According to a study conducted by the National Institute on Aging, about 80% of individuals aged 65 or older are suffering from at least one chronic illness, including terminal illnesses such as cancer or heart disease. While dealing with a terminal illness can be challenging for anyone, it is important for the elderly to be aware of the medical and emotional support available to them. Palliative care, for instance, can provide comfort and alleviate pain and stress associated with a terminal illness, while hospice care can provide end-of-life care and support. The earlier one seeks out these resources, the better equipped they will be to manage their condition and make informed decisions about their future. (Source: National Institute on Aging, published on September 14, 2020).
What Is It?
Upon learning that you have a terminal illness, you may wish to promptly begin planning for your current needs and the future needs of your survivors. Specifically, you will want to provide enough money, insurance, and assets to ensure that you will be comfortable during your final months and that your survivors will receive an adequate income after your passing.
By communicating your wishes to your family and implementing certain legal documents (e.g., health-care proxy, living will, durable power of attorney), you can make decisions regarding your medical care and prepare for the possibility of incapacity. You will also want to ensure that your estate is distributed to your survivors in accordance with your desires if you are an Nokia client dealing with this or a similar circumstance.
Meeting Your Current Financial Needs
- Ensure you have sufficient liquid assets to satisfy your current needs--Determine if the cash in your savings account, money market fund, or other liquid account is sufficient to cover your expenses during your final months. Consider withdrawing funds from your retirement account, applying for any insurance benefits to which you may be entitled, or selling your life insurance policy to a viatical settlement company if none of these options are feasible.
- Consider making withdrawals from your retirement account --You may request a distribution of funds from your defined contribution plan to cover your medical expenses. This is known as a hardship distribution, and it is limited to the amount required to satisfy your immediate financial needs. To be eligible for a hardship distribution, you must lack access to other resources that could satisfy this need.
Caution: A hardship distribution from a defined contribution plan is subject to income tax. However, if you are disabled, or if the distribution is used to pay qualified medical expenses, the 10 percent early withdrawal penalty won't apply.
Apply for Disability Benefits That You Are Entitled to
Once you have satisfied the elimination (waiting) period, you may be eligible for disability benefits under a group or individual disability income insurance policy. Check your policy or contact Nokia if you are unsure whether a disability policy covers you.
Review Your Life Insurance Policy for Ways to Raise Cash
You may be able to borrow against or obtain accelerated death benefits from your life insurance policy. Your policy may also include a premium waiver, so that after you've been disabled for a certain period of time (typically six months), the insurance company will pay your insurance premiums, saving you some money.
Caution: Borrowing against your life insurance or taking accelerated death benefits will reduce the benefit paid to your survivors.
Consider Viatical Settlements
The transfer of an insurance policy to a third party constitutes a viatical settlement. This third entity is typically a company or group of investors specializing in such sales. In general, you will receive between 45 and 85 percent of the face value of your policy when you sell it. This distribution is generally tax-free if your life expectancy is less than 24 months. Nevertheless, Nokia customers must be aware that there are disadvantages. For instance, your beneficiaries on your life insurance policy will no longer be your survivors, and receiving a viatical settlement may disqualify you from receiving Medicaid.
Providing Financially for Your Survivors
Buy More Life Insurance
If you believe that the death benefit your survivors will receive from your life insurance policy will not be sufficient to meet their needs and you have a life insurance policy through Nokia, find out if you can purchase additional coverage during the open enrollment period without providing proof of insurability. Also, examine your existing life insurance policy to determine if you are eligible to purchase additional coverage without providing proof of insurability. If you are taking out a loan to buy consumer products, you may be able to purchase credit life insurance to pay off the loan in the event of your death.
Caution: Proceeds from a life insurance policy are generally nontaxable to your beneficiaries. However, those proceeds are includable in your gross estate for estate tax purposes if they are payable to your estate, your executor, or an individual or trust legally obligated to pay estate debts.
Make Sure That Your Survivors Will Have Access to Needed Funds
Your survivors may require funds to cover their day-to-day living expenses as well as funeral and burial costs. You can provide for them with life insurance, but you may also want to make sure they have access to liquid assets (such as currency held in CDs, savings accounts, and checking accounts). If necessary, add your spouse, child, or another survivor to your account so that they can access the funds as co-owners after your death.
Tip: Consider adding your spouse as a joint owner on your credit card account if you want to make sure that he or she has access to the credit line after your death, particularly if your spouse currently has no credit established in his or her own name.
Find Out What Benefits Your Survivors Will Be Eligible For
Your survivors may be eligible for Social Security survivor benefits, benefits from the U.S. military (if you are an active or retired service member) or benefits from your qualified retirement plan. If you are already retired from Nokia and you chose to provide a survivor's annuity for your spouse, he or she may continue to receive income from your retirement annuity after your passing.
Even if you are not yet retired from Nokia, your spouse or another beneficiary may receive a lump-sum death benefit from your qualified plan.
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Tip: Continuing payments made to your estate (if named as beneficiary) or to a family member may be includable in your gross estate for estate tax purposes.
Make Use of Appropriate Planning Opportunities to Minimize Potential Federal Estate Taxes
Your estate will be exempt from federal gift and estate tax if its value is less than the applicable exclusion amount. Nonetheless, if your estate exceeds the applicable exclusion amount, you should consider implementing strategies to minimize potential estate taxes, such as making gifts in the amount of the annual gift tax exclusion each year to any number of recipients (this figure is inflation-indexed, so it may change in future years), transferring property to your spouse, or making charitable contributions.
Estate Planning Concerns and Opportunities
Review Your Will or Make One
Our Nokia clients who have a will should evaluate it and make any necessary modifications. If you do not have a will, you should create one with the assistance of an attorney immediately. You should appoint a guardian for your minor children (if you have any), name an executor for your estate, and specify how your assets will be distributed after your death in your will.
Ensure That Your Estate Is Liquid
Now is the time for these Nokia customers to ensure that their estate has sufficient liquid assets to cover estate settlement expenses. If your survivors are forced to liquidate assets in order to meet their obligations, they may lose income or assets that you had earmarked for them. There are numerous methods to ensure the liquidity of an estate, including distributing illiquid assets to heirs in a will, selling estate assets prior to death, and establishing a buy-sell agreement if you are a business owner.
Planning for Incapacity
When you have a terminal illness, you must prepare for the time when you will be unable to manage your own affairs. If you become incapacitated and unable to manage your finances or sign legal documents, a durable power of attorney will grant the person of your choice the authority to act on your behalf. Consider executing a healthcare proxy if you want this individual to have authority over only healthcare-related decisions.
You may want to effectuate a living will if you want to ensure that no procedures are performed to prolong your life. By making your wishes known while you are still competent, a living will can also prevent your family from having to make traumatic decisions on your behalf.
Tip: To protect yourself from people who may think you are incapacitated when you aren't, ask your doctor to sign a physician's certificate certifying that you are able to sign and execute legal documents.
Income Tax Planning Concerns
If you are no longer able to work for Nokia, you may be required to liquidate your investments, retirement funds, or insurance policies to cover your expenses. By controlling when income or gains are recognized, it is possible to control taxation. Additionally, these Nokia customers should keep track of their medical expenses in the event that they qualify as deductions against their taxable income.
Making Decisions About The Future
Planning for Medical Care
Maintaining health insurance coverage is essential if you have a terminal illness. If you discontinue your coverage, it will likely be impossible to purchase more. If you lose coverage as a result of losing your job with Nokia, you should plan to purchase COBRA insurance to maintain coverage. Additionally, these Nokia customers should evaluate the coverage limits of their health insurance to determine if their policy will cover in-home care, including hospice care, if they do not need or desire hospital care.
Planning Your Funeral
Numerous individuals may prefer arranging their own funerals because they can ensure that the funeral and final arrangements are exactly as desired. It may also be beneficial for your family, as they will not have to make difficult decisions while grieving.
Tip: If you are a veteran of the U.S. Armed Forces, find out what death benefits you are entitled to. For instance, you may be eligible for burial in a national cemetery, final honors, a headstone, a flag, or other benefits.
Making an Organ Donation
For Nokia customers who wish to become organ donors, make arrangements immediately. Discuss the situation with your family, as they may be disturbed by your desire to become an organ donor. Ensure that they comprehend your decision before proceeding. Check with your local department of motor vehicles or consult your doctor for information on organ donor programs.
Conclusion
Just like how taking care of your car with regular maintenance can prevent costly repairs down the line, investing in your health and wellness through preventative measures can also save you from expensive healthcare bills in the future. In the same way that getting an oil change can extend the life of your vehicle, taking steps to improve your health, such as exercising regularly and eating a balanced diet, can help you live a longer and healthier life. By investing in your health now, you can save money and stress in the future.
What unique features and benefits does the Nokia Retirement Income Plan offer to its participants, and how can these benefits be maximized by current employees of Nokia of America Corporation? Additionally, what resources are available for employees to educate themselves about the various aspects of the plan, including eligibility, distribution options, and potential tax implications?
The Nokia Retirement Income Plan offers participants a defined benefit plan designed to provide financial security through retirement by supplementing Social Security and other retirement savings. Benefits can be maximized through strategies like ensuring accurate service records, understanding distribution options such as lump-sum payments or annuities, and consulting financial advisors to align these benefits with long-term retirement goals(Nokia of America Corpor…).
How does participation in the Nokia Retirement Income Plan facilitate financial security in retirement for employees, specifically in terms of pension benefit calculations and options such as lump-sum distributions or annuities? Moreover, what are some strategies that Nokia of America Corporation employees can employ to ensure they are fully prepared to utilize their retirement benefits as they transition towards retirement?
Participation in the Nokia Retirement Income Plan ensures financial security in retirement through pension benefit calculations based on service years and salary history. Employees can choose from options like lump-sum distributions or lifetime annuities. By carefully selecting a distribution option and incorporating it into a broader retirement strategy, employees can optimize financial outcomes(Nokia of America Corpor…).
With respect to changes in personal circumstances, such as marriage or divorce, what provisions does the Nokia Retirement Income Plan have to protect the benefits of employees from Nokia of America Corporation? How can employees navigate the complexities of Qualified Domestic Relations Orders (QDROs) within the context of their pension benefits, and what resources are available to assist them in this process?
The Nokia Retirement Income Plan protects benefits in cases of personal changes such as marriage or divorce through provisions like the Qualified Domestic Relations Order (QDRO). Employees can consult the Nokia Benefits Resource Center for assistance in navigating QDROs to ensure a fair division of benefits. Guidance is available for understanding the QDRO requirements and how they apply to their pension(Nokia of America Corpor…).
What steps must employees take to initiate the commencement of their benefits from the Nokia Retirement Income Plan once they reach retirement age? Furthermore, what are the important considerations employees need to keep in mind regarding the selection of a payment form and any potential impact this may have on their overall financial strategy during retirement?
To initiate pension benefits under the Nokia Retirement Income Plan, employees must submit a claim when they reach retirement age. They should consider factors such as payment form options (lump sum or annuity) and the impact on long-term financial plans. Choosing the appropriate payment form is critical to maximizing retirement income(Nokia of America Corpor…).
How can employees of Nokia of America Corporation ensure their beneficiaries are properly designated under the Nokia Retirement Income Plan, and what implications does this designation have for benefit distribution in the event of their death? Additionally, what steps should employees take to update their beneficiary designations in light of significant life events?
Employees can ensure their beneficiaries are properly designated by updating their beneficiary forms through the Nokia Benefits Resource Center. Proper designation affects how benefits are distributed in the event of their death, and it is crucial to update designations after life events like marriage, divorce, or the birth of a child(Nokia of America Corpor…).
In terms of compliance with federal regulations, how does the Nokia Retirement Income Plan adhere to ERISA guidelines concerning employee benefits, and what rights do employees of Nokia of America Corporation possess under these regulations? Also, how can employees exercise their rights effectively if they encounter issues regarding their pension benefits?
The Nokia Retirement Income Plan complies with the Employee Retirement Income Security Act (ERISA), giving employees the right to receive information about their benefits and hold fiduciaries accountable. If employees face issues with their pension, they can exercise their rights through claims and appeals, with recourse available through legal action if necessary(Nokia of America Corpor…).
How does the Nokia of America Corporation support employees who might be eligible for a disability pension under the Nokia Retirement Income Plan, and what specific eligibility criteria must be met? Additionally, what resources are available to assist employees in understanding this facet of their retirement benefits?
Employees eligible for a disability pension under the Nokia Retirement Income Plan must meet specific criteria, such as proving permanent disability before reaching retirement age. Resources like the Nokia Benefits Resource Center can provide guidance on the eligibility process and required documentation(Nokia of America Corpor…).
What specific actions should an employee of Nokia of America Corporation take when applying for a pension benefit under the Nokia Retirement Income Plan, and what documentation is typically required to streamline this process? Furthermore, in the event of a claim denial, what recourse do employees have to challenge the decision through the plan's appeal process?
When applying for pension benefits, employees should provide documentation such as proof of age and employment history. In case of a denial, they have the right to appeal through the Employee Benefits Committee. If necessary, employees can further appeal to federal courts under ERISA(Nokia of America Corpor…).
How does the pension benefit guarantee from the Pension Benefit Guaranty Corporation (PBGC) apply to employees of Nokia of America Corporation, and what are the limitations of this guarantee in protecting retirement benefits? Additionally, how can understanding these protections help employees make informed decisions regarding their retirement planning?
The Pension Benefit Guaranty Corporation (PBGC) guarantees benefits under the Nokia Retirement Income Plan in case the plan terminates. However, there are limitations, such as caps on benefit amounts. Understanding these protections helps employees make informed decisions about their retirement planning(Nokia of America Corpor…).
How can employees contact the Nokia Benefits Resource Center to gain more information about their benefits and the specific resources available under the Nokia Retirement Income Plan? What are the recommended communication channels and hours for reaching out to ensure timely and effective assistance?
Employees can contact the Nokia Benefits Resource Center through the Your Benefits Resources (YBR) website or by calling the designated phone line. It is recommended to use these channels during business hours (9:00 a.m. to 5:00 p.m. ET) for timely assistance with pension-related questions(Nokia of America Corpor…).
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