When it comes to building long-term financial security, few opportunities have the same potential as your employer’s retirement plan match. Whether you’re just starting your career, navigating mid-career decisions, or managing a high-income strategy, understanding how to maximize your 401(k) employer match can be a critical key to retirement planning.

Why a 401(k) employer match matters

Employer matching contributions are essentially free money added to your retirement savings. Employer matches are most commonly offered through 401(k) plans and are based on a percentage of your salary and your own contributions. For example, a typical match might be 50% of your contributions up to 6% of your salary. Read more about matching contributions from the IRS.

Failing to contribute enough to receive the full match is like leaving part of your paycheck on the table. Matching contributions have the potential to increase your retirement savings over time. Why? Because of the power of compounding interest.

How compounding interest works for you

Compound interest is the engine behind long-term retirement growth. When you contribute regularly—and receive matching funds—your money earns interest, and that interest earns interest.

Here’s a simplified example from the IRS: 

These figures assume a 6% annual return on your initial investment. You can explore your own potential growth using the Ameritas retirement savings calculator. This is a hypothetical example for illustrative purposes only. Actual results may vary.

Investment basics: Terms to know

Before diving into your specific retirement plan paperwork, it’s helpful to understand a few key investment terms that can guide your decisions and help you make the most of your employer-sponsored benefits. Check our retirement plans glossary for more terms.

• 401(k): A retirement savings plan offered by employers that allows employees to contribute a portion of their paycheck before taxes, with potential employer matching and tax-deferred growth.
• Roth 401(k): An employer-sponsored retirement savings plan where employees contribute with money they’ve already paid taxes on, making the contributions and any qualified earnings withdrawals tax-free in retirement.
• Vesting: The process by which an employee earns the right to keep employer-contributed funds in a retirement plan, usually based on years of service.
• Asset allocation: The process of dividing investments among different asset categories, such as stocks, bonds, and cash, to balance risk and reward.
• Risk tolerance: Your comfort level with market fluctuations and potential losses, which helps guide your investment choices.

How can you make the most of your 401(k) employer match at every stage of your professional journey? These tips will help set you up for success.

Newly hired? Start strong, build early

Beginning a new job often comes with a flood of onboarding paperwork, and retirement plan enrollment can easily be overlooked. But this is the moment to set a strong foundation.

Key tips for new employees:

• Enroll immediately: Don’t wait. Some employers offer automatic enrollment, but others require you to opt in.
• Contribute enough to get the full match: If your employer matches up to 6%, aim to contribute at least that amount.
• Understand vesting schedules: Some employers require you to stay for a certain period before you fully own the match. Know your plan’s rules.

Even small contributions can grow substantially over time. For example, contributing just 1% more each year can lead to additional savings. Read our blog to learn more about retirement saving strategies.

For mid-career professionals: Reassess and optimize

Mid-career is a great time to reevaluate your retirement strategy. You may have increased earnings, changed employers or accumulated multiple retirement accounts.

Strategies to consider:

• Increase contributions: Whenever you can, increase your contributions up to the maximum amount.
• Take advantage of catch-up contributions: If you’re age 50 or older, you may be eligible to contribute extra to your retirement plan.
• Consolidate accounts: If you do find yourself with multiple 401(k) accounts, carefully consider your options to simplify management and ensure you’re not missing out on matches. You can leave your old accounts with your previous employer, cash them out (tax penalties may apply), roll them over to your new employer’s plan or roll them over to an IRA.

Also, review your investment allocations and consider diversifying to align with your risk tolerance and retirement timeline.

Pro tip for high earners: Avoid leaving money behind

High-income earners often face contribution limits and complex tax considerations. But employer match strategies still apply.

Advanced tips:

• Maximize salary deferrals: Ensure you’re contributing up to the IRS annual limit ($23,000 for 2025, plus $7,500 catch-up if over 50).
• Understand plan limits: Some plans cap matching contributions based on a percentage of income. Know your plan’s formula.
• Explore Roth options: If offered, Roth 401(k) contributions can provide tax-free growth, which may be beneficial depending on your tax bracket.

Talk with a financial professional

Maximizing your employer match can be one of the most effective ways to potentially grow your retirement savings. But every individual’s situation is unique. Whether you’re just starting out or refining a high-level strategy, speaking with a financial professional can help you make informed decisions.

Use this Ameritas financial professional finder to connect with someone who can guide you through your options and help you build a personalized plan.

Your 401(k) employer match is more than a benefit: it’s a strategic tool for wealth building potential. By contributing consistently, understanding your plan, and leveraging compounding growth, you’re taking the first step to save for your financial future.

Disclosures

Representatives of Ameritas do not provide tax or legal advice. Please refer clients to their tax advisor or attorney regarding their specific situation.

An educational guide for businesses and individuals

As 2025 comes to a close, it’s a great time to reflect on your financial health and take proactive steps to reduce your tax liability. Year-end tax planning helps both individuals and business owners. You can leverage deductions, credits and opportunities before 2026 arrives.

This guide outlines updated strategies based on current IRS rules and recent legislative changes, helping you prepare for a smoother and more financially sound tax season.

Individual strategies for tax preparation success

1. Maximize Retirement Contributions

Retirement contributions are one of the most effective ways to reduce taxable income while saving for the future. For 2025, the contribution limits for Individual Retirement Accounts (including traditional and Roth IRAs) are $7,000 for individuals under 50 and $8,000 for those 50 and older.

Learn more: What is an IRA?

If you’re eligible, contributing to a traditional IRA may allow you to deduct the amount from your taxable income. Alternatively, Roth IRAs don’t offer upfront deductions, but qualified withdrawals in retirement are tax-free.

Self-employed individuals should consider a SEP IRA or SIMPLE IRA, which offer higher contribution limits and can be set up before year-end. These plans not only reduce your taxable income but also help build long-term financial stability.

2. Review your deductions and potentially itemize

In 2025, single filers receive a $15,750 standard deduction, while married couples filing jointly receive $31,500 as a result of the One Big Beautiful Bill Act (OBBA) from July 2025. In addition, OBBA also enhanced deductions for seniors. Individuals who are age 65 and older may claim an additional deduction of $8,000 ($16,000 for married couples), which does phase out for taxpayers with modified adjusted gross income over $75,000 ($150,000 for joint filers). While many taxpayers opt for the standard deduction, itemizing may result in greater savings if your deductible expenses exceed these thresholds.

Common itemized deductions include:

• Mortgage interest.
• State and local taxes (SALT).
• Medical expenses exceeding 7.5% of AGI.
• Charitable contributions.
• Investment interest.

Calculate if itemizing saves you more money. This could help especially if you’ve paid large medical bills or made sizable charitable donations in 2025.

3. Manage your capital gains (and losses)

If you’ve sold investments this year, you may have realized capital gains. To offset those gains, consider selling underperforming assets to realize capital losses. This strategy, known as tax-loss harvesting, may reduce your taxable income.

You can deduct up to $3,000 in net capital losses against ordinary income annually if you are a single filer, and any excess can be carried forward to future years.

Additionally, if you’re in a lower tax bracket ($48,350 or less taxable income for single filers or $97,600 or less for married filing jointly), you may qualify for the 0% capital gains tax rate, making it a good time to realize gains strategically.

4. Make charitable contributions

Charitable giving not only supports causes you care about, it can also reduce your tax bill. You can deduct contributions to qualified organizations if you itemize. Regardless if you itemize, you can still take a charitable deduction of up to $1,000 ($2,000 if married filing jointly) for cash donations to public charities (excluding donor advised funds).

For those over 70½, consider making Qualified Charitable Distributions (QCDs) from your IRA. These distributions count toward your Required Minimum Distributions (RMDs) and are excluded from taxable income.

As always, be sure to keep proper documentation, including receipts and acknowledgment letters from the charities.

5. Organize your financial paperwork

The end of the year is the perfect time to organize your financial records and documents—including W-2s, 1099s, receipts, donation records and investment statements. Organized records help you claim deductions accurately and avoid delays or errors when filing.

In addition, you may want to consider using a digital filing system or tax preparation software to streamline the process.

Your tax preparer will thank you!

Filing as an individual? Here’s what to avoid.

Plan early to ensure your end-of-year tax preparation goes smoothly. Don’t fall into these common pitfalls:

• Procrastination: Waiting until the last minute to make contributions or donations can mean missing out on deductions.
• Neglecting deductions: Failing to review your finances may result in missed opportunities.
• Poor recordkeeping: Inadequate documentation can lead to errors and delays.

Small businesses tax tips

For savvy businesses, there are several tax saving strategies that can really make a difference. These are just a few:

1. Contribute to employee retirement plans

Offering retirement plans like 401(k)s, SEP IRAs or SIMPLE IRAs can provide tax benefits for your business and help attract and retain employees.

You can also deduct employer contributions, so be sure to set up a plan before year-end to claim the deduction for 2025. If you’re a sole proprietor, you can also contribute to your own retirement plan and reduce your taxable income.

2. Invest in capital expenditures

Under Section 179 of the Internal Revenue Code, businesses can deduct the full purchase price of qualifying equipment and software purchased or financed during the tax year. For 2025, the deduction limit is $2.5 million.

Additionally, bonus depreciation remains at 100% for property purchased and placed in service after January 19, 2025, allowing businesses to deduct the full cost of eligible assets immediately. This applies to new and used equipment, making it a powerful tool for reducing taxable income.

If you’re considering upgrades to machinery, vehicles or technology, making those purchases before December 31 could yield significant tax savings.

3. Claim available tax credits

Tax credits directly reduce your tax liability and can be more valuable than deductions. Some key credits for small businesses include:

• Work Opportunity Tax Credit (WOTC) for hiring individuals from targeted groups.
• Clean Commercial Vehicle Credit for purchasing electric or hybrid vehicles (only available for vehicles purchased prior to September 30, 2025).
• Energy Efficiency Credits for upgrading buildings or equipment (note, these rules have changed in 2025; contact a tax professional for specific requirements).
• Disabled Access Credit for improving accessibility.

Rules for these credits can change. Consult your tax advisor to determine eligibility and ensure proper documentation.

4. Understand the current 1099-K form limit

The IRS now observes a $2,500 threshold for third-party payment platforms like PayPal, Venmo and Square. If your business receives payments through these platforms in excess of $2,500 and 200 transactions, you may receive a Form 1099-K. However, this threshold is scheduled to decrease to $600 starting in 2026.

Regardless of whether or not you receive a Form 1099-K, be prepared to report this income accurately and reconcile it with your bookkeeping records. Misreporting or underreporting can trigger audits or penalties.

5. Review your estimated tax payments

Businesses are required to make quarterly estimated tax payments. If your income increased in 2025, you may need to make an additional payment before year-end to avoid underpayment penalties.

Use IRS Form 1040-ES or consult your accountant to calculate any remaining liability. Making a final payment now can help you avoid surprises in April.

6. Organize your business records and financial paperwork

Accurate recordkeeping is essential for claiming deductions, preparing financial statements and navigating audits successfully. Before year-end, review:

• Income and expense reports.
• Payroll records.
• Receipts and invoices.
• Asset purchases and depreciation schedules.

Consider using accounting software or hiring a bookkeeper to ensure everything is in order. Clean records also help you plan for the upcoming year and make informed business decisions.

Common tax preparation mistakes for small businesses

What should small businesses be particularly wary of when it comes to tax preparation? These three common concerns top the list:

• Not engaging a tax professional. Tax laws change often. Consult a CPA to stay compliant and maximize savings.
• Not planning for taxes enough (or at all). Strategic investments and credits require foresight and documentation.
• Poor recordkeeping. Just as with individuals, a lack of business recordkeeping can lead to missed deductions and audit risks.

Take the time now to get a handle on your paperwork—and, if necessary, get caught up before the end of the year.

The power of taking action

Whether you’re an individual or a small business owner, year-end tax planning is a powerful tool for improving your financial health. By acting now—contributing to retirement accounts, reviewing deductions, investing in your business and organizing your records—you can reduce your tax liability and be better prepared for 2026.

Disclosures

Information is gathered from sources believed to be reliable; however, we cannot guarantee their accuracy.

Representatives of Ameritas do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your specific situation.

Retirement planning is evolving. As people live longer and markets remain unpredictable, you need financial strategies that offer both stability and flexibility. A recent study by Ernst & Young, a global firm specializing in financial auditing, tax planning and business strategy, highlights how combining annuities, especially fixed indexed annuities (IA) and indexed universal life (IUL) insurance with traditional investments can lead to stronger retirement outcomes.

In this blog, we’ll explore how integrating these tools can help build a more comprehensive and flexible retirement strategy.

The retirement challenge

The research points to a significant issue: by 2030, the U.S. is expected to face a $240 trillion retirement savings gap and a $160 trillion protection gap. These figures emphasize the need for more comprehensive retirement planning. While investment-only strategies are common, they may not be enough to meet future needs.

This study shows that integrating insurance products can help you achieve better financial security in retirement. Let’s start by identifying what these products are.

What is a fixed indexed annuity?

A fixed indexed annuity is a financial product that provides guaranteed¹ income starting at a future date, typically during retirement. You pay into the annuity now, and it begins paying out later, often for the rest of your life. This study focused on IAs with guaranteed lifetime withdrawal benefits, which include features like index-linked growth and principal protection. These features can help the annuity keep pace with inflation and provide more income over time.

Learn more about annuities from Ameritas.

What is indexed universal life insurance?

IUL insurance offers lifelong death benefit coverage and includes a cash value component that grows over time. Unlike term life insurance, which provides coverage for a set period with no cash value, IUL offers lifelong protection and builds cash value. The cash value can be accessed through policy loans or withdrawals² and can serve as a financial resource during retirement.

Learn more about IUL insurance from Ameritas.

The value of integration

The study compared six retirement strategies using simulations across 1,000 market scenarios and three different starting ages (35, 45 and 65). The strategies included:

1. Investment-only
2. IUL and investments
3. IA and investments
4. Single Premium Immediate Annuity (SPIA) and investments (age 65 only)
5. IUL, IA and investments
6. IUL, SPIA and investments (age 65 only)

The integrated strategy that combined IUL and IA with traditional investments consistently outperformed the others in terms of retirement income and legacy value.

Key findings from the study

Higher retirement income: IAs produced significantly higher retirement income³ than investment-only approaches. This is due to features like guaranteed lifetime withdrawal benefits and index-linked growth, which can outperform traditional fixed income investments over time.

Improved legacy outcomes: IUL adds a layer of legacy protection. In addition to its valuable death benefit, its cash value can be accessed during market downturns, reducing the need to sell investments at a loss.² This can help preserve wealth and enhances what you can leave behind.

Tax efficiency: Both IUL and IA offer tax-deferred growth. IUL’s death benefit is generally tax-free, and its cash value can be accessed via policy loans without triggering taxable events.² This can improve your overall financial outcome in retirement.

Flexibility and customization: Integrated strategies allow you to tailor your retirement plan based on your personal priorities, whether that’s maximizing income, preserving wealth or balancing both. For example, higher allocations to IA emphasize income, while more allocated to IUL boosts legacy protection.

Resilience in volatile markets: During market downturns, you can draw funds from an IUL policy’s cash value instead of selling investments at a loss. This flexibility can help maintain portfolio stability and supports long-term growth.

Real-world application

The study included case scenarios to show how these strategies work in practice. One example showed how combining IUL and FIA helped a 65-year-old couple manage longevity risk, market volatility and inflation, all while maintaining a steady income and preserving wealth for heirs, resulting in a 5.5% increase in retirement income and a 29.6% boost in legacy value compared to an investment-only approach.

Another example involved a 35-year-old couple allocating 30% of annual savings to IUL and 30% of assets at age 55 to a IA. This strategy resulted in 13.9% higher retirement income at age 65 and 10.9% more legacy value at age 95 compared to an investment-only approach.

Considerations

While the study presents a strong case for integrating annuities and life insurance into retirement plans, it’s important to consider your individual circumstances.

• Cost: IUL can be more expensive than term life, especially for younger individuals. However, its long-term benefits may justify the cost for those focused death benefits on legacy and financial stability.
• Liquidity: Annuities typically require giving up access to the money you invest in exchange for a guaranteed income. You should assess your need for liquidity before committing to an annuity.
• Customization: Not all annuities or life insurance policies are the same. Features like inflation protection, payout options and fees vary widely. Working with a financial professional can help you choose the right mix for your goals.

Holistic retirement planning

The Ernst & Young study reveals a powerful insight: retirement planning works best when it’s holistic. By integrating annuities and IUL with traditional investments, you can help achieve better financial outcomes.

This approach isn’t about replacing investments but complementing them. Annuities provide stability and predictability, while life insurance offers protection and flexibility. Together, they help form a resilient foundation for a secure retirement.

¹ Guarantees are based on the claims-paying ability of the issuing company.

² Loans and withdrawals will reduce the life insurance policy’s death benefit and available cash value. Excessive loans or withdrawals may cause the policy to lapse. Unpaid loans are treated as a distribution for tax purposes and may result in taxable income.

³ Withdrawals of annuity policy earnings are taxable and, if taken prior to age 59 ½, a 10% penalty tax may also apply.

Representatives of Ameritas do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your specific situation.

In approved states, Ameritas life insurance products are issued by Ameritas Life Insurance Corp. In New York, life insurance is issued by Ameritas Life Insurance Corp. of New York.

In approved states, Ameritas annuities are issued by Ameritas Life Insurance Corp.

Financial security is a goal we all strive for. Passive income, which is money earned from assets, can offer an option for individuals with a long-term investing goal. Whether through dividends, rental income or investment returns, passive income has the potential to help create long-term financial stability.

Building passive income requires dedication and solid financial strategies. Not only can it give you the opportunity for more financial freedom, but it also can set up a legacy of wealth for your family. By investing in well-managed, income-generating assets, you’re not just planning for your own future, you’re giving future generations a solid foundation to build on.

Key terms to understand about passive income

What is passive income? At its core, passive income is a type of earning that requires minimal ongoing effort to maintain after the initial investment of time, money or resources. It’s essentially money you earn while not actively working for it on a day-to-day basis.

Common types of passive income can include:

• Investment dividends: Regular payments from stocks, mutual funds or exchange-traded funds.
• Rental properties: Income from leasing real estate to tenants.
• Interest earnings: Money earned from savings accounts, CDs or bonds.
• Royalties: Payments from intellectual property like books, music or patents.
• Business investments: Profits from businesses you own but don’t actively manage.
• Digital products: Earnings from online courses, e-books or apps you’ve created.

Usually, passive income earnings come from assets that increase in value over time. However, not all assets are created equal. So, before discussing how to generate passive income, it’s good to get clear on a few key terms.

Assets: In terms of a pure definition, an asset is something you own that has value. However, when it comes to wealth building, not all “items of value” are equal. For example, consider a car that you own. This item has value, but you’re not going to grow your wealth from owning your car. Why? Because your car’s value declines over time.

In contrast, wealth-building assets do one or both of the following: 

• They may put money in your pocket.
• They may grow in intrinsic value.

That takes us to our second key term, intrinsic value.

Intrinsic value: Simply stated, this is the price of your asset. If the intrinsic value of your asset increases over time, that means the amount of money someone is willing to pay for your asset is going up. This increase is called appreciation. For example, if you have a piece of property that you purchased ten years ago for $10,000, and you are now able to sell at $100,000, the intrinsic value of that property has appreciated.

When an asset you own is worth less now than when you bought it (like your car), that means its intrinsic value has gone down—a process generally called depreciation.

When you own assets that have the potential to grow in intrinsic value, they can increase your financial position over time. When you own assets with the potential to increase in intrinsic value over time and put money in your pocket such as dividends or rental income, that’s when you have the potential to begin building wealth.

How to get started with passive income

As listed above, there are several ways to build passive income, including investing in real estate, investing in the stock market or even starting your own online business. The right approach for you depends on your financial goals, risk tolerance and investment strategy. Talk with a financial professional about the tools that might work best for you.

Additionally, annuities may provide a guaranteed income stream in retirement, making them a stable source of passive income. If you’re interested in building a passive income stream while helping to ensure your family’s safety long-term, a financial professional can help. Learn more about annuities from Ameritas. Annuity guarantees are based on the claim paying ability of the issuing company subject to its terms and conditions.

Long-term impact of passive income

Receiving passive income marks a turning point in financial freedom. This new income stream can help make other things possible – a new career, a new lifestyle or even education to help you explore an entirely new field. You can reinvest your proceeds to purchase more income-producing assets, or you can use them to pay for new purchases without incurring debt. However you use it, passive income has the potential to make an impact on your financial future.   

Importantly, while it can be very tempting to sell your income-producing assets to pay for something else, understand that by selling your income-producing assets, you may be sacrificing your future wealth-building potential. In addition, there may be adverse tax consequences and other risks involved in selling an asset too early. Passive income investing is not for everyone and comes with the risk of loss, including your original investment amount. Once again, consult with a trusted financial professional to ensure you’re making the best choice for you and your future.

This article is for informational purposes and is not intended to nor should it be considered investment advice.

Representatives of Ameritas do not provide tax or legal advice.  Please consult your tax advisor or attorney regarding your situation.  

In approved states, annuities are issued by Ameritas Life Insurance Corp. In New York, annuities are issued by Ameritas Life Insurance Corp. of New York.

Planning for retirement is one of the most important steps you can take to achieve long-term financial independence and security. As you consider your financial future, questions like, “What are the best ways to save for retirement?” and “How much should I save for retirement?” are fundamental to building a strong financial foundation.

The growth potential of your retirement savings hinges on your contributions, the duration of your savings, the investment options you select and starting to save young. While growth is not guaranteed, understanding these factors can help you make informed decisions to maximize your retirement savings.

Here are four key strategies to consider.

1. Take advantage of employer-sponsored retirement plans

If your employer offers a retirement plan, such as a 401(k), take advantage of it. These plans allow you to save for retirement with pre-tax dollars, which can reduce your taxable income and increase your take-home pay. Additionally, many employers offer a matching contribution, which is essentially free money.

When you contribute to a 401(k) or other employer-sponsored retirement plan, your money is invested in a variety of funds, such as stocks, bonds and mutual funds. Over time, the value of these investments have the potential to grow, helping provide you with a nest egg for retirement.

How much should you contribute? While every investor’s situation is different, it pays to know how much just a 1% difference can make. Let’s say you earn $31,000 a year. If you contribute just 1% of your gross earnings to your 401(k), that’s about $6 per week—about the cost of a fancy coffee. After one year, you increase your contribution by just 1%, increasing your contribution to $12 per week, about the cost of a burger.

This chart shows what a difference a simple 1% increase in contribution can make over the years.

If you’ve spent years building your wealth, carefully managing your assets and planning for retirement, you’re already ahead of the game. But have you thought about what comes next, not just for you, but for those you care about?

Legacy planning is a critical, often overlooked component of long-term financial security. While many people associate it solely with estate planning or wealthy families, the truth is that legacy planning is for anyone who wants to take control of how their wealth is preserved, protected and passed on. It’s about more than just leaving money behind. It’s about defining the impact you want to have long after you’re gone.

Whether you’ve already established a retirement plan, invested in insurance or started building intergenerational wealth, this is your opportunity to take your financial strategy to the next level.

What is legacy planning?

Legacy planning is a comprehensive approach to organizing your assets, intentions and values in a way that ensures your wealth and your wishes are honored after your death. It goes beyond the basics of estate planning (like drafting a will or establishing a trust) to include:

• Articulating your values and vision for future generations.
• Strategizing tax-efficient wealth transfer.
• Funding charitable or philanthropic efforts.
• Ensuring business continuity or succession.
• Protecting loved ones from unnecessary financial burdens or conflicts.

In short, legacy planning combines the practical with the personal. It’s as much about what matters to you as it is about what you own. Read our blog to learn more about the basics of estate planning.

Why you should care about legacy planning

You may already have a solid grasp on the fundamentals of personal finance: budgeting, saving, investing and maybe even insurance and tax strategy. But as your financial situation becomes more complex, whether through career growth, inheritance or business ownership, the need for a coordinated legacy plan becomes more pressing.

Here’s why:

You have more to protect than you think. Once your net worth crosses certain thresholds, you become subject to potential estate taxes and probate costs. Even if your estate isn’t massive, the lack of a plan can lead to unnecessary legal delays, fees and even family disputes. Legacy planning helps streamline the transfer process and reduce financial drag.

Life happens quickly. Unexpected illness, injury or death can derail even the best-laid plans. A well-crafted legacy strategy includes powers of attorney, advance directives and succession plans, so your wishes are known and enforceable, even if you can’t speak for yourself.

You want to maximize impact. You’ve worked hard for what you have. Whether it’s providing for your children, supporting a cause you care about or preserving your family business, legacy planning lets you be intentional about the mark you leave behind.

What are the key elements of a strong legacy plan?

If you’re ready to get serious about legacy planning, here are the pillars you’ll want to consider.

• Will and trusts – Your will specifies who gets what—but it may not be enough on its own. Trusts can add control, privacy and protection. For example, a revocable living trust allows you to pass assets without probate, while a testamentary trust can dictate how and when your beneficiaries receive funds.
• Beneficiary designations – Retirement accounts, life insurance policies and investment portfolios often pass outside of your will. Keep beneficiary designations up to date and coordinated with your larger estate plan to avoid conflicts or unintended distributions.
• Tax strategy – Estate taxes, gift taxes and capital gains can erode the value of your estate if not properly managed. A legacy plan can incorporate tax-efficient giving strategies, like annual gifting, charitable remainder trusts or life insurance to cover anticipated tax liabilities.
• Philanthropy and charitable giving – For many people, part of their legacy includes making a difference. Donor-advised funds, private foundations and charitable trusts can help you contribute in a tax-smart way while aligning with your values.
• Life insurance – Life insurance can be a powerful tool for legacy planning. It can help equalize inheritances, fund tax obligations or provide liquidity when other assets like real estate or business interests are not easily divisible. Permanent life insurance can be used strategically to preserve wealth and support long-term planning goals.
• Family conversations – Perhaps the most overlooked element of legacy planning is communication. By sharing your intentions and values with your family ahead of time, you reduce the risk of misunderstanding or conflict. You also can teach your heirs how to manage wealth responsibly as part of your legacy in action.

Where to start when making a legacy plan

You don’t have to tackle it all at once, but you should start. Here’s a basic roadmap:

1. Inventory your assets – List everything—property, retirement accounts, business interests, life insurance policies and even digital assets.

2. Clarify your goals – What do you want your wealth to accomplish? Who do you want to benefit and how?

3. Assemble a team – A financial professional, estate attorney and tax professional can work together to design a plan that’s legally sound, tax-efficient and aligned with your values.

4. Create or update documents – If you haven’t reviewed your will, trust or beneficiary forms in the last three to five years, now’s the time.

5. Communicate your plan – Set aside time to talk to your heirs, share your thinking and document your intentions clearly.

The legacy you leave begins now

Legacy planning is about more than passing on wealth, it’s your opportunity to provide direction, reduce uncertainty and protect the people and priorities that matter most. When your financial plans reflect your long-term goals, you create a foundation that can support future generations with confidence. If you want your assets to be used the way you intend, planning is essential, and there’s no better time to get started.

Ameritas® does not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.

For many Americans, the decision of when to claim Social Security benefits can have a lasting impact on retirement income. While benefits can be claimed as early as age 62, waiting until full retirement age (typically 66 or 67) or even age 70 can significantly increase monthly payments. But what if you want to retire before that, say at age 62, but don’t want to lock in a lower Social Security benefit for life?

This is where a single premium immediate annuity can play a powerful, if underutilized, role.

What is the Social Security timing dilemma?

Delaying Social Security has clear financial advantages. For every year you postpone past full retirement age, your benefit grows by 8% until age 70. That’s a guaranteed return that’s hard to match elsewhere.

However, many people retire before they reach full retirement age, sometimes by choice, sometimes by necessity. The challenge becomes: How do you fund those early retirement years without dipping too heavily into your savings or locking in reduced Social Security benefits?

One answer lies in a bridge strategy, temporarily replacing the income Social Security would have provided so you can delay claiming it. And a single premium immediate annuity can be a tool to do that.

Quick summary:

• Goal: Retire early without reducing Social Security.
• Tool: Single Premium Immediate Annuity (SPIA).
• Benefit: Guaranteed income to delay claiming Social Security.

Read our blog to learn how annuities can help make sure you have enough money for retirement.

What is a single premium immediate annuity?

A SPIA is a contract with an insurance company where you pay a lump sum up front in exchange for guaranteed¹, immediate income for a set period or for life. In the context of a Social Security bridge, the most relevant form is a period-certain SPIA, which provides income for a fixed number of years, say, from age 62 to 67.

Here’s how it works:

• You invest a lump sum in your immediate annuity at retirement.
• The insurer begins paying you monthly income right away.
• Payments continue for the duration you specify, such as five or eight years.
• At the end of the period, payments stop—right when you’re able to receive a higher Social Security benefit.

Learn more about single premium immediate annuities from Ameritas.

Why use a SPIA as a bridge strategy?

There are several advantages to using a SPIA to bridge the gap between retiring and claiming Social Security.

1. Maximize Social Security benefits

As mentioned, delaying benefits increases your monthly payment for life. A SPIA gives you the financial breathing room to do that without compromising your standard of living.

2. Predictable, guaranteed income

SPIAs offer certainty in an uncertain market. Unlike investment-based drawdown strategies, your SPIA payments are not subject to stock market risk. That’s particularly valuable early in retirement, when market downturns can do damage to your portfolio, a phenomenon known as sequence of returns risk.

3. Simplicity and ease

With a SPIA, there’s no ongoing investment management. You don’t need to worry about withdrawals, rebalancing or whether your money will last. It just shows up in your bank account, like a paycheck.

4. Preserve other retirement assets

Using a SPIA for early retirement income allows you to leave other retirement assets, like IRAs or 401(k)s, untouched, giving them more time to grow or last longer.

How does a bridge strategy using a single premium annuity work?

Here’s a hypothetical example to see how this strategy works.

Say you’re 62 and want to retire, but you know that waiting until age 67 to claim Social Security will give you $2,500 per month for life, $900 more than if you take it at 62. You need to replace that $2,500 monthly benefit for five years.

You could:

• Withdraw $2,500/month from your investment portfolio.
• Or, invest about $135,000 (based on current interest rates) into a 5-year SPIA that pays you $2,500/month. At the end of the five years, your Social Security kicks in at the higher rate, and your portfolio is still largely intact.

What should I consider before buying a SPIA?

Like any financial tool, SPIAs aren’t for everyone. Before you commit, here are a few things to consider:

• Liquidity. Once you buy a SPIA, the lump sum is no longer accessible. You’re trading a large upfront payment for guaranteed income, not flexibility. Make sure you have emergency funds elsewhere.
• Inflation. Most SPIAs offer level payments, meaning they don’t increase with inflation unless you buy a rider—often at an additional cost. For short bridge periods like 5–8 years, this might be acceptable, but for longer gaps, inflation risk is a real consideration.
• Health and longevity. SPIAs make the most sense if you’re in reasonably good health and expect to live a long retirement. For shorter period-certain SPIAs, this is less of an issue, since payments don’t depend on lifespan.
• Interest rates. SPIA payouts are influenced by current interest rates. If rates are low when you buy it, payouts are lower as well. However, they may still be competitive with what is considered a safe withdrawal rate from a portfolio, especially given the lack of market risk.

What are the pros and cons of using SPIAs vs. drawing from investments?

You might wonder: why not just take systematic withdrawals from your retirement account? That can work, but it comes with more complexity and risk. Here’s a quick comparison:

When it comes to estate planning and legacy building, most families and their financial professionals eventually confront a common dilemma: how to preserve family wealth while minimizing tax exposure and ensuring liquidity when it’s needed most. One strategy is survivor indexed universal life insurance. This strategy can provide tax advantages, efficient wealth transfer and potential long-term cash accumulation, all in one flexible financial vehicle.

What is survivor indexed universal life?

Survivor life insurance, also known as second-to-die life insurance, insures two people, typically spouses, and pays a death benefit only after the second person (the survivor) passes away. This type of coverage is especially valuable when funds aren’t needed until the second death, such as for settling estate taxes or transferring wealth to the next generation.

When structured as an indexed universal life policy, the coverage also includes a cash value component tied to the performance of a market index, such as the S&P 500. This allows for growth potential with downside protection and flexibility in premium payments.

Unlike traditional life insurance, which is often used to replace income or cover immediate expenses upon an individual’s death, survivor IUL is designed for long-term financial strategies.

With an indexed life insurance policy, the index options are not securities; you are not investing in stocks or an index itself. Therefore, credited interest rates do not include dividends paid by companies in the indexes.

Why use a survivor policy instead of two separate policies?

There are a few key advantages:

• Cost efficiency: Because the policy pays out only after both insured individuals pass away, premiums are generally lower than for two separate permanent policies.
• Estate planning timing: Estate taxes and wealth transfer challenges often arise only after both spouses are gone. A survivorship policy aligns with this timing.
• Underwriting flexibility: If one spouse has health challenges, the combined underwriting may be more favorable than trying to insure them individually.

A strategic tool for funding multiple objectives

In addition to potential cost savings and timing advantages, survivor life insurance provides important funding for a wide range of needs, many of which go beyond basic estate taxes. For families and business owners with complex financial priorities, the death benefit from a survivor IUL policy can offer flexible, tax-efficient liquidity to support both personal and financial goals.

Here are just a few strategic uses for the proceeds of a survivor IUL policy:

• Maintain a loved one’s standard of living, particularly in multigenerational households or blended families.
• Pay both federal and state estate taxes without needing to sell valuable or illiquid assets.
• Equalize inheritance among children—especially when some are involved in a family business and others are not.
• Fund a charity or private foundation, extending the family’s philanthropic impact.
• Replace the value of assets given to charity, so heirs are not disadvantaged by philanthropic giving.
• Provide lifetime care for family members with special needs.
• Transfer business ownership interests, ensuring a smooth transition between generations.
• Provide working capital to help a business continue operations after the loss of both founders or key leaders.
• Help a business cope with the death of two key employees or decision-makers.
• Pay taxes on inherited 401(k)s and IRAs, which may otherwise create a financial burden for heirs.

These applications demonstrate how survivor IUL can be more than just a tax strategy; it’s a multi-functional funding tool that supports legacy planning, family care and business continuity.

Estate liquidity and beyond

One of the most common uses of survivor IUL is to provide liquidity to pay estate taxes. Under law, the current lifetime estate and gift tax exemption amount is only temporary. As of January 1, 2026, the current lifetime estate and gift tax exemption of $13.99 million will be cut in half and adjusted for inflation. That means individuals with estates valued at more than $7 million may be subject to federal estate taxes. As of 2025, the federal estate tax exemption is scheduled to drop significantly, potentially exposing more estates to taxes. With rates as high as 40%, families with sizable estates, particularly those holding real estate, businesses, or investment assets, face real risks of having to sell assets to meet tax obligations.

A properly structured survivorship IUL policy, especially when owned by an irrevocable life insurance trust, can keep the death benefit outside the taxable estate, making it a powerful estate liquidity tool.

Survivor IUL is particularly well-suited for married couples because the federal estate tax is generally deferred until the death of the second spouse, thanks to the unlimited marital deduction for US citizens. This means estate taxes typically aren’t due at the first death, but they can be substantial at the second. Since survivor IUL pays out only after both spouses have passed, it aligns with when the tax liability comes due. This timing makes it a cost-effective way to ensure the next generation has the liquidity needed to settle the estate without being forced to sell treasured or illiquid assets.

Flexibility through cash value accumulation

Although the primary focus of survivor IUL is legacy planning, the policy’s cash value offers a secondary benefit, tax efficient growth and access. The cash value grows based on the performance of a selected market index,¹ but with a 0% floor, it’s shielded from negative market years.

Policyholders can access these funds through withdrawals or loans,² offering a source of liquidity that can help:

• Supplement retirement income.
• Cover long-term care and healthcare expenses.
• Serve as an emergency reserve without disrupting other investments.

An option for business owners

For entrepreneurs and business owners, survivor IUL can help facilitate:

• Buy-sell agreements for family-owned businesses by providing capital to purchase shares from heirs of deceased partners.
• Succession planning by funding transitions to the next generation or chosen successors.
• Stabilization during the critical period following the death of the business’s primary leaders.

This type of insurance helps ensure that the business can survive without disruption while also protecting the family’s financial interests.

Putting the strategy to work

Survivor IUL is a sophisticated product that can address a wide range of estate, family, and business planning needs, but its effectiveness depends on proper design, ownership structure and integration with your overall financial strategy. A qualified financial professional can help you evaluate whether this type of coverage fits your long-term goals, coordinate with legal and tax advisors, and structure the policy to help deliver maximum benefit to your loved ones or your business. Learn more about life insurance offerings from Ameritas.

 

Planning for retirement is crucial, but it’s equally important to consider how taxes will impact your income streams and overall expenses. We’ll explore the basics of annuity taxation and discuss strategies for implementing a Roth IRA to help ensure you can enjoy a comfortable and tax-efficient retirement.

Understanding annuities

Annuities are popular financial products that provide a steady income stream, often used as part of retirement planning. One feature that can be added to an annuity is the Guaranteed Lifetime Withdrawal Benefit rider. This rider ensures that the annuity holder receives a guaranteed income for life, regardless of market performance.

This feature ensures that the annuity holder will not outlive their income, even if the annuity’s account balance is depleted.

Learn more about the Ameritas Income 10 Index Annuity with a GLWB rider.

Annuity taxation basics

Annuities offer versatile options for retirement planning and can be set up in various ways. They can be purchased within a traditional IRA, allowing for tax-deferred growth with pre-tax contributions and taxable withdrawals during retirement. Alternatively, annuities can be part of a Roth IRA, where contributions are made with post-tax dollars, enabling tax-free withdrawals and no required minimum distributions. Lastly, non-qualified annuities are funded with after-tax dollars, providing flexibility without contribution limits or required minimum distributions, and only the earnings are taxed upon withdrawal.

Each type offers unique tax advantages and flexibility to suit different financial goals and retirement strategies.

Traditional IRA annuities: All distributions are taxable, and distributions before the age of 59½ may be subject to a 10% penalty.

Roth IRA annuities: After five years, distributions after the age of 59½ are tax-free. This includes GLWB withdrawals in the guaranteed phase when the accumulation value has been depleted.

Non-qualified annuities: After 59½, withdrawals from annuities, including those taken from the GLWB rider, are taken as gains first, subject to ordinary income tax. The cost basis is then taken tax-free until depleted. When the GWLB guaranteed payments continue after the accumulation value has been depleted, payments become taxable again. Payments taken from an annuitized contract have an exclusion ratio that applies a portion of cost basis to each payment, spreading the taxes over the span of the payments.

Retirement implications

A Roth IRA can be an important tool in your retirement planning, particularly when it comes to managing your Medicare costs. For high-income Medicare beneficiaries, the Income-Related Monthly Adjustment Amount (IRMAA) is an additional surcharge added to your standard Medicare Part B (medical insurance) and Part D (prescription drug coverage) premiums. This surcharge is based on your Modified Adjusted Gross Income (MAGI) from two years prior, meaning your income level can directly affect the amount you pay for healthcare in retirement.

If your income exceeds certain thresholds, IRMAA can significantly increase your premiums, potentially adding thousands of dollars to your healthcare costs each year. One way to help mitigate this impact is by strategically managing your taxable income in retirement with Roth IRA withdrawals. Since Roth IRA distributions are not counted in your MAGI, they won’t trigger IRMAA surcharges, allowing you to keep your Medicare premiums lower.

By incorporating Roth IRAs into your retirement strategy, you can not only reduce your future tax bill but also avoid unnecessary increases in healthcare costs, ensuring that more of your retirement savings work for you.

Tax strategy 1: Take advantage of Roth 401(k) options

A Roth 401(k) is an employer-sponsored retirement savings plan that allows you to make contributions with after-tax dollars, resulting in tax-free withdrawals in retirement, provided certain conditions are met. It combines features of a traditional 401(k) and a Roth IRA.

Advantages: Since contributions are made with after-tax dollars, any earnings grow tax-free, and qualified withdrawals (after age 59½ and having the account for at least five years) are not subject to federal income tax.

Disadvantages: Since contributions are made with after-tax dollars, you don’t get an immediate tax break like you would with a traditional 401(k). This can reduce your take-home pay and might be less appealing if you prefer the upfront tax deduction.

Tax strategy 2: Early Roth conversion

Advantages:

• By converting a portion of your IRA to a Roth pre-retirement or in the earliest years of retirement, you have many years to offset the taxes paid with tax-free growth. Using your Roth dollars to purchase an annuity, such as the Ameritas Income 10, can create a tax-free income stream you can’t outlive.
• Any Roth dollars you do not use before your death will be passed to heirs free of income tax.

Disadvantages:

• If taxes aren’t paid from an outside source, they can reduce your balance by the amount of tax due. This leaves the client dependent on strong returns to offset the reduction.
• Depending on your earnings at the time, your total tax could be higher on the conversion than it might have been on a taxable income stream.

Tax strategy 3: Last minute Roth conversion

This strategy involves an annuity with a Guaranteed Living Withdrawal Benefit Rider. When you retire, you take withdrawals from your IRA until the accumulated value of your annuity is greatly reduced but not yet depleted. The taxable amount of the conversion is based on the fair market value of the annuity. This valuation can be complex, so consulting the annuity issuer or a tax professional is advisable. Once the contract is converted into a Roth IRA, the remaining payments continue tax-free until your death.

When you convert to a Roth IRA, you must wait five years before withdrawing earnings tax-free. While contributions can be withdrawn anytime, tax-free and penalty-free, earnings taken out during this five-year period are taxable and may incur a 10% penalty if you’re under age 59½, unless an exception applies. After the five-year period, all withdrawals—both contributions and earnings—are tax-free if you’re 59½ or older. Note that the five-year waiting period applies separately to each Roth conversion.

Advantages:

• By waiting until the accumulated value of the annuity is greatly reduced but not yet depleted, the taxable amount of the conversion is minimized. This strategic timing can significantly lower the upfront tax liability, making the conversion more financially manageable.
• When you convert a traditional IRA to a Roth IRA, the GLWB payments are generally not reduced due to the conversion. The GLWB rider ensures a guaranteed income stream, which typically remains consistent regardless of the account type.

Example:

• A 55-year-old male purchases a $300,000 traditional IRA annuity with a GLWB rider.
• At age 65, the client begins withdrawals of $32,816. These payments are taxed as ordinary income.
• When the client is 78, the accumulated value is $18,344. Currently, the client’s tax bracket is 15%. If the client completes a Roth conversion, the federal tax due would be $2,751. After the conversion, the remaining withdrawals of $32,816 will be tax-free.

A Roth IRA can help you reach your financial goals, especially when considering the tax implications of your retirement income. By strategically planning and using Roth conversions, you can potentially reduce your tax burden, helping ensure a more secure retirement.

Representatives of Ameritas do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your specific situation.

Guarantees are based on the claims-paying ability of the issuing company.

Withdrawals of policy earnings are taxable and, if taken prior to age 59 ½, a 10% penalty tax may also apply.

In approved states, annuities are issued by Ameritas Life Insurance Corp. Policies and riders may vary and may not be available in all states. Optional riders may have limitations, restrictions and additional charges.

This information is provided by Ameritas®, which is a marketing name for subsidiaries of Ameritas Mutual Holding Company. Subsidiaries include Ameritas Life Insurance Corp. in Lincoln, Nebraska and Ameritas Life Insurance Corp. of New York (licensed in New York) in White Plains, New York. Each company is solely responsible for its own financial condition and contractual obligations. For more information about Ameritas®, visit ameritas.com.

Ameritas® and the bison design are registered service marks of Ameritas Life Insurance Corp. Fulfilling life® is a registered service mark of affiliate Ameritas Holding Company.

© 2025 Ameritas Mutual Holding Company.

The Ameritas advanced planning team discusses why everyone needs an estate plan, not just the wealthy. Knowing the basics of estate planning is important for anyone with any kind of asset, no matter its worth. It can help you determine exactly who you want your properties distributed to, and it puts the management of that disbursement into the hands of someone you trust. In the end, creating an estate plan gives you control over your properties even after you’re gone.

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Welcome to Future Focus, a podcast designed to make sense of complex financial topics. Hosted by Troy Branch, a professional with over 25 years in the financial services industry, this Ameritas advanced planning podcast offers engaging panel discussions that simplifies the jargon into straightforward insight.

Whether you’re a business owner aiming to enhance your financial knowledge or someone interested in financial literacy, Future Focus is your go-to resource. Each episode provides practical tips covering topics like estate planning, managing risk, retirement strategies for business owners and much more.