income or rental income, alimony or child support, a severance package or unemployment compensation, if applicable, and any investment assets you can liquidate if a shortfall exists.

After recording the expenses for your current lifestyle, you will want to repeat the exercise based on a modified spending plan. You can modify your current spending level by noting areas where you can cut your budget without seriously changing your lifestyle. These changes might include doing some things on a less frequent basis or seeking less expensive alternatives for some of your current spending habits.

Now that you have recorded the expenses of your modified spending plan, you are ready to further hone your budget to create your “bare bones” budget. This third level of spending reduces your cash outflows to only those necessary for survival.

At this point in the process, nothing is etched in stone, and you are in complete control of how you will allocate your resources. You can even customize your plan to allow for continuing to fund your current lifestyle for a certain number of months, switching to a modified spending plan if you find that you need more time or going to your survival budget if an unexpected obstacle prevents you from achieving your transition objective within the planned time frame.

Life changes can be challenging for a number of reasons, but you can ease the financial pressures by knowing at the outset how far your money will carry you. By determining how much it will cost you to get from point A to point B, you can decide whether your transition plan makes financial sense or needs to be redesigned.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFPSTAY1-04

CRN201412-155529

MONEY MANAGEMENT THROUGHOUT LIFE STAGES

On your way to developing and maintaining good financial health, you are determined to accumulate emergency funds for a rainy day. A good plan often begins with saving at least six months’ worth of income and progresses into developing the capacity to meet your personal financial goals in the short term, as well as the long term. You have taken the first step, and have started to save money.

A solid plan can play a big role in building financial security for you and your loved ones. And yet, are you regularly reviewing your finances? Doing so becomes particularly important whenever you reach a new life stage. New additions in your life such as a spouse, homeownership, or the birth of a child make reviewing your plans a necessity. You may need to give your finances extra consideration upon reaching the following milestones:

First Job. When you obtain your first “real” job it’s likely that you will be presented with employer-sponsored retirement savings plans. It is never too soon to begin saving for retirement, and taking advantage of your employer’s retirement savings plan as soon as possible will give your account the maximum amount of time and potential to grow. The combined effects of time and compound interest are powerful, and the sooner you start the better. Try to contribute enough to your fund to take full advantage of any employer-provided matching contributions.

Also, learn about the insurance provided by your employer’s benefits plan, including health, life, and disability insurance. If your employer’s plan offers insufficient coverage, or if a plan is not offered at all, consider obtaining coverage independently. If you change jobs, pay attention to the benefits. Benefits will often vary greatly from employer to employer, and changes in insurance coverage and retirement options must be factored into your personal plan. For example, funds in your retirement plans might need to be rolled over as you continue to save.

Marriage. Weddings are special occasions that become cherished memories long after the bouquet has been tossed and the rice has been thrown. They are also events that bring about financial changes. After getting married, you may consider opening a shared bank account, owning property jointly, as well as sharing auto insurance and possibly medical insurance. You may also want to begin saving toward the purchase of your first home and start preparing to raise a family.

Obtaining and/or updating life insurance plans to reflect a name change, if applicable, as well as including your spouse as your beneficiary, will help to ensure that financial goals will continue to be met. Review retirement plans and goals to establish a savings plan that aims to fulfill your retirement needs. Getting married will also most likely affect your tax situation. Think about the most effective tax strategies that will help with annual filings, as well as your long-term goals.

New Home or Refinancing. Buying a first home is a happy event. Now, the money you may have spent on rent will build equity in a place that you own. Whether you are a first-time homeowner or are looking to refinance, research the various mortgage types available to find the one that best suits your needs. In addition, you will have to find a homeowners insurance policy that will suit your coverage needs. This is also a good time to review life insurance policies to assure that mortgage obligations will remain covered in the event of your death.

Children. With the added joy and responsibility of a child comes the need for extra financial security. Update your medical plans to include the child. In addition, review your life insurance policy to ensure you have adequate coverage amounts, and include the child on the beneficiary list.

For an infant, college is 18 years away, yet the sooner the family starts saving, the better. A college fund that has many years to earn interest and contributions is ideal. Children may also change your estate plan. Writing or reviewing your will becomes especially important to make sure the child will be provided for and suitable guardians will be named.

Starting Your Own Business. If you leave your old job to start your own business, you will have to assume responsibility for previously employer-sponsored benefits. It is important to maintain retirement, medical, and life insurance plans, as you continue building financial security.

Retirement. Now is the time to enjoy the fruits of your labor. You may be considering relocating to a warmer climate and are anticipating all of the adventures you will have there. However, your funds will still require attention as you continue to manage your money. Remember to maintain adequate health care coverage, and know your long-term care options. Proper planning can help protect your hard-earned assets from being spent on potential medical expenses.

Perhaps one of the most secure feelings in life is knowing that you are financially secure and are prepared for whatever may happen. Through annual checkups you can assess financial goals, provide for your loved ones, and build for the future. As you approach each new life stage, you will find that additional consideration and planning are well worth the effort.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFGMMLS0-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

Insurance products issued by Massachusetts Mutual Life Insurance Company (MassMutual), 1295 State Street, Springfield, MA 01111-0001 and C.M. Life Insurance Company and MML Bay State Life Insurance Company, 100 Bright Meadow Boulevard, Enfield, CT 06082.

Principal Underwriters: MML Distributors, LLC. (MMLD) and MML Investors Services, Members FINRA and SIPC (www.FINRA.org and www.SIPC.org) MMLD and MML Investors Services are subsidiaries of Massachusetts Mutual Life Insurance Company, 1295 State Street, Springfield, MA 01111-0001.

CRN201412-155663

REACHING RETIREMENT

Ah, retirement! You are now armed with the hard-earned wisdom of your years and are eagerly anticipating what the next 50 years will bring. After the retirement party is over, you may feel aimless and unsure of what lies ahead. Rather than viewing retirement as an ending, why not consider it an unparalleled opportunity to pursue new and exciting possibilities?

Many people, either by necessity or choice, have made work the focal point of their lives. Indeed, high achievers and “workaholics” typically have little time for anything but work. Even to those for whom work is not all consuming, its importance to our sense of self-esteem should not be underestimated. However, in later years, some people may feel that although careers were once the focal point of their lives, multiple avenues of possibility do exist outside of work, and they look forward to exploring those opportunities.

Carpe Diem!
Retirement offers the perfect chance to seize the day and set new life goals. You may now have the ability to diversify your activities and do things that may have seemed impossible in prior years. Some people enjoy the prospect of charitable work, while others wish to pursue activities of interest. Still others may prefer RV travel or cruising to exotic ports of call.

Your retirement lifestyle might look something like this: part-time work to fulfill productivity needs; charitable work to give back to your community; adult education to rekindle the joy of learning; and sports and exercise for fitness and fun.

Is such a lifestyle really possible after retirement? The answer may depend on how well you have planned financially. Review your present financial situation. Start by assessing your income and assets versus your expenses and liabilities. If your debts exceed your assets, develop a plan to pay down your debt to avoid facing it while in retirement.

Perhaps you have some savings but wonder if it will be enough to provide for all of your needs and wants in retirement. If that is the case, start by projecting your retirement funding needs and then determine the amount you must begin setting aside monthly and yearly to close the gap between that goal and your current assets. When projecting your expenses in retirement, it’s important to consider inflation. In addition to creating higher costs for goods and services, inflation creates depreciation in currency values; in other words, more dollars are needed to purchase the same amount of goods and services. As time goes on, one of your greatest financial challenges will be making sure that your savings exceed inflation.

Retirement presents you with the golden opportunity to live your life around your interests and your desires—instead of around a job or a career. Figuring out what you want to do may be challenging, but it can also be enlightening. Your horizons are limited only by your imagination. Opportunities are everywhere. Sometimes, the world looks different when viewed through a new window!

The information contained in this article is for general use and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. PFGFIFTR-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-155668

RETIREMENT SAVINGS: DO YOURS MEASURE UP?

When envisioning retirement, you may picture living in tropical climates, traveling and sightseeing at leisure, or doing whatever suits you on any given day. Regardless of your age or circumstance, it might surprise you to learn that a “lifestyle plan” is an important part of retirement planning.

Knowing how you want to spend your retirement years, where you might like to live, and which activities you plan to pursue is necessary in determining the total amount of cash you’ll need. A general rule of thumb suggests that you may need 60% to 80% of your current income per year in order to maintain your current standard of living in retirement. If you find this figure surprising, you are not alone.

Social Security
Although many people think that their Social Security benefit will provide a large portion of their retirement income, for the most part, it is a supplement to their retirement savings, rather than a main source of income. You can get an estimate of your future Social Security benefits by going to the Social Security website atwww.ssa.gov and using the online estimate calculator. By obtaining your estimate of benefits online, you can plan for the amount of income you will need to supplement your desired lifestyle.

Since Social Security provides only a portion of needed income, many people rely on savings to make up the difference. And yet, according to The 2013 Retirement Confidence Survey (RCS), 57% of respondents who are currently working report having total savings and investments of less than $25,000.*

With the decline in traditional pensions and the uncertain future of Social Security, individuals are increasingly responsible for their own retirement funds, but according to these statistics, many have yet to take that important first step.

Taking the First Step
Starting a retirement savings plan can be a lot easier than you may think. In fact, the first step is to accept “free” money. This means taking full advantage of all of your employer’s benefits. This may include a traditional pension, also known as a defined benefit plan that your employer contributes to on your behalf, which is then payable to you upon retirement.

Today, a more common benefit option is a defined contribution plan, such as a 401(k). Your employer may offer a company match in contributions up to a certain percentage. That’s free money increasing your principal that did not come out of your paycheck, but you must make the contributions. Employer-sponsored 401(k) plan contributions may be deducted from your paycheck before taxes, and have the potential to grow tax deferred.

Because money is deducted from your gross pay, you may find that your contributions have a relatively small impact on net income, and can be of great benefit to your overall nest egg. For example, saving $5,000 today, over a period of 15 years, at a hypothetical 5% rate of return, could amount to over $10,569 in additional savings income.

Individual Retirement Accounts
Since retirement may require 75–90% of your current income, many people are contributing to Individual Retirement Accounts (IRAs) in addition to employer-sponsored retirement saving plans. Traditional and Roth IRAs allow for annual contributions of $5,500 in 2013 for those under age 50. For those age 50 and older, annual “catch up” contributions of an additional $1,000 are allowed in 2013. Funds in both accounts will be subject to a 10% Federal income tax penalty if distributions are taken before age 59½, however, certain exceptions apply.

Depending on your income and participation in an employer-sponsored plan, contributions to a traditional IRA may be tax deductible and earnings grow tax deferred until you retire. Contributions to a Roth IRA are made after taxes, but are tax exempt when you withdraw in retirement, provided you are age 59½ or older and have owned the account for at least five years. Taking the opportunity to save as much as you can afford each year could have a favorable and significant impact on your ability to reach your retirement goals.

You can achieve your retirement goals and live the lifestyle you desire, if you develop a game plan. Take time now to evaluate your resources, set retirement goals, and take the necessary steps to reach them.

* Source: Employee Benefit Research Institute (EBRI), The 2013 Retirement Confidence Survey (RCS).

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. RPGMSVG0-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

CRN201412-156223

IRS TAX TIPS

Even with the best intentions, filing taxes often becomes an event that is put off until the very last minute. Tax laws can be confusing, leaving many unsure of what they may deduct and how they should file. However, according to the Internal Revenue Service (IRS),1 the process can be simpler than you may think.

Here are 10 tax tips direct from the IRS designed to make your filing easier:

1. Organize. Take time throughout the year to store and organize your records, canceled checks, and receipts in one place. Remember to include the income, deduction, or tax credit items that you reported the previous year. Organizing and maintaining a filing system will keep everything conveniently together, and make filling out forms that much simpler.

2. Report all income. Gather all of your W-2 Forms, Wage and Tax Statements, and 1099 income statements to report your income when you file your taxes. Keep them with your other records to make sure you can easily find them when you need them.

3. Visit the IRS website. At www.irs.gov, you will discover many sources of information. You can download and print tax forms, access tax law information and changes, find a list of answers to frequently asked questions, and access numerous online tools and filing tips.

4. Use Free File. Everyone has at least one option available to prepare and e-file a tax return free of charge. IRS Free File uses brand-name tax software or online forms and is available at www.irs.gov. You qualify to use free tax software if your income was $57,000 or less; if your income was higher, you can use Free File Fillable Forms, the e-version of IRS paper forms. Go to IRS.gov/freefile to see your options.

5. Understand your filing options. There are several options for filing your tax return. For example, you may choose to file your taxes yourself or go to a tax preparer for help. In addition, you may be eligible for free help at a volunteer location. Decide which filing option works best for you.

6. Try E-file. E-filing presents an easy and convenient method of filing your taxes. Errors are reduced and refunds are returned faster than mailed documents. Last year, more than 80 percent of taxpayers used IRS e-file, and many tax preparers are now required to use it.

7. Get answers to your questions. Visit the Interactive Tax Assistant tool on the IRS website to get answers to your questions pertaining to tax deductions and credits.

8. Use Direct Deposit. If you are to receive a refund, the direct deposit option will allow for a faster return, and it may decrease chances of theft. When you enter information for this option, take the time to double-check your bank account number to avoid errors.

9. Check out Publication 17. Publication 17, Your Federal Income Tax, on www.irs.gov is a complete tax resource that includes important information, such as whether you need to file or how to choose your filing status.

10. Double-check your return. When you have finished with your forms, take a couple of extra minutes to double-check your information, especially your Social Security number. Also check your spelling and math. If your forms are hand-written, make sure they are legible.

These easy-to-follow steps may help to prevent any unnecessary tax apprehension, and they can help to make the filing process that much smoother. Starting early and organizing throughout the year can greatly reduce chances of error and stress.

1 IRS. “IRS Offers Top Ten Tax Time Tips.” www.irs.gov/uac/Newsroom/IRS-Offers-Top-Ten-Tax-Time-Tips (accessed April, 2013).

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. TXGTIPS0-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel

CRN201505-171859

MAXIMIZE YOUR CREDITS, DEDUCTIONS, AND EXEMPTIONS

As you manage your taxes with both the near and distant future in mind, one important, constant goal will be reducing your adjusted gross income (AGI), which equals your gross income (salary, investment earnings, etc.) after your allowable deductions and exemptions. Maximizing your deductions and exemptions, as well as taking advantage of any tax credits available to you, is a great way to start saving money on your next tax bill.

Credits vs. Deductions
First things first: How is a tax credit different from a tax deduction? A tax credit reduces your tax dollar for dollar—that is, a $1,000 tax credit actually saves you $1,000 in taxes. By comparison, a tax deduction reduces your taxable income, but it is only worth the percentage equal to your marginal tax bracket. For instance, if you are in the 25% marginal tax bracket, a $1,000 deduction saves you $250 in tax (.25 x $1,000), which is $750 less than the savings with a $1,000 tax credit. The higher your tax bracket, the more a deduction is worth, but a credit is always worth more than a dollar-equivalent deduction.

Tax credits reduce your tax bill, but certain restrictions, such as income limits, may apply. The American Taxpayer Relief Act of 2012 (ATRA) enacted in January 2013 makes permanent or extends some credits for child-related tax relief. If you have dependent children, you may be eligible to claim the $1,000 child credit in 2013 for each child under the age of 17. Other family-related credits include the adoption credit and the dependent care tax credit. If you are funding a child’s education, you may be eligible for the American Opportunity Tax Credit (AOTC) through 2017, which is an enhanced, but temporary version of the Hope education tax credit. The AOTC provides a tax credit of 100% of the first $2,000 of qualified tuition and related expenses, and 25% of the next $2,500 per eligible student applicable to the first four years of post-secondary education.

All taxpayers may either claim a standard deduction or itemize deductions for personal expenses such as home mortgage interest. Income limits apply to taxpayers who itemize deductions. In general, a taxpayer claims an itemized deduction when the total of qualified deductible expenses exceeds the standard deduction or if the taxpayer does not qualify for the standard deduction. For tax year 2013, the standard deduction is $6,100 for single filers; $8,950 for heads of household; and $12,200 for married joint filers.

How is a deduction different from an exemption? Personal and dependent exemptions are reductions in gross income in addition to the standard deduction or itemized deductions. Every taxpayer may claim a personal exemption for him or herself, unless he or she is claimed as a dependent on another taxpayer’s return. A married couple filing a joint return can claim two personal exemptions, one for each spouse. Even if one spouse has no income, that spouse is not considered the “dependent” of the other spouse for tax purposes. Exemptions will decrease for high-income taxpayers with AGIs above a certain phase-out threshold.

Above-the-Line Deductions
Retaining as much of your gross income as possible should be an ongoing objective, not something that happens only at tax time. Above-the-line deductions, if you qualify, reduce your adjusted gross income. They are so named because they are taken on your tax form just above the line where you enter your AGI. Possible deductions include contributions to qualified retirement accounts, student loan interest, alimony, early withdrawal penalties, and certain moving expenses.

Long-Term Capital Gains and Dividends
As an investor, planning your tax strategy can have a significant impact on your tax liabilities, particularly since the passing into law of ATRA. For investors in the top four income tax brackets, the long-term capital gains rate has been raised from 15% to 20% in 2013. That top rate applies to the extent that a taxpayer’s income exceeds the thresholds set for the 39.6% rate ($400,000 for married joint filers and $425,000 for heads of household). All other taxpayers will have a capital gains and dividends tax at a maximum rate of 15%; however a 0% will apply to the extent income drops below the top of the 15% income tax bracket: $72,500 for joint filers and $36,250 for single filers in 2013.

To prepare an effective tax strategy, advance planning is key. The sooner you begin, the greater your savings opportunities will be. Be sure to consult your tax professional to create strategies that are right for your unique circumstances.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. TXDED01-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

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PLANNING YOUR ITEMIZED DEDUCTIONS

Tax rates, deductions, and phase outs seem to be changing constantly, making the timing of income and expenses trickier than ever. For most taxpayers, however, the mantra should continue to be: defer income and accelerate deductions. The following deduction strategies may help you lower next year’s tax bill:

Bunch Deductions. Try “bunching” your expenses to make sure you exceed the deduction “floor.” Bunching two years’ worth of expenses into one year enables you to increase your total deductions over the two-year period and avoid losing the tax benefit. However, be aware that the alternative minimum tax (AMT) can creep up on you if you have a lot of deductions.

Pay State Estimated Tax Early. You may be able to gain a larger Federal deduction if you pay your state fourth-quarter estimated tax payment by December 31st and the AMT does not apply. If you are subject to AMT, paying early won’t benefit you.

Donate Appreciated Property. If you donate appreciated capital gain property to charity, the amount of your deduction is the value of the property rather than its cost, and you are never taxed on the amount of appreciation. The charity also benefits because it can sell the property and not pay taxes on it. In the case of most property donations, an annual deduction limit of 30% of adjusted gross income (AGI) applies.

Optimize Investment Interest Expense. If you have capital gains or dividend income and also have investment interest expenses, you may be able to calculate the break-even point, so you can optimize both the lower capital gain and dividend tax rate and the investment interest deduction.

Claim All Available Home-Related Deductions. If you operate a business out of your home, you may be able to take an office-in-the-home deduction if the office is your principal place of business. The home office space must be used regularly and exclusively for business. You won’t be able to take the deduction if your home office is used for any personal reasons. You may deduct a portion of your homeowners insurance, home repairs, and utilities, as well as all improvements to the office if they relate to the conduct of business. Homeowners depreciate the portion used for business; renters deduct a portion of the rent.

You may be able to deduct interest on a loan for a second home, provided your primary and secondary mortgages do not total more than $1 million. If you rent out the second home, you must use it personally for more than 14 days or more than 10% of the rental days, whichever is greater, for it to qualify as a personal residence. In addition to mortgage interest, you may be able to deduct property taxes and prorated monthly portions of your points paid over the life of the loan. If your second home qualifies as a personal residence, and you rent the home out for more than 14 days a year, you may also be eligible to deduct the appropriate portion of the upkeep, insurance, utility, and similar costs against rental income.

Understand the Tax Aspects of Divorce. While legal fees for divorce are not deductible, fees for tax advice related to the divorce are. Be sure to get these details stated separately on invoices to support the deduction.

Divorcing couples may want to consider having child support payments reclassified as alimony. Child support is not included on the recipient’s tax return and the payer cannot deduct it. Conversely, alimony is included as income on the recipient’s tax return and it’s an above-the-line deduction for the payer. By splitting the difference, both parties could save money.

During property settlement negotiations, be aware of the potential tax liability associated with assets. Two assets may have the same current value but very different tax cost. If one has a low tax basis, and you sell the property, tax on the gain will reduce the available proceeds. So, assets are not necessarily “equal” for tax purposes even if they have the same value.

More Tax-Saving Strategies
– Lower your own taxable income by shifting income to other family members.
– Consider your plans for the near future. How will marriage, divorce, a new child, retirement, or other events affect your year-end tax planning?
– Take maximum advantage of your employer’s Section 125 cafeteria plan, 401(k) plan, health reimbursement arrangement (HRA), or health savings account (HSA).
– Consider filing separately if one spouse has numerous itemized deductions that are subject to a floor amount.
– Watch out for the AMT. If you take too many deductions, exemptions, and credits, you may risk being subject to the AMT.

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. TXITEMD0-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

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TAX AUDITS: CAUSE FOR CONCERN?

For many taxpayers, the words “tax audit” can produce feelings of anxiety. It may put you at ease to know that in fiscal year 2012, the Internal Revenue Service (IRS, 2013) actually audited 1.03% of all tax returns1. Why all the concern? Not knowing the factors that can trigger an IRS audit often contributes to high levels of anxiety.

How Random Is the Selection?
The large majority of returns selected for audits are done so by computer. The process compares individual returns to statistical averages for similar taxpayers in terms of income, number of dependents, geographic locale, etc. Discrepancies from the “averages” make up a score called the DIF (Discriminant Function). Typically, returns with the highest 10% of DIF scores are chosen for audit reviews.

In addition, certain “discrepancies” are likely to automatically trigger an audit. One such example occurs when the income listed from various sources (e.g., wages, interest, dividends, capital gain transactions) does not match the reporting statements (e.g., W-2, 1099-Int, 1099-B, 1099-R) submitted to the IRS. Another instance likely to lead to an audit is when an item is reported in an incorrect or unusual place on a return.

Moreover, some circumstances may increase the likelihood of an audit. For example, in any given year, it is common for the IRS to target specific professions and/or deductions for special scrutiny. Recently, the IRS has announced that it will increase its enforcement efforts of pass-through entities, such as S corporations, as part of its National Research Program (NRP).

All Audits Are Different
While the purpose of all audits is to verify sources of income and validate deductions, exemptions, and credits, there are three basic types of IRS audits that vary in terms of comprehensiveness.

1. A correspondence audit involves a request from the IRS that you mail back proof of a particular item on your return. The IRS also uses this mail-based procedure to make adjustment audits—usually tax increases—based on calculations made by IRS computers. If the taxpayer accepts and pays the assessment notice, these audits usually end here. If the taxpayer believes the assessment is incorrect, he or she can challenge the notice by following the appropriate IRS procedures.

2. An office audit is a request that you meet with a tax auditor at an IRS office. The notice usually identifies the aspect of your return in question and specifies the proper documentation needed to settle the audit.

3. A field audit is usually a little more onerous, involving a meeting at your home or office with an IRS agent. In addition to reviewing supporting documentation for certain items on your return, the agent may be trying to evaluate whether your lifestyle is consistent with your reported income.

Know Your Rights
If you receive an audit notice from the IRS, hiring a tax professional to represent you may be an appropriate strategy. However, should you choose to handle an audit yourself, the Taxpayer Bill of Rights (included in the Technical and Miscellaneous Revenue Act of 1988) allows you to tape record your meetings with an auditor, if prior approval has been obtained from the IRS, and to adjourn a meeting with an auditor at any time to either consult with your tax professional or to request professional representation.

The best way to be prepared for the possibility of a tax audit is to keep well-organized records of your prior years’ returns along with complete, supporting documentation. Furthermore, while you may find tax theory a less than exciting subject, it is in your own best interest to try to understand as much of your tax return as possible. While these steps may have little effect on your chances of being audited, they will help reduce your anxiety level should the IRS request more information about your tax return.

1Internal Revenue Service. “Fiscal Year 2012 Enforcement Results.”http://www.irs.gov/uac/Newsroom/Statement-on-IRS-FY-2012-Performance-Results (accessed April 2013).

The information contained in this article is for general use and while we believe all in formation to be reliable and accurate, it is important to remember individual situations may be entirely different. Therefore, information should be relied upon only when coordinated with professional tax and financial advice. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any insurance or securities products and services. Written and published by Liberty Publishing, Inc. Copyright © 2013 Liberty Publishing, Inc. TXAUDIT1-04

The information provided 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 tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

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